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HMRC internal manual

VAT Transfer of a going concern

HM Revenue & Customs
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Article 5 VAT (Special Provisions) Order 1995: Has there been the transfer of a business or just a sale of assets?: restrictive covenant

A restrictive covenant in the contract of sale will forbid the one or both of the parties, usually the seller, from doing something. This may be that he may not trade in the same business in the same area for a fixed length of time or use the same trading style as before or forbid him from “poaching” customers. The presence of such a covenant in the contract of sale is a good indicator that a TOGC has taken place. There would be no need to protect the purchaser if his new business was not the business previously carried on by the seller.