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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?: consensus

The tribunal in Edward James Caunt (MAN/83/160) decided that there was no TOGC due to a change in the nature of the business after transfer. This decision was based on the particular facts of the case but the Chairman made the following comment which is especially useful where the seller and the purchaser are closely linked.

“For the transfer of a business as a going concern there must, in our judgement, be a consensus between vendor and the purchaser. The commonest example is where a business is advertised by a vendor for sale as a going concern … In our judgement in cases such as the present where evidence of consensus may be lacking or suspect, the expression “transfer of a going concern” must be interpreted as meaning succession by way of continuity of the previous business, succession by itself not being conclusive.”