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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: Taxable person: general

Where the seller of a business, or part of a business, as a going concern is a taxable person, the purchaser must be, or on transfer immediately become, a taxable person if the transfer of the assets is to be relieved from VAT. A taxable person is someone who is, or is required to be, registered for VAT. If the purchaser is not a taxable person, the supply of the assets is taxable. Where only part of the business is being transferred the purchaser must look at the turnover of this part to determine whether he must be registered.

If the seller is not a taxable person, the supply of the assets can still be treated as a TOGC regardless of whether the purchaser is a taxable person or not, provided that all the other conditions for a TOGC are met. Problems can arise where the seller is registered but sells part of his business which is wholly exempt. This is discussed in VTOGC4500.