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HMRC internal manual

VAT Transfer of a going concern

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HM Revenue & Customs
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Annexes: Section 49 VAT Act 1994

(1) Where a business, or part of a business, carried on by a taxable person is transferred to another person as a going concern, then -

(a) for the purpose of determining whether the transferee is liable to be registered under this Act he shall be treated as having carried on the business before as well as after the transfer and supplies by the transferor shall be treated accordingly; and

(b) [omitted by FA 2007, s.100(2)(c) and repealed by FA 2007, s.114 and sch. 27, Pt.6(2).]

(2) Without prejudice to subsection (1) above, the Commissioners may by regulations make provision for securing continuity in the application of this Act in cases where a business carried on by a taxable person is transferred to another person as a going concern and the transferee is registered under this Act in substitution for the transferor.

(2A) Regulations under subsection (2) above may in particular provide for the duties underthis Act of the transferor to preserve records relating to the business or part of the business for any period after the transfer to become duties of the transferee unless the Commissioners, at the request of the transferor, otherwise direct.

(3) Regulations under subsection (2) above may in particular provide -

(a) for liabilities and duties under this Act (excluding sections 59 to 70) of the transferor (other than the duties mentioned in subsection 2A above) to become, to such anextent as any be provided by the regulations, liabilities and duties of the transferee;and

(b) for any right of either of them to repayment or credit in respect of VAT to besatisfied by making a repayment or allowing a credit to the other;

but no such provision as is mentioned in paragraph (a) or (b) of this subsection shall have effect in relation to any transferor and transferee unless an application in that behalf has been made by them under the regulations.

(4) Subsection (5) below applies where-

(a) a business, or part of a business, carried on by a taxable person is transferred to another person as a going concern, and

(b) the transferor continues to be required under this Act to preserve for any period after the transfer of any records relating to the business, or part of a business.

(5) So far is as is necessary for the purpose of complying with the transferee’s duties under this Act, the transferee (“E”) –

(a) to give to E, within such time and in such form as E may reasonably require, such information contained in the records as E may reasonably specify

(b) to give to E, within such time and in such form as E may reasonably require, such copies of documents forming part of the records as E may reasonably specify, and

(c) to make the records available for E’s inspection at such time and place as E may reasonably require (and permit E to take copies of, or make extracts from, them).

(6) Where a business, or part of a business, carried on by a taxable person is transferred to another person as a going concern, the Commissioners may disclose to the transferee any information relating to the business when it was carried on by the transferor for the purposes of enabling the transferee to comply with the transferee’s duties under this Act.