The transfer of a business as a going concern (TOGC) rules concern the possible VAT liability resulting from the sale of a business. Normally the sale of the assets of a VAT registered or VAT registerable business will be subject to VAT at the appropriate rate.
However, where the sale of a business includes specific assets and meets certain conditions the sale will be categorised as a TOGC. A TOGC is defined as ‘neither a supply of goods nor a supply of services’ and is therefore outside the scope of VAT and no VAT is chargeable.
HMRC lists the following conditions necessary for a TOGC to apply:
Please call for advice if you are contemplating the transfer or sale of your business. The VAT at risk can be considerable and liability needs to be assessed before you dispose of the relevant assets.