Revenue and Customs Brief 11/2016 makes clear that, in a change of policy, HMRC will now accept that the transfer of a business to a company in a VAT group can be the transfer of a going concern (TOGC) for VAT purposes, provided the company intends to operate the same kind of business in supplying services to other group members, who in turn make supplies outside of the group. This follows the Upper Tribunal decision in Intelligent Managed Services Ltd [2015] UKUT 341 (TCC). HMRC has also revised its policy on TOGCs involving transfers out of a VAT group. For the TOGC rules to apply where the buyer of a business is not established in the UK, HMRC will take the view that a voluntary registration must be in place at the time of the transaction.
Revenue and Customs Brief 11/2016 makes clear that, in a change of policy, HMRC will now accept that the transfer of a business to a company in a VAT group can be the transfer of a going concern (TOGC) for VAT purposes, provided the company intends to operate the same kind of business in supplying services to other group members, who in turn make supplies outside of the group. This follows the Upper Tribunal decision in Intelligent Managed Services Ltd [2015] UKUT 341 (TCC). HMRC has also revised its policy on TOGCs involving transfers out of a VAT group. For the TOGC rules to apply where the buyer of a business is not established in the UK, HMRC will take the view that a voluntary registration must be in place at the time of the transaction.
