A sale of assets as part of a transfer of a business as a going concern (TOGC) is not treated as a supply of goods or services for VAT purposes, and so is outside the scope of VAT. The treatment is mandatory if the conditions are met. If VAT is charged in error, it would not be recoverable by the transferee as input tax. The business or part of a business that is transferred must be capable of separate operation, and the transferee must carry on the same kind of business as that carried on by the transferor. Special conditions apply to land and buildings in respect of which a sale would have given rise to a standard-rated supply.
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A sale of assets as part of a transfer of a business as a going concern (TOGC) is not treated as a supply of goods or services for VAT purposes, and so is outside the scope of VAT. The treatment is mandatory if the conditions are met. If VAT is charged in error, it would not be recoverable by the transferee as input tax. The business or part of a business that is transferred must be capable of separate operation, and the transferee must carry on the same kind of business as that carried on by the transferor. Special conditions apply to land and buildings in respect of which a sale would have given rise to a standard-rated supply.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
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