Transfer of Going Concern

I am considering buying a business that is already trading and the current owner says he will have to charge me VAT on the sale, unless I am registered for VAT. Is this right?

1st October 2008

If the business you are considering buying is VAT registered, then this is correct under special Transfer of a Going Concern (TOGC) VAT legislation.

You would probably be well advised to register for VAT, as you will not have to then fund the additional VAT on the purchase of the business. However when you register for VAT, you will have the option to continue trading with the sellers VAT number.

We usually recommend that you do not do this, as if there are any problems with unpaid VAT or other issues with HM Revenue & Customs (HMRC) relating to the previous owner, you could well be held responsible for them.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

Call us today to make an appointment at your local office

0800 0523 555

Or submit an enquiry