Andrew Needham looks at some consequences of retaining the VAT number when someone buys a business.
When someone buys the trade and assets of a business, they have the option of retaining the VAT number. How is this done, and what are the ‘pros’ and ‘cons’ of doing so?
Buying a business
If someone buys the trade and assets of a VAT-registered business, it can be treated as ‘transfer of a going concern’ (TOGC) for VAT purposes. This avoids charging VAT on the sale of the business.
Transferring the VAT number
When someone buys a business as a TOGC, they have the option of taking over the VAT number of the original owners. This can be done by completing a form VAT 68 and submitting it to HMRC along with the VAT 1 application for VAT registration. The previous owner must not
