I am buying a commercial unit in Birmingham where the vendor has opted to tax. They’ve also stated they do not believe it is a transfer of a going concern as it is being sold with vacant possession. I intend to carry on the same business, which is to rent the property, and I understand from the Tax Adviser website that this could be considered a going concern. Can you suggest what the next steps are here in terms of my dialogue with the vendor? Equally, does it matter anyway if I need to register for VAT in all scenarios since the vendor has opted to tax? The purchase price is £250,000, so paying stamp duty land tax on the VAT price only increases my purchase price by £900. 

Arthur Weller replies:  

Firstly, ask the vendor if it is 20 plus years since they opted to VAT because if it is, they can now revoke their option to VAT. If you look at VAT Notice 700/9 at section 6.1, it appears that the vendor is correct and the Tax Adviser website is not (i.e., it is not a transfer of a going concern). When you write about £250,000 and £900, it seems you mean that the VAT exclusive price is £208,333, and the VAT on this (at 20%) is £41,666, so the stamp duty land tax on this is at 2% (for non-residential). If you mean that the VAT exclusive price is £250,000, this means that the VAT is £50,000, and the SDLT on this, at 5%, is £2,500.