Treatment of VAT on the Sale of a Going Concern

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT member discussion
If a sole proprietor sells a business as a going concern, including all equipment, does he need to declare the VAT on stock and the equipment passed to the new owner?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Treatment of VAT on the Sale of a Going Concern

    Hi TC

    If the business as a whole(not jus tht eassets)is transferred as a going concern to another VAT registered trader, then the transfer of the business is outside the scope of VAT.

    Hope this helps

    Kate
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Treatment of VAT on the Sale of a Going Concern

    The business was transferred as a whole, apart from the building itself, which remains the property of my client. So would you agree that this is outside the scope of VAT, because they are asking my clients for details of 'stock in hand', 'assets held' etc?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Treatment of VAT on the Sale of a Going Concern

    Hi TC,

    I am no VAT expert, but I would've thought that provided that the business is being transferred to another VAT registered trader, the assets and the stock are outside the scope of VAT.

    Maybe they are asking to determine what assets would actually be VATable in the first place - for example if a building (an exempt asset for the purposes of VAT)is transferred and the building has been opted to tax (ie to make it std rated), then the new owner of the building will also have to opt the building to tax in order for it to be outside the scope.

    Does anyone else agree?

    Kate

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