Home For accounting professionals VAT
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚


Help with TOGC

KarenH79KarenH79 Registered Posts: 1
A client is selling their business as a going concern. They are vat registered. They sell houses and are paid commission for the sales. Part of the price of the sale of business as a going concern is for the commission on agreed sales ( say £3600 for the sake of this example). The house sale had not completed before the togc so therefore no sale (net commission £3000 + vat £600) has been put through the accounts, but has effectively been paid to them via the purchaser. Therefore the funds will be paid to the new business owner.
Would the seller be liable for the vat on the sale? (effectively putting the sale and vat through there accounts (cr sales and cr vat, dr trade debtors) as a debtor, cleared by the sale proceeds ( cr trade debtors dr bank) and the purchaser showing it as - purchase of business dr trade debtor cr bank, upon payment of commission for agreed sales cr trade debtor dr bank).
No vat charged on the sale of the business as sold as a going concern.

Comments

  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,432
    You would need to first determine the date for the tax point. From this it would clarify who is liable for the VAT.
    douglasstroud
Sign In or Register to comment.