Vat on practice purchase TOGC

Vat on practice purchase TOGC

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I am currently in the very early stages of taking over a small sole practitioners practice (80 clients £50k GRF).

I currently work from home, 20 clients £15k fees. I am interested in moving in to the low rent office the current practitioner uses and also using his trading name rather than mine.

The practice is currently VAT registered. I don’t particularly wish to be VAT registered if I can avoid it.

If I elect not to be VAT registered (as forecasted T/O for the year would be less than the deregistration limit) would this then mean that the sale of the practice would not be treated as a transfer of a business as a going concern and therefore the sale would be liable for VAT?

Thanks

  

Replies (3)

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By shaun king
20th Feb 2014 13:14

Simple answer

Yes it would be as it doesn't qualify as a TOGC so VAT is payable on the consideration charged for the sale of the business.

Thanks (1)
Stepurhan
By stepurhan
20th Feb 2014 13:23

Different TOGCs

I agree with shaun king's answer on the VAT aspect. The lack of VAT on transfers of going concerns is predicated on both parties being VAT registered. It does not require transfer of the VAT number though.

The transaction may still be a transfer of going concern for other reasons. Any employees are likely to be covered by TUPE for example.

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By Peter Bonetti
20th Feb 2014 13:28

Might be tempted

......... to register, as the bulk of your (now) clients have been charged VAT, achieve a TOGC (without a VAT 68 transfer of VAT number) and deregister a little way down the line if turnover remains below the threshold.

Consider if the premises are opted and the amount of VAT you might be incurring which is bound to be more than working from home.

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