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Pub tenancy requirement for VAT registration

Pub tenancy requirement for VAT registration

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Looking for a second opinion (I already have my opinion but would like other views).

Situation is that a pub had a tenant who ceased trading. 

The brewery then put a manager into the pub to run it whilst they tried to sell the business.

Nobody bought the business but our client has agreed to take on a new tenancy at the pub.

There was no sale of assets apart from the initial stock that was on the premises when our client moved in.  Our client commenced trading immediately after the brewery managers moved out.

Is our client required to be registered for VAT from day one?

Thanks in advance.

Replies (5)

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By nrw
25th Apr 2016 16:42

When to register for VAT

When to register:

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By Les Howard
25th Apr 2016 17:04


To precis the HMRC guidance: if the tenancy is purchased as part of a TOGC, then registration is required if the vendor was registered. That is a standard question to be asked when entering into a lease. In contrast, if your client is merely buying assets, and there is no 'going concern' then there is no TOGC, and registration is not required immediately.

(Is there any great gain from not registering from the date of purchase?)

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By Duggimon
25th Apr 2016 17:18

The gain from not registering will be about £14,000 less whatever input VAT is paid out on purchases and overheads in the time it takes to reach £83,000 in turnover, since I presume if registration is not required there will be no drop in prices to reflect the non-VAT status of the business.

Thanks (1)
By In a Daze
26th Apr 2016 09:30

Payment Plan

Just make sure your client has not signed a payment plan for the F&F normally the pubco charge around 8% interest on these agreements.

If this is not the case he will be renting the F&F off the pubco as with any pub tenancy agreement the detail is normally in the contract they have signed. He will almost certainly done one of the above.


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By bendybod
26th Apr 2016 10:53

Usually TOGC

In my experience of these situations, there is almost always a TOGC as there is not a break in the supply of alcohol to punters.  In this situation they would have to register from day one.

If there has been a break of supply - if the pub closed for a period between the manager being in place and your client taking on the tenancy - then they would probably be able to claim that they had just taken on the fixtures and fittings.

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