Transfer of a Going Concern ..... who decides?

A VAT Registered business changes status & meets the TOGC criteria , why are HMRC refusing?

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 We act for a client who has traded for many years as a partnership. It has now transferred its trade into a limited company. In plenty of time before the change took place, everything was put in place including the application for a TOGC for VAT purposes. No response was forthcoming & the matter was chased up. Today we received a telephone call from HMRC informing us that because the client is registered for MTD and MTD cannot cope with TOGC, they will have to issue a new VAT Registration number. We were told that there is a huge backlog which HMRC are endeavouring to clear but in HMRC's opinion " The chances are that they will all have to be issued with new VAT numbers".  Whilst accepting that this could simply be "her view" rather than an "HMRC view" it seems astonishing that they blame MTD for not coping with a process which should not be one of choice but one embedded in legislation. Have other subscribers encountered issues with TOGC's and what rights in reality does a taxpayer have in such circumstances?

Replies (7)

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By Wanderer
17th Oct 2019 13:45

On my reading of your post there's two separate issues which it sounds like are being conflated:-
a) TOGC
b) Transfer of registration
I don't believe HMRC has any authority to refuse to treat a change as a TOGC (if it applies). I think your issue is about the transfer of the registration number.

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By The Dullard
17th Oct 2019 13:49

Why would anybody in their right mind want to transfer the CAT registration between the two entities, rather than make a clean break?

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Replying to The Dullard:
RLI
By lionofludesch
17th Oct 2019 14:12

Ours not to reason why .....

Maybe the cat decided.

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Replying to lionofludesch:
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By The Dullard
17th Oct 2019 14:14

lionofludesch wrote:

Maybe the cat decided.

The cat probably misread something, unless it was inaccurately typed.

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RLI
By lionofludesch
17th Oct 2019 14:07

This query is very poorly worded but I'm guessing this is about taking over the VAT number rather than whether VAT should be charged on the transfer of assets.

If I'm correct, I'd just be carrying on with the VAT number I had until I got a new one and, if HMRC kicked up a fuss, I'd be pointing out that this arose owing to their shortcomings.

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Replying to lionofludesch:
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By The Dullard
17th Oct 2019 14:13

To be fair to them, nobody could possibly have predicted that MTD would have caused them extra work.

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Replying to The Dullard:
RLI
By lionofludesch
17th Oct 2019 14:24

[chuckle]

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