vat reg take over 1 business from vat reg company

is there vat registration requirement 1 business coming out of a vat registered company

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Hi can someone help me with some guidelines for this please? a client is taking over 1 shop which has been in a vat registered company with another 2 shops and trade as a new company, is there vat registration requirement for this 1 shop straight away at taking over? the hmrc helpline is not helpful at all, if you know where hmrc guideline on this one, could you pls point that out for me?many thanks

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RLI
By lionofludesch
15th Jun 2021 09:45

The HMRC isn't helpful ?

I'm amazed.

Sounds like a TOGC to me but there isn't enough detail to be sure. The new incumbents would inherit the record of the old trade for the purposes of registration.

Thanks (0)
By Duggimon
15th Jun 2021 09:57

Agree with Lion, it sounds like a TOGC so registration would therefore be required, but if the trading history allows, immediate deregistration may be possible.

Suggest your query re: guidance would be best served by starting here https://www.gov.uk/hmrc-internal-manuals/vat-transfer-of-a-going-concern

Thanks (1)
VAT
By Jason Croke
15th Jun 2021 11:19

If it is not a ToGC (Transfer of a Going Concern) then the seller will have to charge VAT on the sale of the shop, whereas if it is a ToGC then the sale is without VAT but would require the buyer to register for VAT before acquisition.

Section 2.2.4 https://www.gov.uk/guidance/transfer-a-business-as-a-going-concern-and-v...

Thanks (1)
Replying to Jason Croke:
RLI
By lionofludesch
15th Jun 2021 11:33

Indeed. The querist might want to consider how much VAT would be charged on the assets if it was not a going concern and the impact if that was irrecoverable.

There are a lot of choices and decisions to make here.

Thanks (1)
avatar
By Paul Crowley
15th Jun 2021 11:59

You need details of the turnover of the 1 shop

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