The Sale of Business and VAT
Where the seller of a business is registered for VAT then on the sale VAT would have to be charged.
There is however a common exception to this. The transaction can be taken outside of the scope of VAT provided that it constitutes what is known as a Transfer of a Going Concern (TOGC for short). For this to apply both the seller and the buyer have to be registered for VAT purposes and the buyer must continue the same business in succession to the seller. The sale must include all the assets reasonably necessary for the buyer to continue the business.
If these conditions are not met then VAT will be chargeable. Of course if the seller is not registered for VAT purposes then VAT cannot be charged in any event.
