Whether VAT is payable on the sale price of a business transfer will depend on whether the parties are VAT registered.
VAT will be payable where the seller of the business is registered for VAT purposes. If the seller is not registered for VAT purposes then VAT cannot be charged.
Where both the seller and the buyer are VAT registered then VAT will be charged – unless it is a Transfer of a Going Concern (“TOGC”). This means that the buyer must continue running the same business after the transfer. The sale must also include all the assets and fixtures and fittings that will b reasonably necessary for the buyer to continue the business.