TOGC ― VAT recovery

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note looks at VAT recovery issues associated with transfers of a going concern (TOGC).

For VAT recovery generally, see the Input tax ― overview guidance note and for an overview of TOGCs more broadly, see the TOGC ― overview guidance note.

In-depth commentary on the legislation and case law around TOGCs can be found in De Voil Indirect Tax Service V2.226.

Why is VAT recovery an issue when there is a TOGC?

As described in the TOGC ― overview guidance note, a TOGC is neither a supply of goods nor services and is therefore outside the scope of VAT. This raises questions over how to treat any VAT on costs associated with the TOGC.

The treatment of VAT on costs differs slightly for the seller (transferor) and the purchaser (transferee). The position for each is considered in this guidance note.

What kinds of costs are associated with a TOGC?

There are often costs associated

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