TOGC

[Hassan]

Hello All,
I'm new here and wondered if I may ask for some advice regarding the Transfer of a Going Concern.
Currently I am buying in the process of buying an existing business with land and property, it's mixed residential and commercial.
The seller is VAT registered.
I am a sole trader and also VAT registered. My VAT No. is listed under a company name tho I am a sole trader!
Hope this makes sense...
My lawyer is suggesting I may have to pay the VAT as I'm not a registered company!
Surely if I'm VAT registered and I'm paying VAT that I should not be penalised for not being a registered company!
I claim the VAT and pay the VAT…
Can someone shed some light on tho at all as it's really worrying!
Thank you.

[jpcentral]

You and the Ltd company are separate legal entitities. If you, as a sole trader, are not VAT registered then you cannot have the benefit of being VAT registered while avoiding the downside.

Your lawyer is correct. If you are buying personally, you cannot reclaim VAT through your Ltd company. Presumably there is a reason why you are not buying this new business through your Ltd Co?

The question which may be worth asking is, "Should you register your sole trader business for VAT?". If the business you are buying is currently VAT registered is that because its turnover is above the threshold? If so, you will probably have to register for VAT in any case.