VAT ON PUB DO I HAVE TO PAY?

by **imran4000** on Thu Jun 17, 2010 7:42 pm

Hi wondering if anyone can help me? Made offer on pub and brewery has said they are charging vat on the purchase price. I intend to convert puv to residential flats but have no planning permission at present. so buying pub unconditionally as it is. do i still have to pay vat if i intend to go residential? thanks any help will be appreciated.

by **pawncob** on Thu Jun 17, 2010 10:20 pm

If it's treated as a transfer of a going concern, VAT isn't chargeable if you're VAT registered. Otherwise you'll have to pay it.

by **AvocadoK** on Fri Jun 18, 2010 7:43 am

If you provide a 'certificate of use' to the brewery stating that the pub is to be converted into dwellings, they will not have to charge VAT. Most breweries are familiar with this.
AK

by **section 44** on Fri Jun 18, 2010 9:55 am

The brewery (or their advisors) may query whether you really have the necessary conversion intention given that you do not have the necessary planning permission (perhaps more a hope than an intention).

by **Generix** on Fri Jun 18, 2010 11:29 am

pawncob wrote:If it's treated as a transfer of a going concern, VAT isn't chargeable if you're VAT registered. Otherwise you'll have to pay it.

Agree with pawncob - if you are going to be operrating the pub as a pub in the interim then you should get it as a TOGC.

What are your plans in the interim (i.e. whilst awaiting planning permission etc).

Also - is the pub currently trading?

by **section 44** on Fri Jun 18, 2010 11:35 am

If the pub's trading (hence turnover probably in excess of the registartion threshold), then I doubt that the buyer would need to be VAT registered for TOGC treatment. The bigger issue would be whether the buyer would, and could, operate a pub business.

by **AvocadoK** on Sat Jun 19, 2010 10:04 am

On the TOGC point:
Where a business carried on by a taxable person is transferred to another as a TOGC, the transferee is treated as having carried on the business before as well as after the transfer. Accordingly, if supplies made by the transferor exceed the registration threshold, the transferee must be registered on or before the date of the transfer. If not already registered, the transferee must notify HMRC of his liability to register within 30 days, and registration will be with effect from date of transfer.
AK

by **spidersong** on Mon Jun 21, 2010 10:54 am

The problem with pubs and TOGCs is that a lot of transfers don't meet the TOGC requirements where they're owned by a Pub Co.

To be a TOGC the assets have to be used in the same kind of business, a Pub Co is in the business of owning and renting property, with some wholesale of beer. If sold to the landlord he will not be renting out the property, he will occupy it to use during retail trade, a different kind of business, no sitting tennants for him to take on as commonly required in TOGC of rental properties, hence no TOGC.

The buying of stock from the previous landlord is normally part of a TOGC but not necessarily the purchase of the building itself.

by **muchenje** on Mon Sep 19, 2011 9:45 am

Hello
I am in a similar position and buying a Pub from a Greene King, and will continue to run as a pub. My accountant says Vat is not payable because it qualifies as a TOGC but G.K. say NO... The trouble is if I pay the Vat I have no gaurantee of getting it back because the Vat office may deem it should have been a TOGC sale?
anyone help?