Regulations have been published which make two changes relating to the VAT arrangements for transfers of businesses as going concerns (TOGCs). The changes have arisen in consequence of Finance Act 2007, s 100.
The regulations are the Value Added Tax (Amendment) (No. 5) Regulations 2007 (SI 2007/2085). Firstly, they clarify that, where reference is made to the transfer of a business as a going concern, it includes the transfer of a part of a business which is to continue to operate as a going concern following its transfer.
Secondly, although by virtue of amended VATA 1994, s 49 (amended by FA 2007, s 100), the seller of a business will retain his business records, regulation 6 of the Principal VAT Regulations (SI 1995/2518) will require that, where the buyer of the business is registered for VAT with the same VAT registration number that was previously allocated to the seller, the records of the business must be preserved by the buyer, unless the Commissioners of HMRC (“the Commissioners”), at the request of the seller, otherwise direct.
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