Cookies are small text files that are stored on your computer when you visit a website. They are mainly used as a way of improving the website functionalities or to provide more advanced statistical data.
Selling Your Business - the VAT Implications
Newsletter issue - August 08.
When you sell the shares in your own company there are few VAT implications. The VAT registration will normally go with the company, as it is the company that is VAT registered not you as the owner of that company. If you are a director of the company you will want to resign, tell Companies House and tell the HMRC VAT office you are no longer a director.
Where you sell the assets and trade of your business, either out of your company or as a sole trader or partnership business, the transfer may qualify as a transfer of a going concern (TOGC). If TOGC applies you don't charge VAT on the transfer of the assets. The conditions for a TOGC to apply for VAT purposes are:
- the entire business is transferred as a going concern; or
- if only a part of a business is being sold, that part must be capable of separate operation; and
- the purchaser must use the assets in the same kind of business, which may be as part of an existing business; and
- the purchaser should already be VAT registered, or becomes VAT registered as a result of acquiring the business.
Your business need not be profitable at the time of transfer. The TOGC treatment can apply to a trading business sold on by a liquidator or by an administrative receiver.
If the conditions for TOGC are not met and you are VAT registered, you must charge VAT on the sale of each of the assets. Certain types of real property will be zero-rated or exempt from VAT, so ask us for advice in advance if the sale includes land or buildings.
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services
Please complete our form
to request a callback
Competitive fixed quotes
for agreed services
Increase your profit and
reduce tax liabilities
Expert advice for your
business size
