Spring 2008 Newsletter Content Winter Of Discontent CGT Winners CGT Losers Shifty Business Anything To Declare? Long Arm Of The Law Irreplaceable You Earn As You Pay Ask Questions Later Capital Ideas ISA ISA ISA Referee! Go Green VAT Or No VAT? Taking The Register Close Encounters May Contain Nuts Going Concern Ancient History Business And Pleasure Do Your Duty Know Your Rights Time To Go? Passing The Buck

Going Concern If you take over someone else's business, there are important rules for VAT. The VAT registration form asks you if that's how you acquired the business, and if you tick the box, you need to know what that means. The first rule is that taking over a business as a going concern from another VAT-registered person means you have to register immediately from the date of the transfer. You don't get the opportunity to make £64,000 VAT-free before you have to sign up for VAT. That can be a nasty shock if you didn't realise that it applied and HMRC come for the money a few months later. The second rule is that you could take over the VAT registration number of the previous owner, but that means you also take responsibility for any VAT debts and misdemeanours arising in the past. You don't want to do that unless you know the previous owner very well (for example if you are incorporating your own business by transferring it to a company you own). The third rule is the good news - the vendor should not charge you VAT on the assets transferred. The problem is that people often don't realise that and charge VAT anyway - in that case HMRC will refuse to pay it as input tax to the purchaser. The poor purchaser has to find the vendor who shouldn't have charged it and get it back from them. If you are thinking of buying or selling a business, there are many different tax and legal issues to think about - don't forget the VAT. We'll be happy to help.