Prepare the evidence for a UK VAT transfer-of-going-concern review

Ask the deal team to describe the operating activity that the buyer will receive, including assets, contracts, premises, staff arrangements and access needed to continue it. Separate that description from the purchase-price allocation. A list of equipment can support an asset sale without establishing that an operable business has transferred.

HMRC's Notice 700/9 explains that transfer-of-going-concern treatment is compulsory when the conditions are met. It is not a VAT election negotiated between buyer and seller. The assessment therefore needs to happen before invoices and completion payments assume a treatment. Record the transaction structure and have the VAT adviser identify which conditions apply.

Obtain the buyer's intended use of the transferred activity, the start date and any interruption plan. Support the explanation with operating plans, customer arrangements or other transaction evidence. The notice requires the buyer to intend to carry on the same kind of business, though that does not require every operating detail to remain identical.

For a partial-business transfer, show how the transferred part can operate as a business. Explain dependencies retained by the seller and any transition services. A plan to liquidate the assets raises a different question from a plan to continue trading. Avoid using a standard agreement warranty as the only evidence when the operational plan tells a different story.

Where the seller is VAT-registered, the notice sets conditions for the buyer's registration status. Preserve the registration evidence or the analysis establishing a registration requirement. If voluntary registration is needed, confirm its timing with the adviser; an intention to apply after completion is not the same as having the required status when the transaction occurs.

Keep entity names consistent across the sale agreement, registration evidence and invoices. A registration belonging to a parent or an unrelated company does not explain the buyer's position. Flag VAT-group, overseas-buyer and legal-entity changes early, since these can require analysis beyond the ordinary transaction example.

Land and buildings can introduce additional requirements even where the operating business otherwise qualifies. Obtain the property description, seller's VAT history and relevant options to tax. Have the adviser identify required buyer actions, notifications and declarations, along with their deadlines. Keep evidence of when each was completed.

Use a completion checklist that separates the business conclusion from the property conclusion. If a required property condition is missing, do not assume the treatment of every other asset necessarily changes in the same way. The reviewer should state the result for each affected part and the consequence for the funds-flow calculation.

Before releasing final invoices, reconcile the asset schedule and payment calculation to the approved VAT memo. Route late changes in buyer, premises or operating intention back to the adviser. Retain the actual completed agreement and evidence, not just a draft checklist. If VAT was charged incorrectly, coordinate the correction and refund process rather than assuming the buyer can reclaim any amount labeled VAT on an invoice.