An Intelligent approach to TOGCs and VAT Groups? - DAC Beachcroft

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An Intelligent approach to TOGCs and VAT Groups?

Published On: 11 February 2016

Although it is rather an oversimplification, the general rule used to be that you ignore what happens inside a VAT group and pretend it doesn't happen. This helped to explain why a letting to a group company inside the same VAT group was not enough to give you a transfer of a going concern ("TOGC"), and the advantages that flow from it.

All this ended with Intelligent Managed Services v HMRC which recently held the opposite. Notwithstanding, the fact that there had only been supplies within the VAT group, enough evidence of economic activity existed to create a TOGC.

We await HMRC's formal response, but don't hold our breath as their record here is slow, to say the least. However, all we can say is that the market seems to be taking a wider view as to what is a TOGC, which is often key to driving SDLT savings.

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