Julie Green, VAT consultant considers VAT liability under transfer of a going concern rules, reclaims under the cash accounting scheme and gross interest payments on loans from a non-UK based debtor
VAT registration: transfer of a going concern
I have recently accepted a new client, a husband and wife partnership, which was set up to acquire a dry cleaning shop as a going concern and at the same time to buy the goodwill and customer list of a clothing alteration business.
In the 12 months prior to the transfer the turnover of the dry cleaning business was £55,000, while the clothing alteration business only turned over £30,000; neither business was VAT registered.
The partnership has been trading for three months without registering for VAT and I am concerned that because the combined turnover of both activities exceeds the VAT registration limit they should have notified HMRC and been registered from day one.
