There have been quite a few cases exploring what is meant by a TOGC which permits businesses to be sold without the application of VAT. The purpose of the provision is not to overburden taxpayers with large tax charges on asset sales and to protect the state for example in insolvency situations (including the ‘Phoenix syndrome’). Parliament has implemented necessary measures to prevent avoidance and abuse involving TOGCs including VATA 1994 ss 43(2A) and 44 and the capital goods scheme. The Halifax principle also keeps a watchful patrol over the VAT system.
HMRC has though to date had a more restrictive policy regarding both transfers into and out of VAT groups and vertically integrated businesses more generally (see for example HMRC’s Notice 700/9 para 4.3). But the whole point of the VAT system...
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Home >Articles > VAT groups: an ‘Intelligent’ solution to TOGC issues?
VAT groups: an ‘Intelligent’ solution to TOGC issues?
There have been quite a few cases exploring what is meant by a TOGC which permits businesses to be sold without the application of VAT. The purpose of the provision is not to overburden taxpayers with large tax charges on asset sales and to protect the state for example in insolvency situations (including the ‘Phoenix syndrome’). Parliament has implemented necessary measures to prevent avoidance and abuse involving TOGCs including VATA 1994 ss 43(2A) and 44 and the capital goods scheme. The Halifax principle also keeps a watchful patrol over the VAT system.
HMRC has though to date had a more restrictive policy regarding both transfers into and out of VAT groups and vertically integrated businesses more generally (see for example HMRC’s Notice 700/9 para 4.3). But the whole point of the VAT system...
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