In this section:
- When you must register for VAT and when you can choose to register
- How to register for VAT
- Register for VAT or file your VAT return online
- VAT registration when you take over a business
- Registering for VAT as a group, division or joint venture
- Appointing someone to deal with your VAT affairs
- What happens if you register for VAT late?
- How long it takes to be registered and what to do in the meantime
- Reclaiming VAT on purchases made before VAT registration
VAT registration when you take over a business
If you buy a VAT registered business as a going concern, you must be registered for VAT when you buy that business.
Provided you are VAT registered, the sale of the business will not be treated as a supply for VAT purposes so no VAT will be charged, and as a result, no VAT can be reclaimed.
If you are just buying the assets of a business, such as stock-in-trade, machinery, goodwill, premises and fixtures and fittings, VAT will be chargeable, although you will be able to reclaim this VAT if you are VAT registered.
On this page:
- VAT registration when you buy a business
- The difference between buying a going concern and buying assets
- Buying a business as a going concern that includes property and capital assets
- Transferring the existing VAT registration number
- Find out more
VAT registration when you buy a business
A business is a going concern if it is a business that is trading and will continue to trade after it is sold.
If you buy a VAT registered business as a going concern, you must be registered for VAT when you buy that business - at the time of sale.
If you are not registered for VAT, the seller must add VAT to the price you pay for the business as if you were buying the assets alone and you will not be able to reclaim this VAT.
The difference between buying a going concern and buying assets
In contrast to buying a business as a going concern, you buy the assets of a business if you are only buying particular items from that business, or if that business will no longer exist.
If you buy the assets of a VAT registered business and the business itself is no longer trading, or no longer will be trading, VAT on the assets is chargeable and reclaimable. Assets can include stock-in-trade, machinery, goodwill, premises and fixtures and fittings.
Get information about charging and reclaiming VAT
Buying a business as a going concern that includes property and capital assets
There are additional steps you may need take before and after you buy a business whose assets include capital assets such as:
- land
- buildings
- civil engineering works
- refurbishments
- computers and items of computer equipment
- related self-supplies
Land and buildings
Freehold sales, leasing, rental and other supplies of land and buildings are normally exempt from VAT. This means that no VAT is payable on these land transactions, but it also means that any of the VAT incurred on associated expenses cannot be recovered.
However, you can opt to tax land and/or buildings for the purposes of VAT. Once you have opted to tax the asset, all sales or other supplies you make of any interest in the asset - eg rental - will normally be standard-rated, and the VAT incurred on any associated expenses would be reclaimable.
Find more information about exempt and partly exempt businesses
More about how land and property are treated VAT Notice 742
More about opting to tax land and buildings in VAT Notice 742A
Get form VAT1614 Option to tax land and property
Other capital assets
There are additional accounting steps you may need to take after you buy a business as a going concern where the assets of that business include capital items. Where the value of these items is £250,000 or more, or £50,000 or more in the case of computers and computer equipment, the Capital Goods Scheme (CGS) may apply.
More about the Capital Goods Scheme in VAT Notice 706/2
Transferring the existing VAT registration number
You may be able to keep the VAT registration number of the business you acquire as a going concern. If you do so, you will also take on all VAT responsibility of the business you are buying, such as unclaimed bad debt relief and record keeping requirements.
Both the buyer of the business and the seller must agree to the transfer of the VAT registration number, and must both sign a form notifying HM Revenue & Customs (HMRC).
Get form VAT 68 to request the transfer of a registration number
Send your form VAT68 to:
HM Revenue & Customs
Imperial House
77 Victoria Street
Grimsby
DN31 1DB
Find out more
More about VAT when a business is sold in VAT Notice 700/9
More about if you need to register for VAT in VAT Notice 700/1
