When VAT-registered with substantial assets, people should be careful when changing from sole trader to partnership or vice versa and de-registering. Two examples below show how there can be trouble.

When a person ceases to be registered, any goods, which form part of the assets of the business carried on by him, are deemed to be supplied in the course of the business before de-registration, unless (VATA 1994, Sch. 4, para. 8(1)):

(1)the business is transferred as a going concern to another taxable person (¶54-150ff.);

(2)the taxable person has died or become bankrupt, or incapacitated in some other way and the business is carried on by some other person on his behalf; or

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