Significant amounts are usually involved when a business is sold (transferred), so the tax adviser must try to distinguish between:

(1)a sale of a going concern which is ‘outside the scope’ of VAT (a non-supply); and

(2)a sale of a parcel of business assets where output tax is due on the positive-rated items (a multiple supply).

The conditions that must be met for a transfer (a sale or a gift) of a business (or part of it) to be a non-supply for VAT purposes under the Value Added Tax (Special Provisions) Order 1995 (SI 1995/1268), art. 5(1) are:

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