Reply To: Claiming VAT on professional fees for sale of commercial property as a TOGC

Forum Categories VAT ON PROPERTY TRANSACTIONS Claiming VAT on professional fees for sale of commercial property as a TOGC Reply To: Claiming VAT on professional fees for sale of commercial property as a TOGC

#56185
Trevor S
Participant

Generally if a business still owns any goods at the point of deregistration, they need to account for VAT on them as part of the deregistration. Land/buildings owned are treated as goods, so (as you had opted to tax them) if you still owned them at the time of deregistration, you would have had to account for some VAT. This would be why HMRC sent out the form – to establish whether you still owned them and, if not, what had happened to them.

I haven’t seen this form before, and can’t find it online. But I’m wondering whether there’s a confusion with terminology – maybe you’re applying more of an everyday meaning to the word “sale” than HMRC are? Maybe you’re only meant to complete either question 3 or 4, not both?

TOGC is actually short for Transfer of a Business as a Going Concern. In other words, your transaction was only a TOGC because the property together with the agreements with the management company was a complete business in its own right. You need to complete question 4, but probably not question 3.

Others may own buildings which aren’t businesses in their own right. For example a company might operate out of two offices. If they decide that they no longer need one of them and sell it as empty office space, they aren’t transferring any form of “business” to the new owner, they are just selling property and would need to charge VAT on the sale. If they then deregistered for VAT, they would need to complete question 3 on the form rather than question 4.