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The transfer of a business as a going concern (TOGC) rules concern the VAT liability on the sale of a business. Normally the sale of the assets of a VAT registered or VAT registerable business will be subject to VAT at the appropriate rate. However, where the sale of a business includes assets and meets certain conditions, the sale will be categorised as a TOGC. A TOGC is defined as 'neither a supply of goods nor a supply of services' and is therefore outside the scope of VAT and no VAT is chargeable on the sale. HMRC lists the following conditions
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Non-resident companies with a trading business in the UK are liable to pay UK Corporation Tax on their profits made through a permanent establishment/branch or agency. If the non-resident company is deemed liable to pay Corporation Tax, then its chargeable profits are: any trading income arising directly or indirectly through or from the permanent establishment/branch or agency, any income from property or rights used by, or held by or for, the permanent establishment/branch or agency except dividends or other distributions received from companies resident in the UK, and chargeable gains falling within TCGA92/S10B. There are, however, some differences in the
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HMRC’s VAT Notice 700/1: should I be registered for VAT? has recently been updated. The update reflects the fact that the taxable turnover threshold, that determines whether businesses should be registered for VAT has been frozen at £85,000 from 1 April 2019. In addition, the taxable turnover threshold that determines whether businesses can apply for deregistration remains at £83,000. It was confirmed as part of the Autumn Budget 2018 measures that the taxable turnover registration and deregistration thresholds will be frozen at the current rates until 31 March 2022. Businesses are required to register for VAT if they meet either
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The VAT paid in other EU countries is often recoverable by VAT-registered businesses in the UK, who bought goods or services for business use. The exact rules of what VAT is refundable depends on the other countries' rules for claiming input tax. It is important to note that VAT incurred in foreign countries can never be reclaimed on a domestic UK VAT return. Claims must be made electronically via the tax authority in which the claimant is established, i.e. a claim from a UK company to any other EU country must be submitted electronically to HMRC. The deadline for the
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The VAT system is policed by HMRC and there can be heavy penalties for breaches of the legislation. There are four conditions that must be satisfied in order for an activity to be within the scope of UK VAT. These conditions are that the activity: is a supply of goods or services that the supply takes place in the UK is made by a taxable person is made in the course or furtherance of any business carried on or to be carried on by that person The fourth point above is a condition that needs to be considered when deciding