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The VAT, tax and accounts work on buying or selling a pub, restaurant, café or hotel, from the figures a buyer reads to the transfer of a going concern.
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VAT Notice 700/9 treats the sale as a transfer of a going concern when every one of these holds. If one fails, VAT is charged on the assets in the normal way.
VAT charged in error on a transfer of a going concern cannot be reclaimed by the buyer. The seller has to cancel the invoice and refund it.
A buyer looks at takings, gross profit on food and on drink, wages as a share of sales and the rates bill. Accounts that show each of those year by year, with weekly records behind them, answer the buyer's questions before they are asked.
On the buying side, we check those same figures in the seller's accounts and records before you commit.
Where a company claimed full expensing on equipment, selling it brings a balancing charge on the disposal value, or half of it for special-rate assets claimed at 50%.
Where the seller has opted to tax the property, the buyer has to opt to tax too, notify HMRC in writing no later than the relevant date, and tell the seller that its option will not be disapplied. Without that, VAT is due on the property even when the rest of the sale is a transfer of a going concern.
Not where the sale is a transfer of a going concern and every condition is met. VAT must not be charged on the assets transferred. If VAT is charged in error the buyer cannot reclaim it, and the seller has to cancel the invoice and refund the VAT.
The buyer has to opt to tax the building too, notify HMRC in writing by the relevant date, and tell the seller that its option will not be disapplied. Otherwise VAT is due on the property.
Where a company claimed full expensing, the sale brings a balancing charge on the disposal value of those assets, or half of it for assets claimed at 50%.
Buzz Financial Services is a trading style of Equity & General Financial Services Limited, authorised and regulated by the Financial Conduct Authority (FCA 474163).
Works out the capital gains tax on selling a business, with Business Asset Disposal Relief at 18% up to the £1 million limit.
Covers Business Asset Disposal Relief, inheritance tax relief on business assets, and using a pension before a sale.
Buzz Financial Planning is a trading style of Buzz Accounting Ltd (company 15182358). Financial planning is not regulated financial advice.
Covers the four ways an owner leaves a business, what makes it worth something to a buyer and how a sale changes a retirement plan.
Sets out the six parts of a written plan, including every year to age 100 with UK tax applied and the events that would break it.
Send us the heads of terms or the last three years of accounts. We will check the VAT position and the figures a buyer will rely on.