What does Togc stand for?

transfer of a going concern
The phrase ‘transfer of a going concern’ or ‘TOGC’ is widely used in VAT terms but often misused and misunderstood. In this article we set out to clarify the basics of what the term means and when it applies.

What is a Togc property?

In certain circumstances, it is possible to structure a commercial property sale so that it qualifies as a transfer of a going concern (TOGC). Where the TOGC rules apply, the sale of the property falls outside the scope of VAT; this means that no VAT is chargeable.

Is a Togc outside the scope of VAT?

If the sale of a business is treated as a TOGC it is treated as neither a supply of goods nor a supply of services and therefore outside the scope of VAT. No VAT is then chargeable on the sale.

Do you have to pay VAT on the sale of a business?

Sale of trade and assets Under normal circumstances, the sale of business assets would be subject to standard rated VAT. If TOGC status applies, no VAT is charged on the transfer of the assets. The conditions for a TOGC to apply for VAT purposes are: the entire business is transferred as a going concern; or.

What does togc stand for in real estate?

One of the other changes surrounds HMRC Policy recognising TOGCs on new developments of dwellings. HMRC’s previous view was that when a property business is transferred, for the transfer to qualify as a VAT-free TOGC, the seller had to transfer the whole of their interest in the property to the buyer. Acronyms browser ? Full browser ?

What does transfer of a going concern ( togc ) mean?

What does Transfer of a going concern (TOGC) mean? Normally the sale of business assets will be subject to VAT at the appropriate rate for the assets in question. However, the sale of assets as part of a business which is a ‘going concern’ (TOGC) will be treated as outside the scope of VAT provided certain conditions are met.

Why is it important to know about the togc?

The TOGC provisions are intended to simplify accounting for VAT when a business changes hands. The main purposes are to: What if it goes wrong? TOGC treatment is not optional.

Can a business be transferred as a togc?

A transfer of a business as a going concern (TOGC) however is the sale of a business including assets which must be treated as a matter of law, as ‘neither a supply of goods nor a supply of services’ by virtue of meeting certain conditions.