Article contributed by ACCA
A recent tribunal decision has had a significant impact on stamp duty land tax and the VAT attached to a transfer of a going concern.
A recent tribunal decision has had a significant impact on stamp duty land tax and the VAT attached to a transfer of a going concern.
Following the Tax Tribunal decision in Robinson Family Ltd. [2012] UKFTT 360 (TC), TC02046, HMRC has issued Revenue & Customs Brief 30/12.
The case concerned a transfer of a going concern (TOGC). A TOGC is where if certain conditions are met the sale of the assets of a business or part of a business when sold as a going concern are not considered to be a supply for VAT purposes. One of the conditions is that the assets are used in carrying on the same kind of business.
HMRC’s Revenue & Customs Brief 30/12 looked more at the VAT issue and stated that it would be considering the stamp duty issue and will issue guidance on whether a retrospective claim for overpaid stamp duty can be administered and paid back in cases of overpayment.
For further background information, please view ACCA’s article about Revenue & Customs Brief 30/12.
In Revenue & Customs Brief 08/13, HMRC states:
‘There may be situations where for a variety of reasons, not just those discussed in Brief 30/12, tax was charged on the grant of an interest in land when in fact the transaction qualified as the transfer of a going concern, and no VAT was chargeable. This would have resulted in SDLT being assessed on a VAT-inclusive value rather than a VAT-exclusive one. If a business believes that it has overpaid SDLT on such a transaction, it may make a claim for overpayment relief.’
HMRC is encouraging retrospective claims; if you believe that due to HMRC misinterpretation of the law and the RFL case you have overpaid VAT or stamp duty, a claim can be filed with HMRC subject to the usual time limits.
For details on VAT please view VAT Notice 700/45.
For details on stamp duty land tax, see HMRC’s Manual reference, SDLTM52500 and SDLTM5400. The usual time limit of four years will apply to both taxes.