Going-Concern Criteria

Instead of starting up a new business yourself, you might buy a business that someone else has set up and already in operation. This is known as taking over a business as a going-concern.

To be a going-concern, a supply must meet these criteria:

• It must be the supply of the whole or stand-alone part of a taxable activity, from a registered person to another registered person.
• It must be the supply of all the goods and services necessary for the continued operation of the activity.
• Both parties must agree in writing that there is a supply of a going-concern.
• Both parties must intend that the activity is capable of being carried on as a going-concern by the purchaser. Such a sale by one registered person to another registered person is zero-rated (VAT content is nil).