Buying a business's assets can avoid VAT if the sale qualifies as a transfer of a going concern (TOGC). Buying a company's shares is generally outside the scope of VAT.
When an asset purchase can be a TOGC
The main conditions are:
- you carry on the same kind of business the seller did, using the assets you've bought
- you're VAT-registered, or will be, where the seller is VAT-registered
- it's a business transfer, not just a sale of individual assets
- for property, any option to tax has to be dealt with correctly, by the right date
Why it matters
If a sale that should be a TOGC is treated as taxable, or the other way round, VAT can end up being charged or reclaimed wrongly. That can affect your cash flow and the funding you need.
Get advice
The conditions are detailed, especially where property is involved. Your accountant should confirm the position before completion. See HMRC's guidance on transferring a business as a going concern.
Last reviewed: 8 October 2026