New or transferred?

A restaurant operated by the taxpayer through a limited company ceased trading in February 2009. The company was later struck off the Companies House register and dissolved. Suppliers repossessed the remaining stock.

A few days after the company had ceased trading the taxpayer reopened the restaurant as a sole trader. The only asset he acquired from the previous business was goodwill. He applied to be VAT-registered with effect from 1 September 2009. HMRC said the taxpayer was liable to be registered for VAT as soon as he began trading on the basis there had been a transfer to the taxpayer of a going concern.

The taxpayer appealed.

The First-tier Tribunal said the taxpayer “fundamentally” saw the eatery as the same business as previously but “just free of the debts” when he restarted as a sole trader. Little changed apart from a minor alteration to the name. The restaurant...