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The proprietor of the catering business at a golf club has moved away and cannot be traced. A new caterer did not purchase any assets from the previous business, although the menus and pricing remain the same as before. Despite this, HMRC may argue that a transfer of a going concern has taken place for VAT purposes
Our client has just taken over the catering function at a golf club – she is a sole trader and this is her first business. She retains all the takings from the food sales in return for a fixed rent payment of £100 a week to the club for the use of the kitchen and facilities.
The catering function is in effect a separate going concern at the club – the previous proprietor had financial and marital problems and did a runner without telling anybody.
My question relates to VAT. Although my client has not purchased any assets or goodwill from the previous owner she is still taking over a going concern and she is even keeping the same menus and prices.
The VAT legislation as I understand it requires her to take into account the turnover of the previous occupant in establishing her...
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