Restaurant is going concern

The taxpayer owned a property. She let out the basement to P who ran a restaurant from the premises. He registered for VAT with effect from 1 June 2006.

P decided to give up the restaurant in 2009 and gave notice of his tenancy to the taxpayer – who took over the business and hired her son as a chef. She paid P £6 000 for the fixtures and fittings.

HMRC said there had been a transfer of a going concern to the taxpayer who should have registered for VAT on her first month of trading in June 2009.

The taxpayer claimed she had not taken over a going concern. The business was run differently from how P had operated it. The opening hours were not the same there was a different style of cooking and new staff and suppliers. There had also been a break...