Assets or business?

The taxpayer company bought printing machinery and office equipment in May 2011 from Nowelle which was about to go into liquidation and was majority owned by the taxpayer.

Nowelle included VAT in the price of the assets sold to the taxpayer which reclaimed the VAT as input tax. HMRC refused the claim saying the sale constituted a transfer of a going concern.

The taxpayer had many of the same customers as Nowelle and operated from the same premises. Most of the workers had previously been employed by Nowelle and the director had been a director of Nowelle.

The taxpayer appealed saying it had not purchased Nowelle’s business just its assets.

The First-tier Tribunal found that printers and office equipment were transferred to the taxpayer from Nowelle – and 15 of Nowelle’s 22 employees began work with the taxpayer which operated from Nowelle’s premises....