Input tax on property purchase

The taxpayer acquired a commercial property owned by its sole director Mr Singh in March 2016. He was registered for VAT and had opted to tax the site but did not initially charge VAT because the transfer value of £915 000 to the taxpayer was treated as outside the scope of VAT as a transfer of a going concern (TOGC). However the taxpayer did not register for VAT until 1 May 2016 so failed one of the key conditions of a TOGC ie the buyer must be registered at the time of the transaction if the seller is registered.

As a result HMRC collected output tax from Mr Singh’s sole trader business which the taxpayer claimed as input tax on its September 2018 return - submitted to HMRC on 26 November 2018. HMRC disallowed the repayment claim of £183 601 which consisted of...