VDIM9010 | Circumstances affecting default interest: Transfer of a going concern

This guidance deals with interest matters in respect of prescribed accounting periods starting on or before 31 December 2022. Interest matters with effect from 01 January 2023 are dealt with under Finance Act 2009.

Please see Compliance Handbook page CH140000 onwards to find the new interest rules guidance.

If there has been a Transfer of a Going Concern (TOGC) and a new registration number has not been allocated, that is VAT68 action has been approved, interest may be charged to the new legal entity for under declarations made by the old legal entity. Section 49 (3) (a) of the VAT Act 1994 does not exclude default interest (which is charged under Section 74) from applying in such circumstances.

S49(3) Regulations under subsection (2) above may, in particular, provide

‘(a) for liabilities and duties under this Act (excluding sections 59 to 70) of the transferor to become, to such extent as may be provided by the regulations, liabilities and duties of the transferee.’