Intelligent Managed Services Ltd v Revenue & Customs [2013] UKFTT 741 (TC) (13 December 2013)

Intelligent Managed Services Ltd v Revenue & Customs [2013] UKFTT 741 (TC) (13 December 2013)

The Tribunal held that the transfer of IMSL's business to VMMSL, a member of the Virgin Money VAT group, did not constitute a transfer of a going concern or a total transfer of business assets for VAT purposes because the transferee only made supplies to another member of the same VAT group and not to persons outside the group. The assets transferred did not amount to a going concern at the time of transfer, and the legislative framework does not permit a 'look-through' to supplies made by other group members to external parties.

Citation
[2013] UKFTT 741
Parties
Appellant: Intelligent Managed Services Limited; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
13 December 2013
Procedural Posture
VAT Appeal / Final Judgment
Outcome
Appeal dismissed
Legal Topics
Transfer of a Going Concern, VAT Group, Business Asset Transfer, Partial Exemption, TOGC, TTBA
Tax Law VAT Transfer of a Going Concern VAT Group Business Asset Transfer Partial Exemption TOGC TTBA

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Parties

Intelligent Managed Services Limited

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Appeal / Final Judgment

Legal Issues

  1. 1 Whether the transfer of a business to a member of a VAT group can be a transfer of a going concern (TOGC) or a total transfer of business assets (TTBA) if the transferee makes supplies only to another member of the same VAT group

Ratio Decidendi

The Tribunal held that the transfer of IMSL's business to VMMSL, a member of the Virgin Money VAT group, did not constitute a transfer of a going concern or a total transfer of business assets for VAT purposes because the transferee only made supplies to another member of the same VAT group and not to persons outside the group. The assets transferred did not amount to a going concern at the time of transfer, and the legislative framework does not permit a 'look-through' to supplies made by other group members to external parties.

Court Disposition

Appeal dismissed

Orders

  • VAT assessment of £960,638.29 upheld
  • No TOGC or TTBA treatment permitted for the transaction