26. Transfer of intangible business assets deemed not to be supply of services

Summary

This section provides that the transfer by an accountable person to another accountable person or a flat-rate farmer of the goodwill or other intangible assets of a business, in connection with the transfer of a business, is not a supply of services. This also applies to the transfer of such assets by a person who is not an accountable person to another person. This provision matches the relief provided for in section 20(2)(c) in relation to goods.

(1) For the purposes of the section, accountable person does not include a person who is accountable only by virtue of the making of intra-Community acquisitions or received services from abroad.

(2) The transfer of the goodwill or other intangible assets of a business, in connection with the transfer of a business, is not a supply of services. The effect of the provision is that if any consideration is paid by a purchaser of a business in connection with the transfer, e.g. a payment for the goodwill of the business, the transaction will not be regarded as a supply of services for VAT purposes, and so will not be taxable.

Relevant Date: Finance Act 2019