Amanda Cargill & Kelly McWilliams t/a The Pende Cafe v Commissioners for Her Majesty's Revenue and Customs
Decision date: 22 December 2009
Neutral citation: [2009] UKFTT 381 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
The appeal concerned whether the sale of The Courtyard to Amanda Cargill & Kelly McWilliams constituted a transfer of a going concern (TOGC) making the purchasers VAT‑registered from 05.06.08. The Tribunal found on the facts that no TOGC occurred because the purchasers did not acquire the alcohol licence, only limited assets were transferred, and the business materially changed from a licensed fine‑dining restaurant to an unlicensed seaside café. HMRC’s voluntary registration based on an extrapolated annual turnover was unreliable because it ignored seasonality and the change in the business.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
A transfer will be less likely to amount to a TOGC where the transferee cannot carry on the vendor’s business as it was (for example through non‑transfer of a material licence and substantial change in character of the business). Also, an extrapolation from a short high‑season turnover to an annual figure must account for seasonal fluctuations and relevant changes to trading before justifying VAT registration.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The notes indicate commentary that HMRC officers should take care in applying precedents, in documenting whom they interview, and avoid pressuring vendors into voluntary registration where compulsory registration would better protect appeal rights; absence of written transfer of goodwill or licences is a factor against finding a TOGC.