Transferring a VAT number with form VAT68

A buyer can take over the seller’s VAT registration number when a business is transferred as a going concern, or when the same business changes legal form, if both sides sign form VAT68 and HMRC agrees. The price of keeping the number is that the buyer inherits the seller’s VAT position: unpaid VAT, outstanding returns and errors in past returns become the buyer’s, while the seller loses any right to repayments. Many buyers therefore take a new number instead.

Tax investigation insurance from £108.75 a year (£9.06 a month).Pays up to £100,000 of your accountant's fees if HMRC opens an enquiry. No excess. Buy online in a few minutes.

See my price in 2 questions How the cover works Accountant? Offer cover to your clients or call 01795 841 310

When can a buyer keep the seller’s VAT number?

Section 49(2) of the VAT Act 1994 lets regulations secure continuity where a business is transferred as a going concern and the buyer is registered in substitution for the seller. Regulation 6(1) of the VAT Regulations 1995 sets the conditions: a business or part of one is transferred as a going concern, the seller’s registration has not already been cancelled, the seller’s registration is to be cancelled and the buyer becomes liable or is accepted for registration, and both parties apply on the form HMRC publishes. HMRC may then cancel the seller’s registration and register the buyer under the same number from the date of transfer.

GOV.UK gives two common cases: buying a business and wanting to keep its number, and a change of legal status such as a partnership becoming a sole trader or a sole trader incorporating. Whether the sale itself is a transfer of a going concern is a separate question covered in transfer of a going concern.

When will HMRC refuse?

The VAT68 form (version HMRC 05/26) says you can apply only if you are not already registered, you become liable or entitled to register from the transfer date, the previous owner’s registration is cancelled from that date and the previous owner agrees. It says HMRC will usually refuse if the previous owner:

is still liable to be registered
has unpaid VAT, penalties or interest, or is appealing against them
was part of a VAT group
did not make any taxable supplies while registered

HMRC’s VAT Registration Manual at VATREG30100 adds that a corporate seller must not have been dissolved before the form was signed. VATREG30200 says the decision to reallocate is discretionary but there is a right of appeal against refusal.

Worried about an HMRC check? Tax investigation insurance pays your accountant’s fees if HMRC opens an enquiry or compliance check. Solar Protect cover pays up to £100,000 with no excess. It never pays tax, interest or penalties.

From £108.75 a year (£9.06 a month) for individuals, £117.57 for sole traders and £207.50 for companies and partnerships, including IPT and the £20 admin fee.

See my price in 2 questions or call 01795 841 310.

★★★★★ Rated 4.9 out of 5 on Trustpilot from over 160 reviews

What liabilities come with the number?

Regulation 6(3) transfers to the buyer any liability of the seller at the transfer date to make returns or account for VAT, and any right of the seller to input tax credit or repayment. VAT Notice 700/9, paragraph 3.3, says the consequences are legally binding on both parties: the buyer is liable for any outstanding VAT from the seller’s registration, including VAT on stocks and assets the seller keeps, and the seller is no longer entitled to repayments or unclaimed input tax for periods before or after the transfer. The buyer also takes over unclaimed bad debt relief and any obligation to repay input tax where the seller’s suppliers have claimed bad debt relief or bills remain unpaid after 6 months.

HMRC’s internal guidance draws the line on penalties:

Tax and interest follow the number. VATREG30000 says the buyer can be assessed for the seller’s errors before the transfer, with related interest.
Penalties for the seller’s conduct do not. The same page says the buyer is not liable for penalties under sections 59 to 70 for the seller’s actions, and VATREG30050 says the seller remains liable for penalties for its own conduct before the transfer.
Late submission points stay behind. HMRC’s penalty points guidance says points built up by a business taken over as a going concern do not transfer, even if the number does. See VAT penalty points.

Records go with the number. Regulation 6(3)(f) makes the buyer responsible for preserving the business records unless HMRC directs otherwise at the seller’s request, and Notice 700/9, paragraph 3.4, says the seller keeps the records only where the number is not transferred.

How is form VAT68 completed and sent?

GOV.UK and Notice 700/9, section 10 (which has force of law), say VAT68 must be completed together with an application to register for VAT. The current form explains the process:

The buyer applies online to register, selecting transfer of a going concern as the reason and choosing to keep the existing number. If the buyer is a partnership, a VAT2 is also needed; see registering a partnership with VAT2.
The buyer completes and signs Part 1, agreeing to send the first return covering the whole period, send any outstanding returns, and pay VAT due on the seller’s supplies before the transfer, including on stocks and assets the seller kept.
The seller completes and signs Part 2, agreeing it has no right to money HMRC pays the buyer and giving the value of stocks and assets it keeps and a contact address.
For a partnership all partners sign. Where the change follows a death, the executor signs.
The form is emailed with the online application reference starting VRS, or posted to the address on the form.

The seller should not file a VAT7. HMRC treats the VAT68 as the seller’s cancellation request, as regulation 6(2) provides, and the form warns that a transfer cannot be undone once made. VATREG29850 notes that only the declaration page is legally prescribed.

What practical steps follow the transfer?

Direct Debits do not transfer; the buyer sets up new ones.
The seller removes its agent’s access, and the agent sets up a new authorisation for the buyer. GOV.UK says a buyer who wants to keep the seller’s accountant must contact HMRC within 21 days of the transfer application.
The buyer replaces any self billing arrangements.
The number stays linked to the seller’s business tax account until removed, so the buyer should check who can still access it.
An option to tax a property does not transfer even if the number does (Notice 700/11, paragraph 2.3), and Notice 700/9 says customs and excise approvals generally need new applications.

Should a buyer keep the number?

Keeping the number gives customers and suppliers continuity: invoices, contracts and systems carry on with the same number. Against that, the buyer accepts exposure to errors it did not make and cannot fully check. A buyer that cannot review the seller’s VAT returns and records with confidence will usually prefer a new number. A sole trader incorporating, who is both seller and buyer, faces less risk because the history is their own; see sole trader to limited company.

A worked example

Illustration only. A buys a café from B as a going concern on 1 June and both sign a VAT68.

A files the return covering B’s trading in the period of transfer and pays any VAT due on it.
In October HMRC finds B underdeclared £3,000 of VAT the previous year. The tax and interest can be assessed on A; any penalty for B’s inaccuracy is a matter for B.
B’s repayment claim for VAT on a final equipment invoice now belongs to A, not B.

What mistakes do parties make?

The seller cancelling with a VAT7 before the VAT68 is signed, which ends the chance to transfer.
Not filing the buyer’s online registration application alongside the form.
Agreeing the transfer without price protection for inherited VAT.
Assuming the option to tax and other approvals travel with the number.
Using a VAT68 where the business is closing rather than being sold; see VAT deregistration.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

Related Accountapedia entries

Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.