HMAG30060 - Registration and approval: transfer of a going concern
Source: gov.uk (2025-03-17)


Our transfer of a going concern (TOGC) policy covered in paragraph 2.1 of Notice 196 was introduced following the Court of Appeal’s judgment in New London College Limited v SSHD [2012] EWCA Civ 51, where the Court of Appeal held that licences (and similarly approvals/ registrations etc) are neither assignable, marketable nor transferable. A similar conclusion was reached by the First Tier Tribunal (Tax Chamber) having considered the above case in Safe Cellars Limited v HMRC [2017] UKFTT 78 (TC), when dealing with excise approvals, in that, they are issued to a particular person and are not assignable or transferable.

Where an existing business (including all its assets, liabilities, and obligations) is to be sold or transferred to a new owner, the existing approval, authorisation, or registration will not transfer to this person on the sale/transfer where the sale is from one legal entity, to be carried on as a business in the name of another legal entity. For example, a sole proprietor selling to another sole proprietor, a partnership, or a limited company. Please note that this does not apply if the actual approved legal entity remains the same after a change of ownership, for example, following a complete transfer of company shares. See the section below on changes to a limited company’s ownership.

Where a business is being sold and will be carried on in the name of a different legal person the new owner must, to be able to carry out a controlled excise activity:
- have any necessary approval, authorisation, or registration in place before the sale or transfer takes place.
- be ‘fit and proper’ - see the fit and proper test section below.
- have any required financial security in place.
Whilst the new owner should normally apply at least 45 days before the date they need approval, authorisation, or registration (a shorter period can be agreed where necessary).

The business should normally apply for the approval using the forms described in our public Notice 196, providing details of the original owner’s approval. However, we can provide a different arrangement where the facts of the case justify a change in approach, for example, where we are satisfied that the new owner has already been found to be fit and proper to hold the excise approval in question. This could be where the transfer of an existing warehouse (or whole business) is between two different authorised warehouse-keepers. In such cases the case officer should discuss any revised arrangements directly with the new owner.

At the point that new authorisations, approvals, or registrations apply, the approvals granted to the original owner before the transfer will normally need to be cancelled (an exception would be where a warehouse keeper is transferring a warehouse but still occupies other warehouses, in which case the warehouse keeper approval would need to be retained). The case officer involved in agreeing the transfer should co-ordinate with the new and original owners to make sure that approval cancellation happens at the point that ownership changes and the new approval applies.

If a new owner is not approved to carry out controlled activities at the point of transfer, then the case officer should:
- assess the new unregistered owner for any excise duty due on excise goods they held whilst not approved, authorised, or registered
- Consider issuing the new owner with a financial penalty for breaching approval, authorisation, or registration requirements
- Consider whether any duty suspended excise goods in their possession relating to that controlled activity are liable to forfeiture
Changes in an approved limited company’s ownership

A limited company’s approval should remain extant following a complete transfer of company shares. We must be notified of any changes to persons with significant control or other key persons involved in the company such as directors or company officials. We define a person with significant control as someone who holds:
- more than 25% of shares in the company.
- more than 25% of voting rights in the company.
- the right to appoint or remove persons from the board of directors.
Whilst shares can be regarded as ownership units, UK law requires persons to be registered as a member of the company before they can be properly regarded as a shareholder. The “share” corresponds to the amount of money invested in the business. Also, Members of the company do not necessarily need to be shareholders. The concept of company membership is an important one as it enables the company to refuse a person buying shares from becoming an actual shareholder of that company. So, a person could buy shares, but not be an actual company shareholder with the legal rights of ownership etc. To have this right they must be accepted by that business as a member. It is for these reasons that when we become aware of a transfer of shares, the approval should be reviewed based on the new shareholding to establish that any new controlling Members are fit and proper.

Where persons with significant control or other key persons involved in the company are not fit and proper, consideration should be given to either cancelling the existing limited company approval or adding conditions and restrictions to the approval to limit any new risk identified. Such action should only be taken where it is proportionate to the concerns identified.﻿