Auction purchases

Can a TOGC Work at Auction?

PropertyVAT Team · Updated 21 October 2026 · 3 min read

TOGC at auction is the highest-stakes version of an already technical question. The prize is the same — no VAT, and no stamp duty on VAT. The margin for error is far smaller.

Why auction is harder

In a private treaty sale, exchange and completion are separated by weeks you can use. At auction, the contract forms when the hammer falls.

That matters because the relevant date for several TOGC conditions is generally tied to the date of the contract, not completion. So the steps you would normally take between exchange and completion have to happen before you bid.

What has to be in place before you raise your hand

1. The buying entity exists. Incorporated, with directors appointed.
2. It is VAT registered. Not applied for — registered, with a number.
3. An option to tax has been notified, where the seller has opted and TOGC is intended.
4. You intend to continue the letting business. If you plan to occupy the building, TOGC is unlikely to apply.
5. You have read the legal pack and understand what the seller is asserting.

Registration alone takes weeks. If you find a lot on Monday and the auction is a fortnight away, TOGC may simply not be achievable for you, whatever the seller intends.

The legal pack is not confirmation

A pack stating that the sale is to be treated as a transfer of a going concern tells you the seller's intention. It cannot tell you whether the conditions are met, because several of them depend on facts about you — your registration, your option, your intentions.

Two bidders in the same room can have genuinely different VAT outcomes on the same lot.

Bid on the pessimistic case

This is the practical rule that protects you.

Work out your maximum bid assuming VAT is payable:

• Hammer price
• Plus 20% VAT
• Plus SDLT on the VAT-inclusive figure
• Plus premium, legals and searches

If the TOGC then works, you have bought better than you planned. If it fails, you are still able to complete.

A bidder who calculated on the TOGC succeeding, and finds at completion that it has not, is short by 20% of the price with the deposit on the line.

Questions for the auctioneer and your solicitor

• On what basis is TOGC treatment asserted?
• Is the property let, and will the lettings continue to completion?
• What is the relevant date by which the buyer must have opted and notified?
• What does the contract say if TOGC treatment fails — who pays the VAT?
• Can completion move if the position changes?
• Will the seller issue a valid VAT invoice if VAT becomes payable?

That last one matters more than it sounds. Without a valid invoice your reclaim stalls, and any bridge you arranged runs longer than planned.

Have the fallback ready

Even where every condition looks satisfied, a tenant can vacate between the auction and completion. The facts can move.

Specialist VAT funding can complete in around 48 hours, which is enough to rescue a failed TOGC inside most completion windows — provided the buying entity is already VAT registered.

Which it will be, if you prepared for the TOGC properly. The preparation that delivers the TOGC is the same preparation that saves you when it fails.

This guide is general information, not legal or tax advice. Take advice on the specific lot and your own position before bidding.