We're thinking about buying a business with freehold property and I have the following queries:

1. Do you pay stamp duty on commercial property, if so how is this seperated in the purchase of the business (i.e. how do apportion the freehold of the business vs the capital assets and goodwill)?
2. Do you pay VAT on the purchase of a business (and can you claim it back in your own business as part of your 'purchase ledger')?

That's a BIIIIG question!...and definitely requires a different answer in many different situations.

As Ian Thompson says it is a big question but the basics are quite simple. You will pay SDLT on the property, there is no avoiding it and it is payable on completion unless it is an exempt property or in a Disadvantaged Areas Stamp Duty Exemption area. The lists used to be on the Valuation Office website.

If the property has been registered for VAT in the past then you will, more than likely, also pay VAT on the purchase price. Many commercial properties have been registered but the circumstances and reasons vary considerable so you should ask the vendors solicitor for verification on the position. It is wise to avoid making your own decision unless you have a confirmatory letter to you from HMRC.

That property part of the transaction will be a completely separate transaction to buying the business itself but many fixtures and fittings are VATable so again if it concerns you a schedule can be provided by the vendors solicitor and accountant so that you can make an assessment of what is payable.

Take advice for your situation.

Although I would not give an answer to the original question in a few lines, to illustrate why it is a big question, the VAT on fixtures etc may not be payable if the business can be brought within the Transfer Of Going Concern rules.

you need to speak to an accountant, there are ways of limiting your liability to the various taxes

You can use SDLT planning methods to significantly reduce your Stamp Duty Land Tax costs on the purchase, there's a calculator which can show you exactly how much you could save at http://bit.ly/afbdGm - if you are VAT registered your costs will be even lower as you can claim back the VAT on the legal fees involved.