Insolvency (VAT Notice 700/56)

If you take insolvency appointments, more of HMRC's VAT guidance is now in one place, and it's written for you. As of 1 October 2026, another large part of VAT Notice 700/56 has moved into the Insolvency Practitioner's Handbook.

This is the fourth migration this year, after earlier moves in March, July and August. The handbook is fast becoming the main reference for VAT on insolvency appointments.
This time, sections 3 (Notifications), 5 (Returns), 10 (Bad debt relief), 15 (Partial exemption), 17 (Law of Property Act), 18 (TOGC) and 23 (Unincorporated associations and clubs) have been replaced with links to the matching handbook sections.

Why it matters for office holders:

Notifications, returns and TOGC are part of nearly every appointment. Guidance on these used to be split between the notice and the handbook. It now sits in one document, and that's the version HMRC maintains. HMRC has said it will review and update sections over time, so a copy saved at the start of a case may already be out of date by the time you close it.

There is also a knock-on effect on the other side of the table. Creditors' advisers dealing with bad debt relief, and buyers' advisers on a business sale out of administration, will now be reading the same handbook you are. It's worth making sure your position on TOGC and on creditor queries matches HMRC's current wording.

What to do now:

*Update appointment checklists, case templates and internal procedures that quote 700/56 section numbers.
*On sales out of administration, check that TOGC wording in sale agreements reflects the current handbook guidance.
*Check the handbook regularly rather than relying on saved copies, as HMRC has said it will keep revising it.
*Expect the rest to follow. Dividends, Crown set-off and VAT groups are still in the notice for now.

The law hasn't changed, but the guidance is now in one handbook, and HMRC will keep updating it.

Insolvency (VAT Notice 700/56): https://lnkd.in/eh5TxkTU
Insolvency Practitioner's Handbook: https://lnkd.in/eNPwGKcD