UK VAT Loan - VAT Lending

Dealing with the challenges of VAT is an unavoidable aspect of running a business in the present era. Applying for a VAT loan can prove to be an excellent way of alleviating these costs.


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UK VAT Loan - VAT Lending

Managing the Costs

Companies involved in the trade of goods and services are particularly vulnerable to VAT, and as a preemptive measure to manage these costs, it’s advisable to incorporate VAT tax into the prices of your products. The current rate, as of 2019, is 20% for goods and services sold to customers and other businesses.

VAT becomes applicable once your turnover surpasses the £85,000 threshold. Given that this becomes an ongoing cost after reaching this threshold, it is wise to take proactive steps. Fortunately, even if you find yourself dealing with escalating costs, applying for a UK VAT loan can assist in keeping expenses under control.

The argument in Favour of a VAT Loan

Companies specialising in VAT lending understand the challenges faced by businesses. Utilizing a VAT loan in the UK from one of these VAT lending companies offers several hidden advantages, such as:

– Preventing lost revenue following an unexpected VAT bill
– Managing challenges posed by unusual payroll periods
– Enhancing company cash flow, thereby sustaining periods of growth and expansion
– Mitigating the threat of late payment fines

Moreover, VAT loans can address various situations. For instance, a VAT bridging loan enables an enterprise to cover the additional VAT-related costs of a commercial property purchase.

Applying for a UK VAT loan or a VAT bridging loan will, in essence, allow you to deal with the unexpected while maintaining the essential affairs of your business.

VAT lending operates on a fundamental principle. In accordance with UK law, VAT returns must be submitted every three months. With a VAT loan, you have the flexibility of paying this quarterly tax on top of your loan. Alternatively, you can spread your VAT loan to cover the entire year’s costs. Either way, with a VAT loan, you can have peace of mind knowing that your business won’t be burdened with any unexpected tax costs in the future.

Even with a well-implemented and carefully managed VAT loan plan, there may still be situations where keeping up with payments becomes challenging. In such instances, HMRC is willing to assist new businesses with their bills, whether by extending the timeframe for payments or addressing the fluctuating cash flow periods of a business. While a VAT loan can be helpful in these scenarios, it’s essential to bear in mind that the loan will also need to be repaid. Therefore, a proactive approach to saving and maintaining cash flow is imperative.

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The experts at MJ Capital Finance can work with you to ensure there is business funding available at times when it’s needed. Why not get in touch to discuss your requirement for a UK VAT Loan in more detail? We’ll happily talk you through all available options because if your business doesn’t qualify for a UK VAT Loan, there are lots more loan products that could be more suitable.