VAT Bill Loans – Business Loans To Pay VAT Bills

What are VAT Bill loans?

VAT loans are unsecured, with repayments typically spread over 3 months. Often, no PG is required and VAT funding can be renewed on a draw-down basis each quarter.

Businesses can access between £1,000 and £500,000, repaying the money in small monthly installments with interest. After applying for a VAT bill loan, you can expect the funds to be released within 24 hours.

The facility is easy to set up and, once active, can be renewed quarter on quarter, on a rolling basis.

With a short term VAT loan, often there is no requirement for a personal guarantee.

What businesses apply for VAT bill loans?

All businesses that are required to make regular VAT bill payments can apply for VAT funding. Any business that suffers from irregular cash flow could benefit from a commercial VAT loan. Turning a quarterly payment in advance into a monthly payment in arrears improves and steadies cash flow.

We receive applications from a variety of business types from a diverse range of industries. Typical applicants include:

• Small Businesses
• Limited Companies
• New Businesses
• Sole Traders

 

Applying For A Loan To Pay A VAT Bill

Step 1:

Click on the application page. To ensure we match you with the best lender, we will ask for more information about your business. Please be ready to tell us:

• The name of your business
• The number of years you’ve been in business
• Your average monthly card sales
• The amount you are looking to borrow to cover your VAT bill obligations

 

Step 2:

You will then be directed to the next step, where you will be asked to disclose:

• Your title, first name and surname
• Your position in the business
• Your email and telephone number

 

Step 3:

Carefully read through the terms and conditions, if happy, click ‘get my quote’. From here, one of our approved business finance suppliers will help you find the correct lender for your VAT bill loan, and will process and review your application.

 

Step 4:

One of our account managers will be in touch by phone or email to discuss the terms of your loan or advance agreement.

 

Step 5:

After carefully reading through the terms of agreement, please sign the relevant documentation and return it to the lender. You will then be able to access the funds in your account in just 24 hours.

Everything You Need To Know

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When Do I Register For VAT?

When your business grows and gets to a stage where its annual sales of taxable goods and/or services exceed the £85,000 VAT threshold, you must register for VAT.

After registering, HMRC will send you a VAT registration certificate which confirms your VAT number, when to submit your first VAT Return and payment and your ‘effective date of registration’.

Businesses can also choose to voluntarily become VAT registered, providing that the goods and services they sell aren’t exempt from VAT charges. After registering, there are certain legal responsibilities that business owners must follow including:

• Charging the right amount of VAT
• Paying any VAT due to HMRC
• Submitting VAT returns
• Keeping VAT records and a VAT account

 

VAT Returns

Business owners of registered UK businesses are typically required to submit a VAT Return to HMRC every 3 months, regardless of whether the business has any VAT to pay or reclaim. This 3 months is referred to as your business ‘accounting period’, and the VAT Return records:

• Your total sales and purchases
• The amount of VAT owed
• The amount of VAT that can be reclaimed
• What your VAT Refund from HMRC is

 

Paying Your VAT Bill

You must pay your business’ VAT bill before the deadline passes. The deadline will be shown on your VAT Return and the only exception to deadlines are if you use the Annual Accounting Scheme or ‘payments on account’. As with Corporation Tax, you must ensure your payment reaches HMRC’s bank account before the deadline. Surcharges apply if you don’t manage to make payments on time.

Payment Method	Time Taken
CHAPS	Same day / next day
Online Banking	Same day / next day
Telephone Banking	Same day / next day
Direct Debit	3 working days
1st Time Direct Debit	5 working days
Bacs	3 working days
Bank / Building Society	3 working days

HMRC sets up VAT online accounts for all businesses registered for VAT. You can check your VAT Return and payment deadlines online.

How To Pay Your VAT Bill

Businesses are required to pay VAT to HMRC electronically, most commonly through internet banking and direct debit. The latest rules state most businesses are not allowed to pay by cheque. If you are having issues paying your VAT, get in touch with HMRC as soon as you can.

What should I do if I’m not sure whether I’ll be able to pay my VAT bill?

 

If you don’t think you’ll be able to pay before the deadline:

Contact Us – We can put in place a bespoke VAT funding facility in a matter of hours and pay HMRC directly on your behalf.

 

If you miss your deadline:

SME Loans can fund VAT loans retrospectively, i.e. after the deadline. However, it is also a good idea to contact the relevant HMRC department/office that sent you the letter explaining you have missed your deadline.

Contact: Self Assessment Payment Helpline – 0300 200 3822

In certain situations, HMRC allows businesses to set up payment plans to pay their VAT bill in instalments. The payment plans exist to help businesses that have poor cash flow and are struggling with payments. These payment plans increase the amount of time you have to pay your bill. When setting up your payment plan, you will need to have your password and Government Gateway User ID to hand.

Please be aware that if you don’t take these actions when it comes to paying your VAT bill, enforcement actions that HMRC can take as a way of collecting the tax you owe include:

• Collecting the owed money through your earnings or pension
• Involving debt collection agencies
• Taking things you own and selling them
• Removing the money from your bank account directly
• Taking you to court
• Closing down your business or declaring you bankrupt

Such repayment options are known as TTP (Time to Pay). It is important to note that whilst HMRC has been more lenient due to Covid, traditionally they will limit businesses to only 1 or 2 Time to Pay arrangements. Once this is used, a business would have no option but to use funding solutions at times when they do not have the cash-flow to support paying the quarters VAT in full.

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