What is a VAT loan?

As almost all business owners will be aware, VAT bills are an inevitable consequence of running a business, and it is your legal obligation to pay your VAT bill. However, your business may not be ready in time, or you may not have the available funds which could raise substantial penalties and legal complications with HMRC.

What is VAT?

VAT is a Value-Added Tax, like a sales tax. It is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer. Each stage of that journey will see VAT levied on the product. If the end consumer is a business that collects and pays to the government VAT on its products or services, it can reclaim the tax paid. If the ultimate consumer is not a business or is not registered for VAT, they may not reclaim the tax paid.

VAT registered businesses collect VAT on behalf of HMRC and must pay the collected tax (minus any reclaimed tax), to the government on a regular basis.

You must register for VAT if:

• You expect your VAT taxable turnover to be more than £85,000 in the next 30-day period.
• Your business had a VAT taxable turnover of more than £85,000 over the last 12 months.

Most businesses are required to complete VAT returns quarterly, and they must usually be completed and submitted within one month and 7 days of the end of the relevant period and payment made at the same time. For example, a VAT return for the 3 months to 30 June 2023 must be submitted by 7 August 2023.

If your business finds itself in a position where it would be beneficial to preserve the business’ cash flow and maintain working capital, paying your VAT loan quarterly could be a stumbling block to growth.

This is where a VAT Loan could help your business.

How much can a business borrow?

The amount your business can borrow will depend on the unique circumstances of your business and your eligibility. At Anglo the stating Loan Advance > £25,000 , but our team will be able to discuss your requirements and advise how much you could access.

Which businesses can apply for a VAT loan?

Your business can apply for a VAT loan if;

• the business is VAT registered.

• turnover is more than £85,000 ex-VAT.

• is a UK business.

• a limited company, although partnerships and some sole traders may also qualify.

• trading for more than one year.

VAT loans are available to many different types of businesses from manufacturing firms to professional services, agricultural businesses to IT consultancies.

The benefits of A VAT Loan

• Improves business cashflow.
• Utilise funds to pay for other bills/expenses/debt or investment into the business
• Bring your tax inline with monthly business expenditure.

What other lending products could help your business?

We can help all sorts of business access a number of commercial lending products including:

• Corporation tax
• Self Assessment
• Professional Indemnity funding
• Commercial mortgages

If you’d like to know more about VAT loans and other types of commercial finance, please get in touch.