At the beginning of lockdown, the Government helpfully allowed businesses to defer their Q2 VAT liability, providing several thousands of pounds of additional liquidity for very many businesses.
Despite the pandemic taking hold again, there has been little sign of the Government repeating this initiative. VAT now remains payable when it falls due each quarter, notwithstanding the challenges COVID continues to present to businesses and their recovery plans.
If this is affecting your business, VAT loans are one way of spreading the cost of VAT over three months and are available to sole traders, partnerships and limited companies alike.
Repayments are made by a monthly or weekly direct debit.
Interest is typically in the region of 1.5% per month and there is often an arrangement fee too. Loans can usually be repaid without penalty at anytime before the end of the term should cash flow improve.
When applying, you can expect to be asked for filed accounts, bank statements, and management accounts if you have them. If everything is to hand and in order, a decision can normally be forthcoming within about three days.
We have access to lenders offering VAT loan facilities and encourage you to get in touch if working capital support of this nature will help.
By: Neil Edwards<< Back to latest blogs