Commercial Property VAT Loans

Finance VAT on a commercial property

When you are buying a commercial property, the selling agent’s details will clearly say ‘VAT will not be applicable’ or the asking price +VAT.

If you have found a commercial property for sale and VAT is payable, then one of the first things to think about is how to fund the VAT?

VAT on the purchase and sale of a property is payable upon completion. Even if you set up an SPV, once you have completed the documentation, and HMRC have done their checks, HMRC will send the VAT money back to you. Therefore this process can take from a few weeks to six months.

With most commercial properties being acquired via a mortgage, the first thing to realise is that the mortgage company will not fund the VAT. However what other options are there available to you?

• Pay the VAT yourself and then reclaim it.
• Take out a commercial property VAT loan through us.

So, how does it work?

The process of applying and obtaining a commercial property VAT is loan is very simple.

Initially we will have a quick conversation with you to obtain some more information. For example the VAT Loan amount, completion timescales, type of commercial property (offices, warehouse etc) and details of your plans for this property.

Once we have this information you will then receive indicative terms. If you wish to go ahead, you will be asked for the following info:

• The property and solicitor details
•The amount you are looking to borrow
• Connect government gateway

Allowing access to your government gateway allows the VAT refund to be reallocated. This means you do not have anything to do once the funds have been released to your solicitors.

Usually from start to finish the process will take 2-3 working days.

The funder then sends the VAT loan monies directly to your solicitors. They then in turn transfer this money to the buyers’ solicitors.

Then HMRC will receive this VAT money, complete some checks, and therefore then send the money directly back to our funder acting as agent.

What are the costs?

On average an 8% facility fee is charged however this is on a case by case basis and is subject to the indicative terms. This will be deducted from the borrowing amount and you will need to cover this upfront.

So for example, 92% of the VAT will be sent to your solicitor and you will need to cover the remaining 8%.

Property VAT loans – The Benefits

  • No monthly interest, no hidden fees – our fees are fixed regardless of how long HMRC takes to repay the refund. This is so you know exactly how much our service will cost
  • As the market leader in VAT financing, if you receive a better offer for this facility please send it over and we will beat it as part of our price guarantee
  • We are a third-party funder, this has no impact on your mortgage
  • You do not have to use existing cash flow to fund a one off investment

The Property VAT Loan Process

We are buying the property via our company, not a SPV. How does the VAT work?

We’re often asked if the property can be purchased in the name of a trading company, and the answer is yes! The process is the same as above, however we’ll also look at PAYE liabilities through the government gateway connection to make sure this is up to date.

Funders and finance companies who fund VAT on the purchase of an office, shop, or warehouse

In the UK, there are a small number of funders and finance companies that will fund VAT on the purchase of a business building such as an office, shop, or warehouse.

At VAT Loans, we work with a small panel of funders to get the best possible rates for you. However, it may be that one funder has turned you down for credit. We have seen this many times, often not for reasons associated with a customer’s credit profile. However, it may be they do not like the building or purpose the building will be used for.

Contact us today to get your commercial property VAT funded

Please call a member of our team on 01494 956 871, or email us at [email protected].

It’s roughly a 50%/50% between commercial property that attracts VAT and those that don’t. It’s mostly the newer properties where you have to pay VAT.

Property VAT Loans- The Benefits

Cash Flow

Opting for a VAT loan amongst our other finance options will allow you to keep funds in your business to be used elsewhere. Take control of your finances and free up your cash for you to use in other important areas of your business.

Alternative Funding Lines

No need to use up an existing bank facility. A VAT Loan gives you alternate options to use in order to finance your loans.

Fast Payment

Payment can be made directly to HMRC to ensure your bill is paid on time. This will save you worrying about your finances when it comes to financial deadlines.

Quick and Simple to Arrange

Simple use of our free to use calculator can give you a quote in a matter of seconds. Alternatively, you can give us a call on 01494 956 871.

Fixed Monthly Payments

Easy fixed repayment schedule with industry leading rates.

Approval Within 24 Hours

We pride ourselves on fast and quality customer service, which is why we aim to have a decision to you in the first 24 hours of enquiry.