VFVAT Finance

VAT finance for UK businesses

Your VAT bill.
Spread the cost, not your cash flow.

A large VAT payment can put unnecessary pressure on working capital.

VAT finance allows an eligible business to fund an upcoming VAT liability and repay it over an agreed period, rather than taking the full amount from cash reserves at once.

How VAT finance works

Business finance only. Subject to status and lender approval.

See what your VAT finance could look like

Enter your VAT payment below to receive an indicative repayment illustration.

£
£1,000£500,000

How much would you like to finance?

Term

Estimated monthly repayment

£8,708.33

Amount financed
£25,000.00
Finance cost
£1,125.00
Total repayable
£26,125.00
Term
3 months

This calculation is for illustration only and is not an offer of finance. Pricing, availability and repayment terms are subject to status, lender assessment and final approval.

Keep more cash available for your business

VAT payments often fall at inconvenient points in a company's cash-flow cycle.

Customer invoices may still be outstanding, payroll is due, stock needs to be bought or the business is investing in growth.

Funding a VAT liability can reduce the immediate impact of the payment and leave more cash available elsewhere in the business.

Your VAT bill

£30,000

Pay from cash

£30,000 leaves the business on the payment date.

VAT finance

The VAT liability is funded. The business repays the finance, plus its cost, over the agreed term.

Finance has a cost and does not reduce the VAT payable. Figures are illustrative.

1

Protect working capital

Rather than paying the entire VAT liability from cash reserves, eligible businesses can spread the cost over an agreed repayment period.

2

Preserve existing facilities

Using dedicated VAT finance can allow an overdraft or other working-capital facility to remain available for other business requirements.

3

Improve cash-flow planning

Turning a substantial one-off liability into scheduled repayments can make short-term cash requirements easier to manage.

How VAT finance works

The process is straightforward.

  1. 01

    Tell us what you need to pay

    Enter your VAT liability into the calculator and choose the available repayment option that suits your requirement.

  2. 02

    Send us your details

    Provide some basic information about your company and the VAT payment you want to finance.

  3. 03

    Your application is assessed

    The application will be reviewed and, where appropriate, introduced to a suitable finance provider.

  4. 04

    The VAT liability is funded

    Following approval and completion of the finance agreement, funds can be used towards settling the VAT liability.

  5. 05

    Make the agreed repayments

    Your business then repays the finance according to the agreed schedule.

Finance what you need

You may not need to finance the whole VAT bill.

A company may have enough cash to meet part of its VAT liability but prefer not to use all of its available working capital.

In that situation, it may be possible to fund only the shortfall. Use the funding gap calculator to estimate the amount of finance you may need.

Paid from cashFunding required

Funding required

£20,000

Who uses VAT finance?

VAT finance can be relevant to businesses across a wide range of sectors where the timing of VAT payments creates pressure on cash flow.

Eligibility varies by business and finance provider. The type of business you operate does not by itself determine whether finance will be available.

Comparison

VAT finance or HMRC Time to Pay?

If a business cannot pay its VAT liability when it falls due, external finance is not the only option. HMRC may agree a Time to Pay arrangement in appropriate circumstances.

The two approaches work differently.

VAT finance

  • Finance provided by an external lender
  • Funds can be used to settle the VAT liability
  • The business repays the finance provider
  • Finance costs apply
  • Subject to lender approval

HMRC Time to Pay

  • An arrangement made directly with HMRC
  • Availability is decided by HMRC
  • The repayment plan is agreed with HMRC
  • Interest may apply
  • Businesses should contact HMRC as early as possible if they are unable to pay on time

Businesses facing difficulty paying tax should consider their circumstances carefully and review all available options.

Compare VAT finance and Time to Pay →

When is your VAT payment due?

For businesses using the standard VAT accounting timetable, payment is normally due one calendar month and seven days after the end of the accounting period.

Your standard VAT payment deadline

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Questions

What is VAT finance?+
VAT finance is business funding used towards an upcoming VAT liability. The business borrows the amount required and repays the finance provider according to the agreed repayment schedule.
Is VAT finance the same as a VAT loan?+
The terms are commonly used interchangeably. We generally use VAT finance because the structure of facilities can vary between finance providers.
Who can apply?+
VAT finance is generally aimed at businesses with a genuine VAT liability. Eligibility depends on the applicant, the finance provider and the circumstances of the application.
What is the minimum amount?+
The calculator currently starts at £1,000. Minimum requirements can vary between finance providers.
How much does VAT finance cost?+
The cost depends on the finance product, amount borrowed, repayment period and the applicant's circumstances. The calculator currently uses an indicative transaction fee of 4.5% for 3 months. The final cost is confirmed as part of the formal quotation.
Can I finance only part of my VAT bill?+
Depending on the finance facility, potentially yes. A business may choose to contribute part of the VAT payment itself and seek finance for the remaining balance.
Can the payment go directly to HMRC?+
Depending on the finance arrangement, funds may be used to settle the VAT liability directly. The payment process will be confirmed as part of the finance agreement.
How quickly can VAT finance be arranged?+
Timescales depend on the application, the information provided and the lender. Making an enquiry well ahead of your VAT deadline gives more time for the application to be assessed.
Will using the calculator affect my credit score?+
No credit search is carried out simply by using the online calculator. A lender may carry out credit checks if the business proceeds with an application.
What happens if my VAT payment is already overdue?+
Businesses with an overdue VAT liability should consider contacting HMRC as soon as possible. External finance may still be worth exploring, but availability will depend on the circumstances and lender assessment.
What is HMRC Time to Pay?+
Time to Pay is an arrangement agreed directly with HMRC that allows an eligible taxpayer to repay a tax liability over an agreed period.
Is VAT finance regulated?+
[APPROVED REGULATORY WORDING TO BE ADDED]

Know what your next VAT bill will be?

See what spreading the cost could look like.

Business finance only. Subject to status and lender approval.