Using VAT Loans to Pay Your VAT Bill
You can apply for [VAT Finance] if you can’t pay your VAT on time, so you don’t incur late payments penalties.
The HMRC, which is responsible for collecting taxes, charges businesses up to 15% of the total value of the VAT bill for any late or non-payment instances.
This cost alone can increase your accounts payable, in addition to any current expenses your company is already liable for.
It is common for companies to fall behind with VAT payments for a range of reasons
- When your business is experiencing a shortfall in cash flow due to seasonal trading.
- When odd payroll periods cause your company to lose money. This typically happens during holidays such as Christmas, and employers need to pay their employees earlier than the regular pay date.
- When you are waiting on unpaid invoices. This situation can negatively affect your business’ financial stability.
With VAT Finance, you can avoid these potential challenges. VAT Finance can serve as a solution to pay your VAT bills on time while you’re still managing your expenditure.
Benefits of VAT Finance
- VAT loans help in spreading the cost of your VAT bill while regulating your cash flow. In return, your company can get back on track and focus on its growth.
- VAT loans assist borrowers by providing a cash flow injection, which will help increase their spending ability.
- Paying your bill on time stops you incurring late payment penalties of up to 15% of your VAT bill.
Loans allow you manage your cash flow more effectively and use existing funds in other areas of your organisation instead of using it to pay for hefty late payment penalties.
There are VAT lenders that can approve your loan application in as little as 24 hours, which is perfect for a time-sensitive matter.
If you are already past your due date, you can still find facilities that can finance your VAT bill up to 14 days after the payment due date.
Managing VAT payments
Although taking up a VAT loan is an enormous help in paying off your bill, it’s still important to save up and include VAT payments in your company budget. A VAT loan may enable you to pay your VAT bill, but keep in mind that you are still obliged to pay off the loan. It can be challenging to regulate your cash flow when you have many bills to pay.