Google’s most asked questions about VAT bridging loans

Bringing clarity to commercial property VAT payments

BloomSmith is the leading provider of commercial VAT bridging loans on commercial property purchases, we’re here to bring clarity to the most Googled questions when it comes to VAT funding.

The world of VAT payments on commercial properties can often be complicated to navigate. Having to find the answers to a lot of questions, on a subject you hadn’t even considered previously, can be a stressful position to find yourself in – especially if you’re facing an immediate and unexpected VAT charge.

To try and alleviate some of your stress, and to bring clarity to your situation, we have created answers to several of the most asked questions on Google; check them out below.

We also have a guide to VAT funding called ‘VAT bridging explained’, an FAQ and a guide to a very commonly asked question ‘can I avoid paying VAT on a commercial property?’ if you require further guidance.

What is a VAT bridging loan?

A VAT bridging loan enables you to secure temporary funding to address the VAT portion that might become payable when acquiring a commercial property.

Unfortunately, the nature of VAT regulations often means that the VAT liability may only become apparent at a later stage in the transaction, causing a nasty surprise for investors. This is especially prominent given the sums usually involved with a property purchase.

How does VAT funding work?

VAT funding gives you the 20% of your purchase price needed to cover the VAT obligation payable at the completion of a transaction.

Our VAT loans apply to the purchase of commercial property and land and can be delivered in as little as 48 hours due to our streamlined processes.

Simply apply for a loan using our eligibility checker, or speak to us directly, and we can tell you within minutes if you qualify and confirm terms within two hours.

Once your eligibility has been confirmed, we will provide you with a loan to cover your VAT obligations and you will then send this onto HMRC. Once the money is sent, we will deal with HMRC directly to facilitate your VAT reclaim and they will send the money directly to us once it has been processed – minimising your administrative load.

What are the criteria to get a VAT bridging loan?

The criteria for a VAT bridging loan will vary from provider to provider. Our VAT bridging loans have very clearly defined parameters. You will qualify for a loan if you are purchasing a commercial property or piece of land in the UK with a VAT obligation of £150,000 and are willing to set up an SPV through which to conduct the transaction. Meeting these simple requirements means that we are likely to be able to provide you with funding to cover your VAT.

Do I need to submit a VAT return?

In general terms you must submit a VAT return if your VAT taxable turnover is greater than the VAT registration threshold. A return is usually submitted every quarter. HMRC can charge you a penalty of up to 100% of any under-stated or over-claimed tax if you send an inaccurate return, so it’s important you get it right.

In the context of a VAT bridging loan we will assist you in this process.

What is the VAT threshold 2024?

The VAT threshold currently stands at £85,000. HMRC determines the VAT registration threshold on an annual basis. However, it has remained at the £85,000 mark since 2017, and the government has stated that this threshold will remain unaltered until at least 31st March 2024.

Is a bridging loan tax deductible?

Interest on financial expenses is typically considered an eligible deduction, therefore interest on bridging finance is generally eligible.

Our team understands that unexpected, large VAT payments can be overwhelming if you are unfamiliar with meeting VAT obligations or suddenly find yourself looking at a big tax bill that you weren’t prepared for.

If you need help meeting this obligation on a commercial property, or simply want to protect your cash flow, then we are here to help guide you through the process.

Contact us, request a callback, or check your eligibility on the buttons below.

Check eligibility

See if you qualify for funding in less than five minutes.

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We’ll call you back to discuss your VAT funding needs.

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