When buying machinery and equipment, VAT may be included. If you’re registered for VAT, an asset finance VAT loan may improve cash flow whilst you’re waiting to reclaim
When buying machinery and equipment, VAT is often included in the sale price, particularly when buying from dealers and the trade. If the buyer is VAT registered they will be able to reclaim this input tax after it has been paid.
This can mean that large amounts of working capital is tied up with HMRC whilst a reclaim is being processed which can take between 45 to 120 days from the date of purchasing the asset. An alternative is an asset finance VAT loan which will keep cash in your business.
What is an asset finance VAT loan
Asset finance VAT loans bridge the gap between the purchase and the VAT being recovered by the business. There are many advantages to being able to finance the VAT including being able to make higher-value purchases without tying up your capital, retaining liquidity and enabling your business to grow.
Business Support – Leasing & HP
A government-backed Start Up Loan through the British Business Bank may be available provided that you’re either a start up or have been trading for less than 3 years.
Start up loans are available for eligible applicants who are over the age of 18, live in the UK and have a business that either hasn’t started trading yet or has been trading for less than 3 years. With a start up loan you can borrow between £500 and £25,000 per applicant (maximum £100,000 per business).
Unlock the hidden assets within your business with Research & Development (R&D) Tax Relief, Remediation of Contaminated Land (RoCL) Tax Relief and Capital Allowances Tax Relief. With the average claim being in excess of £50,000, it’s well worth investigating.