Cashflow can sometimes make paying your tax on time a struggle. Did you know that there could be a solution to help?
You can obtain finance to help you spread the cost of your bills such as corporation tax, professional indemnity insurance, and VAT.
Key advantages
Value Added Tax (VAT) loans give you the possibility to spread the cost of your VAT bills over 3 months. Simply put, they are short-term business loans that give you the flexibility you may temporarily need.
There are also alternative funding options on the market such as business loans, invoice financing or merchant cash advances, that may have more flexible repayment terms and lower interest rates.
What are the charges if my VAT return is submitted late?
The fee will be a percentage charge of the outstanding amount you owe to the HMRC, and will increase depending on how late you are to submit
What are the charges if my VAT is paid late?
From 1 January 2023, HMRC will charge VAT-registered businesses late payment interest from the first day their payment is overdue until it is paid in full. For VAT accounting periods starting on or after 1 January 2023, you’ll be charged late payment interest on overdue payments. This is one of several penalty and interest changes that replace the existing VAT default surcharge.
The changes mean that if you pay VAT-related amounts late, you’ll be asked to pay late payment interest on the amount outstanding, from the first day your payment is overdue to the day you pay it in full. If the payment is more than 15 days late, you will also be asked to pay a late payment penalty— the sooner you pay, the smaller the penalty will be. Interest will be charged on all late payments where VAT is due. This includes amounts overdue following:
>VAT Return
>Amendment or correction of a return
>VAT assessment made by HMRC
>Missed VAT payment on an account
You can find further information on HMRC website link below; alternatively speak with your tax adviser
https://www.gov.uk/government/collections/vat-penalties-and-interest
How does finance for VAT work?
Our chosen funder will often pay HMRC directly allowing you to pay the loan, plus fees, over three equal monthly instalments. This supports cashflow rather than having to settle the bill in one lump sum payment.
To discuss the finance options available to you, get in contact with one of our specialist brokers today for a free consultation
