You have your Bridging Vat Illustration – so what happens next?

Posted by Bridging Vat Ltd on 12th November 2019 -

Here at Bridging Vat, our expertise means that we have simplified the process of a short term loan to fund 100% of the VAT on your commercial property purchase. At this point our clients are engaged with agents, brokers, solicitors and professional services, so to be able to trust a VAT lender to deliver and take care of the recovery from HMRC can be a vital part of the process.

So what happens once you have an illustration? Here I outline and summarise the process that we go through on every loan;

1.      Formal Offer

The first step is to issue a formal offer to our client. This is issued with approval in principal, subject to contract, and includes all the information we require to process the application.  The Offer Letter clearly identifies the Gross Loan Advance, details of all Interest and Fees that will be deducted in arriving at the Net Loan Advance.

2.      Due Diligence

Once the formal offer is acceptable, and the Loan Processing Fee has been paid, we commence the due diligence process. The aims of which are to be satisfied that VAT is correctly charged on the purchase and there are no reasons why HMRC may disallow the recovery of the VAT. As well as complying with AML regulations, we are able to optimise the borrowers VAT registration to ensure tax is recovered as quickly as possible.

3.      Loan Documentation

Our solicitors will issue standard loan documentation to the borrowers’ solicitor including a facility agreement, a debenture and personal guarantees. We will also issue documentation to any senior lender to organise a second charge and an inter-creditor deed.

4.      Completion

Upon completion our loan is advanced to the client account of the borrowers’ solicitor, and held to order for the purpose of paying the VAT element of the borrower’s commercial property purchase.

5.      Recovery

Following completion, focus switches to the VAT recovery. We work with the borrower to submit the VAT return and co-ordinate responses to any pre-compliance questions HMRC might raise. As the borrowers tax agent, we can talk directly to HMRC on the borrower’s behalf and regularly chase progress on release of the VAT recovery payment.  

If you are in the process of purchasing a commercial property which is opted to tax, and would like a free, no-obligation illustration to fund 100% of the VAT, talk to the experts, talk to Bridging Vat.