Vat Bridging loan

[somaya]

Hi


I am trying to find if there is such a thing as getting bridging loan from HMRC for VAT payable on a commercial property. I have been led to believe you can came to some arrangement with HMRC if you are able recaliam the vat, where as you don't pay ity initially only interest incurred!

[pawncob]

I'm not aware of any such arrangement.

[section 44]

This appears to be in the wrong forum.

I am not aware of (and am confident that there isn't such a thing as) a bridging loan from HMRC.

Depending on the VAT quarter staggers of the seller and buyer, it may be that the seller does not have to account for the VAT to HMRC until after the buyer has recovered the VAT. In such situations the buyer and seller may then agree (this is a commercial point and does not concern HMRC) that the VAT element of the price need only be paid once the buyer has recovered it from HMRC. Clearly a seller would need to be satisfied with the covenant strength of the buyer given that it would have completed a sale of the property with only part of the price being paid at completion.

[Generix]

This appears to be in the wrong forum.

I am not aware of (and am confident that there isn't such a thing as) a bridging loan from HMRC.

Depending on the VAT quarter staggers of the seller and buyer, it may be that the seller does not have to account for the VAT to HMRC until after the buyer has recovered the VAT. In such situations the buyer and seller may then agree (this is a commercial point and does not concern HMRC) that the VAT element of the price need only be paid once the buyer has recovered it from HMRC. Clearly a seller would need to be satisfied with the covenant strength of the buyer given that it would have completed a sale of the property with only part of the price being paid at completion.

In exceptional circumstances HMRC may allow a set off (between purchaser and seller) providing all VAT is recoverable;

I've seen this done with sales of several large hotels where we are talking about serious VAT cash.

Best bet is to disalign the staggers in advance and have a positive cashflow position if possible.