Fund VAT Bills ahead of the 2023 deadline
As we head towards the end of another tax year, you may find that you have another VAT bill that needs paying. A VAT bill can put delays in your business plans or you may not have any working capital at the moment to pay for the unexpected bill.
However, your business could use a finance facility such as a business loan to pay for your VAT bill – reducing the impact of costly late payment fines.
What happens if you pay your VAT bill late?
If you fail to pay your VAT by the deadline, your business will be faced with penalties for late payments. Consequently, your business will be faced with an additional bill on top of your VAT bill.
Does my business need to pay VAT?
Businesses have to register for VAT if their VAT-taxable turnover is more than £85,000. A business can choose to register if its turnover is less than £85,000.
Why use a VAT Bill Business Loan?
One of the main reasons to use a finance facility to pay your VAT bill is to avoid missing the deadline, consequently avoiding any late penalties and fees.
If your payment is 16 – 30 days overdue, your late fine will be calculated at 2% on the VAT you owe at day 15.
Payment is 31 days or more overdue, your first late payment penalty will be calculated at 2% of what was outstanding at day 15 plus 2% of what is still outstanding on day 30. Your second late payment penalty is calculated at a daily rate of 4% per year on the outstanding balance and charged every day from day 31 until the outstanding balance is paid.
To find out more about the late payment penalties, GOV.UK has a full breakdown.
Another reason is to avoid any cashflow pressures as a large lump sum payment can delay any investment plans that you may have or put strain on the business to pay other bills that you may have.
A VAT finance facility will provide you with the funding that you need to pay your VAT bill and in return, you will make affordable monthly repayments.
Looking for finance for other unexpected bills?
If you have received any other unexpected bills such as a raise in your energy bills during the winter period, an unexpected supplier bill or finding yourself waiting on invoices to be paid – a finance facility could be a solution for your business.
An unexpected bill or a gap in your cash flow can be resolved with a business loan or an invoice finance facility. To find out more about the finance solutions available for your business, speak with our team for a no-obligation discussion.