What You Need to Know About VAT Loans

When you consider all of the expenses that your business has to pay, it might not be a surprise that many businesses are late paying their taxes.  VAT is one of the taxes that is often left. If you are having problems with paying your taxes on time, you may want to consider a loan to help cover you and get you started on a new path.  

A loan will also be able to help you prepare for upcoming payments and help you save for them.  If you are considering a loan to cover your taxes, you need to look at VAT loans.

Pay Your VAT Bill with A VAT Loan

VAT is the tax charged on services and goods.  When your company sells products or a service, you need to add VAT to them.  This is a best practice and something that you need to do.

It is important to note that this will only be a requirement when you earn over a set amount.  However, it is a good idea to start paying VAT before you reach the threshold. This is particularly important if you have a small business.

You can add 20% tax to your products and save this money.  It will need to be paid to the government each year. If you are having problems making the amount that s due, you could take out a loan to prevent a late payment.

The Reason to Take A Loan

The primary reason for taking out a VAT loan is to ensure that you pay your VAT on time.  However, there are other reasons why you might want to consider this including:

• Covering company loses before the VAT bill is due

• VAT affects limited companies

• If you have an odd payroll period, your business could lose money when paying your employees

• Your business pays less frequently than normal for a leased property

Loans and Paying Your VAT Bill

You need to submit a VAT return every 3 months, but you do have some other options available.  You can either pay your VAT every 3 months when your return is submitted and have it rolled over your loan or you can spread the loan over the full year.  Regardless of the option that you choose, taking a loan will enable you to pay your VAT comfortably and on time.

Late Payments

What happens when you have a loan and are still struggling to make your payments on time?  In these situations, the revenue services can help.

Of course, you will first have to prove that you have problems paying your tax bill.  Revenue services are looking for a poor or lack of cash flow. If you can provide this evidence, an increase in the amount of time that you have to pay may be given to you.  

At this point, you might have to make monthly payments for one year.  If you do not pay each month, your benefits will be cancelled and you will be charged penalties.  It is possible for the revenue services to also take you to court.

Always Prepare For VAT

While it is possible to get a loan to help you pay your VAT bill, it is better to remember to save for this.  You will have to pay your VAT, but you also have to pay a loan off. You need to ensure that you have a regular cash flow and that you always save more than you spend. If in doubt, please take a look at this VATGlobal table

Adam Hansen

Adam is a part time journalist, entrepreneur, investor and father.