UK Companies have seen a reduced need for VAT funding in Q3 2020.
Over 64% of companies in the UK have a yearend in March, June, September and December. Nearly all these business’s will match their quarterly VAT return dates to their yearend.
For our VAT funding division, the last two weeks of October and the first few days of November are the busiest of the quarter. This year that has not been the case.
Funding VAT debt is a big business in the UK. The amount lent has been gradually growing over the years as client look to spread their VAT bill over three months.
Q3 2020 has seen a sharp decline in business. Jeremy Hall, CEO of WestWon explains why. “We talk about a slow down in VAT funding in Q3. The truth is VAT funding has nearly dried up completely this quarter. There are three key reasons:
- Many companies are reporting significantly lower sales which does result in a much smaller VAT bill.
- There has been a propping up of SME companies with Bounce Back Loans. Hence, UK companies have been using other forms of Government support to pay their VAT bills.
- HMRC are being more relaxed about companies not paying their taxes on time. They have been more generous on offering “time to pay arrangements” which companies will have taken advantage of.
Jeremy further noted. “It was not just us reporting a slow down in Q3 VAT loans, we have spoken to the funders that sit behind us who have said their situation is the same. This is just a blip. We already know that Q4 will be a challenging time for business in the UK. However, in 2021, even though the average amount of a UK VAT loan might be smaller than 2019, many more companies will use VAT finance for the first time. We are expecting to see a big increase overall in our VAT loan business.”
VAT loans for business
Please call WestWon should you require a VAT loan for your business, we would be more than happy to assist. Rates are competitive, the process is very quick and simple, with repayments being made over three months. The apply now, please call WestWon on 01494 611 456.