VAT Funding & VAT Loans for Professional Practices
VAT on fees invoiced.
Cash still to come.
VAT is usually due on fees when they are invoiced, whether or not the client has paid. For firms with long lock-up, every VAT quarter can mean paying HMRC before the money arrives.
Who this is for
VAT-registered practices of every kind. Especially relevant to law firms, barristers and chambers, architects and consultancies with long lock-up.
The pressure
VAT on fees invoiced.
Unless a practice uses cash accounting, VAT is accounted for on the invoices it issues, so the VAT on a bill falls due with that quarter’s return even if the client pays months later. For law firms, barristers, architects and consultancies with long payment cycles, that gap comes round every quarter.
The VAT bill has a fixed deadline, and paying it from the office account competes with salaries, the PII premium and partners’ drawings.
What can be funded
What it can cover.
- 01 Quarterly VAT returns
- 02 A VAT bill after an unusually large billing quarter
- 03 VAT falling alongside corporation tax or a PAYE peak
How it’s often structured
Structured around the practice.
VAT funding usually pays HMRC directly and is repaid in monthly instalments, ideally before the next quarter comes round. Some firms arrange it for a single quarter; others return to it each quarter as lock-up dictates.
How we help
Not one lender. The right one.
VAT funding is offered by specialist tax lenders, premium funders and general business lenders, with very different costs and terms. We look at your VAT cycle and how quickly clients pay, then search the market for the option that fits.
Who this is for
VAT-registered practices of every kind. Especially relevant to law firms, barristers and chambers, architects and consultancies with long lock-up.
Questions
What firms usually ask.
Can I get a loan to pay my VAT bill?
Often, yes. VAT funding pays HMRC by the return deadline and is repaid in monthly instalments, so the practice isn’t paying the whole quarter from the office account at once. We search the market for funders suited to the size of the bill and how regularly you need it.
Can VAT on unpaid invoices be funded?
Yes. VAT is usually due on fees when they are invoiced, even if the client has not paid, and the VAT bill has a fixed deadline. Quarterly VAT funding can spread that payment while collections catch up. Firms with long lock-up often use it every quarter.
Would cash accounting remove the need for VAT funding?
Under the VAT Cash Accounting Scheme, eligible businesses pay VAT on sales when customers pay them rather than when they invoice. Your accountant can confirm whether your practice qualifies and whether it suits you. If it doesn’t, VAT funding can bridge the gap instead.
Can barristers fund VAT on fees they haven’t been paid?
Yes. Barristers registered for VAT can face a quarterly bill on fees billed but still outstanding, particularly on publicly funded work. Most barristers practise as sole traders, and borrowing of £25,000 or less by sole traders can be regulated consumer credit; we’ll tell you at the outset if that applies.
What if we’re already behind with VAT?
VAT funding is designed for returns that are current or coming up. If a payment is already overdue, speak to HMRC about a Time to Pay arrangement and to your accountant, and tell us at the outset so we can explain the options.
Success stories
VAT Funding in practice.
£407,862 VAT liability funded.
Read the story → £34k Completed transactionVAT funding Professional Services£34,201 VAT funded directly to HMRC.
Read the story → £12.7k Completed transactionVAT funding SolicitorsRepeat VAT support for an established solicitors’ practice.
Read the story →Let's talk
VAT quarter coming up?
Talk to us before the return is due.
Before you approach a lender, speak to someone who understands the transaction. Confidential, no-obligation initial discussion.
Finance of £25,000 or less for sole traders and small partnerships can be regulated consumer credit. We'll tell you at the outset if that applies to your firm.