Farm Asset Finance VAT Loans

When buying farm machinery and equipment, VAT is often included in the sale price, particularly when buying from dealers and the trade. If you are VAT registered you will be able to reclaim this input tax after it has been paid.

This can mean that large amounts of working capital is tied up with HMRC whilst a reclaim is being processed which can take between 45 to 120 days from the date of purchasing the asset. An alternative is an asset finance VAT loan which will keep cash in your business.

How do asset finance VAT loans work?

Asset finance VAT loans bridge the gap between the purchase and the VAT being recovered by the business. There are many advantages to being able to finance the VAT including being able to make higher-value purchases without tying up your capital, retaining liquidity and enabling your business to grow.

An asset finance VAT loan apart from improving cash flow when buying machinery and equipment where VAT is included in the sales price. A VAT loan can be used for many different things including purchasing commercial property and land.