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Asset Finance

HP & Leasing Finance from
£10,000 upwards.

Business Loans

For Sole Traders, Partnerships,
LLPs & Ltd Co’s

Finance Partners

We can help you provide
finance to your customers.

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    TVAF 7 West Mills Yard, Newbury, Berkshire, RG14 5LP
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    ASSET FINANCE
    & BUSINESS LOANS
    01635 785 400
    enquiries@tvaf.co.uk
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    ASSET FINANCE
    & BUSINESS LOANS
    01635 785 400
    enquiries@tvaf.co.uk
    Ready to talk? Get a Call Back
    MENU

    Asset Finance

    Asset Finance

    HP & Leasing Finance from £10,000 upwards.

    Business Loans

    Business Loans

    For Sole Traders, Partnerships, LLPs & Ltd Co’s

    How will the VAT Reverse Charge impact my cashflow?

    27/03/2021

    The VAT Reverse Charge for contractors operating within the construction industry was introduced earlier this month, having been delayed twice due to the pandemic and Brexit.

    In essence, the liability for VAT has been pushed up the supply chain in an attempt to combat missing trader fraud in the construction sector, as was previously introduced for the sale of  computer chips and mobile phones. This applies only to small and medium-sized firms who pay standard and reduced-rate VAT services, registered for VAT in the UK and reported within the Construction Industry Scheme. 

    Many sub-contractors in the construction industry purchase supplies and materials and charge the VAT to the main contractor. They would make use of the additional 20% revenue in their business until the end of the VAT quarter, when they would be required to pay the VAT on the materials.

    Here’s how it used to work:

    1. Sub-contractor carries out building work and charges the main contractor £100,000 for materials and supplies
    2. They would invoice the main contractor for £100,000 + VAT = £120,000
    3. The sub-contractor could make use of the additional £20,000 cash in their business for a three month period

    Sub-contractors cannot benefit from the VAT cash in their business

    Since the VAT Reverse Charge came into effect on 1 March 2021, the main contractor is now liable to pay the VAT on the cost of the materials, so the sub-contractor will not have the benefit of this cash in their business.

    If you are a sub-contractor within the construction industry, you might need to make some adjustments to your cashflow to account for the VAT Reverse charge for contractors.

    TVAF has a number of options available to help you to get ‘cash-flow fit’ if the VAT Reverse Charge means you will need some additional working capital in your business:

    • An unsecured Business Loan could give your business a much needed cash injection
    • Invoice Finance could help you to free up some capital that’s tied up in invoices owed to you
    • A VAT loan could help you to spread the cost of your own VAT liability over three, equal monthly installments.

    Please get in touch with our team if the VAT Reverse Charge for building and construction is likely to impact your cashflow – call 01635 785 400 or contact us.

    If you need more detailed information about the VAT Reverse Charge for building and construction services here.

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    Case Studies

    Read how we’ve helped other businesses arrange finance for business growth.

    CBILS provides cost effective capital funding for fast growing printing firm

    Asset Finance | Finance Partners
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    Many TVAF clients are introduced via accountants who understand the benefits of working with a specialist broker and contacts who supply funding for different industry sectors.
    READ MORE

    Legal firm covers work in progress during court delays due to Coronavirus

    Business Loans | Finance Partners
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    A long-standing TVAF client with a busy legal practice in south London found that their cash flow was being adversely affected because court proceedings were delayed due to the pandemic.
    READ MORE

    Sports venue benefits from CBILS, to provide cash injection during lockdown

    Business Loans | Finance Partners
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    A newly established leisure company with an outlet in West Berkshire and another recently opened in central Reading, our existing client has sadly remained closed for much of the last 12 months.
    READ MORE

    Using VAT loans as a long-term cash-flow strategy

    Business Loans
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    Our long-standing TVAF client has used VAT loans as part of their cash-flow strategy for many years. When each quarterly VAT bill is due, our client contacts us to  arrange a VAT loan which allows them to spread the cost of their VAT payments over a three-month term.
    READ MORE

    Loan funding for tech company through a restructure/growth phase

    Business Loans | Finance Partners
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    READ MORE

    SEE ALL CASE STUDIES

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      REGISTERED OFFICE 7 West Mills Yard, Newbury, Berkshire, RG14 5LP TEL: 01635 785 400 FAX: 0333 12 12 140 EMAIL: enquiries@tvaf.co.uk

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      Thames Valley Asset Finance Limited is a credit broker and not a lender. Authorised and regulated by the Financial Conduct Authority.

      Firm Reference Number: 667804

      Company Registration Number: 5880332

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      © 2017 Thames Valley Asset Finance. All rights reserved.
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