Following advance of the Bridging Vat bridging loan and completion of the purchase of the property, the focus switches to the VAT recovery.
Bridging Vat works with the borrower to complete the VAT return. For the first 21 days following submission of the VAT return, HMRC will not answer questions relating to the recovery. Bridging Vat will co-ordinate responses to any pre-compliance questions HMRC may raise during this period. After 21 days, as a tax agent, we can talk directly to HMRC on the borrower's behalf and regularly chase progress on release of the VAT recovery payment.
After the HMRC have transferred the recovery to the designated account we send the borrower a redemption statement showing the total balance to be settled. This includes an interest rebate to the borrower for the number of days less that the 90 day term that the loan was outstanding.
To meet the balance is due from the borrower, the fees and interest cheque provided at completion can either be presented and a rebate paid to the borrower, or the cheque returned after the net balance to settle the loan has been transferred to our Bridging Vat.
When the account has been settled, our solicitors will notify the Land Registry that our charge has been satisified and remove our Debenture from the charges register at Companies House.
Finally, Bridging Vat notify HMRC of the termination of our agent appointment and provide the borrower with the HMRC form to change the details of the VAT recovery bank account.
In the event that full recovery of the VAT, or Fees and Interest, is not received within the 90 day term, Bridging Vat reserve the right to take action against the Borrower or the individual Guarantors to recover the outstanding debt. At the end of the 90 day term penalty interest, based on 2.5% of the Gross Loan Advance, will be applied to the Borrower's loan account for each additional 30 days or part thereof.