For brokers

The VAT Funding Timeline, Day by Day

PropertyVAT Team · Updated · 3 min read

Most VAT cases that run late were not slow. They were sequenced badly — the long-lead item started last.

The two clocks

HMRC's clock. VAT registration, and notification of an option to tax. Weeks, and not compressible.

Everyone else's clock. Underwriting, documentation, searches, drawdown. Days.

A case where HMRC's clock started on day one is comfortable. A case where it starts in week three is not, regardless of how fast everything else moves.

The timeline

Week 1 — the week that decides the case

  • Confirm whether VAT may be payable; raise it with the client at first contact
  • Client instructs solicitor; VAT enquiries raised in writing
  • Buying entity incorporated and VAT registration started
  • Option to tax notified, if a TOGC is intended
  • Early conversation with a VAT lender — indicative terms, and a list of what is needed

Nothing here depends on the deal being certain. All of it protects the timeline.

Week 2 — establishing the position

  • Solicitor confirms the VAT position from the contract, in writing
  • Option to tax notification and HMRC acknowledgement obtained where available
  • Senior facility progressing: valuation, credit
  • Confirm the client's VAT quarter end — this sets the facility term
  • Chase the VAT registration

Week 3 — packaging

  • VAT registration number issued, ideally
  • Full pack to the VAT lender: contract, VAT evidence, registration, entity details, completion date, solicitor
  • Terms issued, typically within 24–48 hours
  • If a second charge is needed, senior lender consent requested

Week 4 — to completion

  • Facility documentation and solicitor undertakings
  • Completion statement prepared, with SDLT on the VAT-inclusive figure
  • Confirm net advances from both lenders, after fees deducted at source
  • Cleared funds confirmed

Completion day

  • Both facilities draw
  • Purchase completes
  • Obtain the seller's VAT invoice — same day, without exception

After completion

  • VAT quarter ends
  • Return filed promptly, with the evidence pack ready
  • HMRC verification, if it comes — respond fully and fast
  • Refund received; VAT facility redeemed

What runs in parallel

Almost everything. The senior credit process, searches, VAT facility underwriting and solicitor undertakings can all progress simultaneously.

The exception is registration, which gates the reclaim and therefore the lender's exit. That is why it goes first even though it feels administrative.

Where the time actually goes

Step Typical duration Compressible?
VAT registration Weeks No
Option to tax acknowledgement Weeks No
Confirming the VAT position Days Yes
VAT facility terms 24–48 hours Yes
Facility documentation Days Yes
Senior facility Days to weeks Partly
Drawdown Same day —
HMRC reclaim after filing Around a month, longer if verified No

Two rows are immovable at the top, and one at the bottom. Everything in the middle is within your control.

The auction variant

Compress everything and move the first two steps before the bid:

  • Legal pack reviewed, VAT position confirmed — before bidding
  • Registration under way — before bidding
  • Funding agreed in principle — before bidding
  • Then 28 days of parallel work, with no HMRC dependency left

A client who wins at auction and starts registration afterwards has a problem no lender can solve inside the window.

The one-line version for a client

"We need to start your VAT registration this week, whatever happens with the deal. Everything else can be done quickly; that cannot."

This guide is general information, not financial advice. Timescales vary by case, lender and HMRC processing.

Frequently asked questions

What takes the longest?
VAT registration for the buying entity. It runs on HMRC's timetable, commonly takes weeks, and may involve follow-up questions for a new SPV with no trading history.
Can the lender's part really be done in 48 hours?
Yes, where the pack is complete and the entity is already registered. The 48 hours measures underwriting and documentation, not the client's HMRC paperwork.
What runs in parallel?
Almost everything except registration. Searches, the senior facility, VAT facility terms and solicitor undertakings can all progress at once, which is why sequencing matters more than total effort.
When should the VAT invoice be obtained?
On completion day. It is the primary evidence for the reclaim, and it becomes harder to obtain every week after the seller's solicitor closes the file.

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