How is VAT underwriting different from standard bridging?

The exit is an HMRC refund rather than a sale or refinance. That makes the reclaim's certainty and timing the central question, and pushes valuation and borrower credit down the list.

Does a weak borrower profile kill a VAT case?

Less often than on standard bridging. A new SPV with no accounts is normal here. Serious adverse history affecting the entity or its directors is still assessed, but the reclaim does most of the work.

What single piece of evidence carries the most weight?

The VAT registration certificate for the buying entity, paired with the contract showing VAT is payable. Together they establish that a reclaim will exist and that it is quantified.

How should I handle an intended TOGC that might fail?

Disclose it immediately. Underwriters are comfortable with contingency facilities, but they are not comfortable discovering late that the VAT may not arise at all, or may arise suddenly.

For brokers

What Underwriters Need on a VAT Case

PropertyVAT Team · Updated 21 October 2026 · 3 min read

Placing a VAT case is a different exercise from placing a bridge, and brokers who present it as a bridge tend to get slower answers.

What the underwriter is actually asking

One question, in three parts: will HMRC repay, how much, and when?

Everything in the pack either answers that or is secondary.

Standard bridging asks	VAT bridging asks
What is the asset worth?	Is the VAT recoverable?
What is the LTV?	Is the entity VAT registered?
What is the exit — sale or refinance?	When does the VAT quarter end?
What is the borrower's credit profile?	Is there a filing history?
Is there a valuation?	Is the VAT position evidenced in the contract?

This is why a newly formed SPV with no accounts, no trading history and no assets is a perfectly ordinary VAT case and a difficult standard bridging case.

The evidence hierarchy

Tier one — without these, there is no case

VAT registration certificate for the buying entity
Contract or legal pack showing VAT is payable, and the amount
Confirmed completion date

Tier two — these set the terms

Option to tax notification and HMRC acknowledgement
Confirmation of intended use, establishing recoverability
VAT return history, where it exists
When the VAT quarter ends

Tier three — these smooth the process

Solicitor details, both sides
Senior facility terms and consent position for any second charge
Director and ownership information
Source of the balance of completion funds

How to present it

Lead with the answer, not the story. An underwriter reading a VAT case wants the following in the first paragraph:

Purchase price and VAT amount
Buying entity and its VAT number
Why VAT is payable — opted, or new building
Completion date
When the VAT quarter ends, and therefore expected reclaim timing
Whether a second charge is needed

A case that opens with "£1.5m industrial unit, seller opted, £300k VAT, SPV registered under VAT number X, completing 14 November, quarter ends 31 December, senior lender consents to second charge" will get terms faster than three paragraphs of background.

What slows a case down

Registration "in progress". This is the one that stops underwriting rather than delaying it.
An asserted VAT position. "The agent says it's opted" is not evidence. The contract is.
Silence on intended use. If the property will be used for exempt purposes, recovery may be restricted and the exit weakens.
An undisclosed TOGC question. Discovering at the eleventh hour that the VAT might not arise — or might arise suddenly — undermines the whole structure.
A senior lender who has not been told. Second charge consent takes time nobody has budgeted.

Setting the term honestly

The commonest avoidable cost on a VAT case is a facility sized against an optimistic reclaim.

Two things lengthen it predictably: completing just after a VAT quarter end, and a first-time SPV making a large claim that invites HMRC verification. Where either applies, agree a longer term at the outset. Extending later is more expensive and makes the next case harder to place.

The broker's edge

Underwriters see a lot of VAT cases arrive incomplete. A broker who sends the tier-one evidence unprompted, states the quarter end without being asked, and flags the TOGC position up front is giving the underwriter their own checklist back, already answered.

That is usually the difference between terms in 48 hours and a week of emails.

This guide is general information, not financial advice. Lender requirements vary — confirm what is needed for the specific case.

Frequently asked questions

How is VAT underwriting different from standard bridging?: The exit is an HMRC refund rather than a sale or refinance. That makes the reclaim's certainty and timing the central question, and pushes valuation and borrower credit down the list.
Does a weak borrower profile kill a VAT case?: Less often than on standard bridging. A new SPV with no accounts is normal here. Serious adverse history affecting the entity or its directors is still assessed, but the reclaim does most of the work.
What single piece of evidence carries the most weight?: The VAT registration certificate for the buying entity, paired with the contract showing VAT is payable. Together they establish that a reclaim will exist and that it is quantified.
How should I handle an intended TOGC that might fail?: Disclose it immediately. Underwriters are comfortable with contingency facilities, but they are not comfortable discovering late that the VAT may not arise at all, or may arise suddenly.

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