Auction purchases

Funding VAT Inside a 28-Day Completion

PropertyVAT Team · Updated 21 October 2026 · 3 min read

Twenty-eight days sounds like plenty until you count what has to fit inside it. Where VAT applies, you are arranging two funding lines rather than one, and the deposit is at risk throughout.

What has to happen

Two rows are in bold because they are the two that will not compress. Everything else can be accelerated with money and attention. HMRC cannot.

The two steps that must precede the auction

VAT registration for the buying entity. You cannot normally reclaim VAT if the buyer was not registered at the point of purchase. Registration takes weeks and may involve follow-up questions, particularly for a new SPV.

Confirmation of the VAT position. From the legal pack's special conditions, reviewed by your solicitor. Not the catalogue, not the auctioneer's commentary.

If both are done before you raise your hand, 28 days is comfortable. If either is outstanding, you are relying on luck.

A workable timeline

Before the auction

• Legal pack reviewed; VAT position confirmed in writing
• SPV incorporated and VAT registration applied for
• Option to tax notified, if a TOGC is intended
• Senior funding and VAT funding agreed in principle
• True maximum bid calculated on the VAT-inclusive basis, including SDLT on the VAT

Days 1–3 after the hammer

• Solicitor instructed; deposit paid
• Both lenders formally instructed; completion date confirmed
• VAT facility documentation started

Days 4–20

• Senior lender's valuation and credit process
• Searches and enquiries
• VAT facility terms issued and accepted
• Chase the VAT registration number if still outstanding

Days 21–27

• Completion statement prepared, with VAT and SDLT on the VAT-inclusive figure
• Both facilities ready to draw
• Funds confirmed with your solicitor

Day 28

• Complete, drawing both facilities
• Obtain the seller's VAT invoice on the day — this gets harder every week afterwards

Where it goes wrong

• Registration started after the auction. The most common failure, and the least fixable.
• A TOGC assumed, then failing. Twenty percent appears with days to go.
• Budgeting the hammer price only. VAT plus SDLT on the VAT is a substantial addition.
• Lenders unaware of each other. If the VAT lender needs a second charge, the senior lender's consent takes time.
• The VAT invoice never obtained. Without it, the reclaim stalls and the bridge runs longer than planned.

Sizing the facility honestly

Work out when your VAT quarter ends before you agree the term. A purchase completing just after a quarter end can wait close to three months before the refund arrives — and the facility runs for all of it.

It is far cheaper to agree a longer term at the outset than to extend a facility that was sized optimistically.

This guide is general information, not legal or financial advice. Auction conditions and completion windows vary by lot — take advice on the specific contract.