When is the VAT actually payable?

At completion, alongside the purchase price. It is not deferred pending your reclaim, and it cannot be withheld — the seller is accounting for it to HMRC.

Is SDLT payable on completion day?

The return and payment are due shortly after the effective date of the transaction rather than on the day itself, but the funds need to be available. Your solicitor will usually hold them.

What is the most commonly underestimated line?

Stamp duty, because people calculate it on the VAT-exclusive price. On a VAT-affected purchase that understates the bill, and the shortfall is not recoverable.

Should I budget for the reclaim arriving by a certain date?

Only cautiously. The timing depends on your VAT quarter and whether HMRC verifies the claim. Treat the refund as money that arrives in one to three months, not as part of your completion funding.

Costs, SDLT and tax

Calculating Your Total Completion Funds

PropertyVAT Team · Updated 21 October 2026 · 3 min read

Most completion shortfalls are not caused by a deal changing. They are caused by a budget that was built on the purchase price and then met reality.

The full build

Work through every line, in this order:

Line	Notes
Purchase price	The hammer price or agreed price
VAT at 20%	Where the seller has opted to tax, or the building is new
SDLT	Calculated on the VAT-inclusive consideration
Deposit already paid	Deduct — usually 10% at exchange or auction
Senior debt advance	Deduct — what your lender is actually releasing, net of fees
Legal fees and disbursements	Yours, plus any contribution to the seller's
Searches	Local, drainage, environmental
Buyer's premium	Auction purchases
Lender arrangement fees	Often deducted from the advance, which reduces your net funds
Valuation fees	Where required
Agent or broker fees	Where payable by you

The two bold lines are where budgets break.

A worked example

A £1,000,000 commercial purchase, seller has opted to tax, 65% senior debt.


Purchase price	£1,000,000
VAT at 20%	£200,000
SDLT on £1,200,000	£49,500
Legal, searches, valuation	£12,000
Total required	£1,261,500
Less deposit paid at exchange	(£100,000)
Less senior advance at 65% of price	(£650,000)
Needed on the day	£511,500

A buyer who budgeted "£1m, 65% debt, so I need about £350,000 plus costs" is roughly £150,000 short — and almost all of that gap is VAT and the stamp duty on it.

The SDLT trap, specifically

Stamp duty here is £49,500 because it is calculated on £1.2m. On £1m it would be £39,500.

That £10,000 difference is caused entirely by the VAT, and it is not recoverable. You get the £200,000 back. You never get the £10,000 back.

Net advance, not facility amount

Check what your lender is actually sending. Where arrangement fees or retained interest are deducted from the advance, the figure arriving at your solicitor is lower than the facility headline.

This matters doubly on a VAT facility. If £200,000 of VAT is due and the lender retains interest from a £200,000 facility, you are short on the day.

Do not count the reclaim as completion funding

The VAT refund is real money and it is coming. It is not available when you need it.

Depending on where your completion falls relative to your VAT quarter end, and whether HMRC verifies the claim, it typically arrives one to three months later. Budget as though it arrives late, and treat an early refund as a bonus.

A sanity check, a fortnight out

Confirm the VAT position in writing — is VAT payable, yes or no?
Recalculate SDLT on the VAT-inclusive figure.
Confirm the net advance from each lender.
Add every fee, including ones deducted at source.
Compare the total against cleared funds available.
If there is a gap, address it now — VAT funding takes 48 hours; VAT registration takes weeks.

The buyers who complete comfortably are not the ones with the most cash. They are the ones who did this arithmetic early enough to do something about the answer.

This guide is general information, not financial or tax advice. Figures are illustrative — your solicitor's completion statement governs.

Frequently asked questions

When is the VAT actually payable?: At completion, alongside the purchase price. It is not deferred pending your reclaim, and it cannot be withheld — the seller is accounting for it to HMRC.
Is SDLT payable on completion day?: The return and payment are due shortly after the effective date of the transaction rather than on the day itself, but the funds need to be available. Your solicitor will usually hold them.
What is the most commonly underestimated line?: Stamp duty, because people calculate it on the VAT-exclusive price. On a VAT-affected purchase that understates the bill, and the shortfall is not recoverable.
Should I budget for the reclaim arriving by a certain date?: Only cautiously. The timing depends on your VAT quarter and whether HMRC verifies the claim. Treat the refund as money that arrives in one to three months, not as part of your completion funding.

Related guides

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