Using Bridging Finance to Resolve an Urgent HMRC Liability and Prevent Asset Seizure

Client Background

Our clients were a married couple based in Sutton, Surrey, who jointly owned their main residence valued at approximately £600,000, alongside additional property assets including a buy-to-let property and a hotel business valued at approximately £2.5 million.

The clients were semi-retired landlords generating income from both rental properties and their hotel business, which was being operated by their son.

At the time of the application, all of the properties were unencumbered with no existing mortgages, creating a strong overall asset position.

 

The Scenario

The clients required urgent funding in order to resolve a substantial outstanding HMRC VAT liability.

Their objectives were to:

• Raise approximately £700,000
• Repay an outstanding HMRC VAT liability of approximately £700,000, with £100,000 already paid
• Avoid HMRC enforcement action, including the potential seizure of business or property assets
• Structure the borrowing on a short-term basis
• Exit the facility through the sale of the buy-to-let property and refinance of additional assets

The funding was required urgently due to the significant risk of HMRC taking enforcement action if the liability was not settled within the required timeframe.

The Challenges

This case involved several critical complexities that required fast action and strategic lender selection.

The transaction was highly time-sensitive due to the urgent repayment deadline imposed by HMRC, while the size of the liability required substantial funding to be arranged quickly.

The structure also involved securing borrowing across multiple properties, adding further complexity to the transaction. In addition, the purpose of the funding related to a tax liability, which falls outside standard residential lending criteria.

Traditional mortgage options were therefore unsuitable due to the transaction’s urgency, complexity, and specialist nature.

The Solution

We arranged a tailored regulated bridging loan designed specifically to raise capital quickly across multiple property assets.

The funding solution included:

• A net loan amount of approximately £700,000
• A 12-month term
• A loan-to-value of approximately 43.75%
• Rolled-up interest with no monthly repayments required
• First charge security secured across multiple properties
• Fees added to the loan to preserve liquidity

The overall security structure included:

• Main residence valued at approximately £600,000
• Buy-to-let property valued at approximately £480,000
• Additional family property valued at approximately £520,000

The lender selected offered the flexibility and speed required for a complex, high-value transaction.

 

Implementation Process

Given the urgency of the situation, this case required a highly responsive and carefully coordinated approach throughout the process.

We carried out a detailed review of the clients’ wider asset portfolio before structuring a bridging facility secured across multiple properties. A suitable lender was then sourced to accommodate the size of the funding requirement and the time-sensitive nature of the HMRC liability.

The facility was carefully aligned with the proposed exit strategy through a future property sale and/or refinance, while communication among all parties was managed proactively to ensure the funding was completed within the required timeframe.

This hands-on approach enabled the clients to resolve the liability quickly while protecting their wider property and business assets.

 

The Outcome

The bridging loan completed successfully, enabling the clients to settle the HMRC liability and avoid enforcement action.

As a result, the clients were able to:

• Repay the outstanding HMRC liability successfully
• Avoid potential seizure of business and property assets
• Leverage their wider property portfolio effectively
• Maintain flexibility through rolled-up interest with no monthly repayments
• Move forward with a clear and manageable exit strategy