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Automotive tax advances: Accelerating cash flow in the race to net zero

The 2021 ZEV mandate comes with a bold promise that “economic growth and reducing emissions can go hand-in-hand,” – and we couldn’t be cheering louder. 

But there’s no denying that the high expenditure of eco automotive companies can lead to daunting cash flow challenges. Going green has a high payout for our planet and people – but it isn’t without upfront costs. 

For example, purchasing a fleet of EV vehicles or manufacturing BEV, PHEV, HEV, and FCEV batteries remain eye-wateringly expensive. Price parity with ICE models is a long way off.

It’s clear that in the race to net zero, managing increased expenditure and cash flow demands a gear shift. 

Luckily, automotive isn’t the only industry electrified with new developments. Fintech never sleeps and in recent years new technology has allowed companies like us, Adsum, to provide rapid cash advances on VAT reclaims and tax credits to support innovative, fast-growing businesses.

Access more capital, accelerate your timelines 

The 2021 Net Zero Strategy highlights how the UK can continue to lead the pack by pioneering greener growth. 

How? By making the UK the best place to do business. 

That’s where we at Adsum play our part. We help create the conditions for UK companies to supercharge their capital flow by taking out a major roadblock – the slow and inefficient HMRC tax relief process

A company with an annual expenditure of over £6m could typically be owed £1.2m in tax reclaims over the year. Unfortunately, what’s also typical is that it will take up to 40 hours of admin per week and 3 months each time a tax return is filed until HMRC pays out. 

But there is a way to get ahead of the curve. Adsum advances your VAT relief and tax credits so that you can advance your business. You can reinvest your funds immediately, allowing you to stay competitive and accelerate your timelines towards net zero. 

Electric vehicle charging

How does it work? 

Our model is bold and simple. You get what you are already entitled to from HMRC – only faster, allowing you to use your taxes to solve your cash flow

There are two lines of credit that Adsum unlocks for the automotive industry; advances on VAT returns and Research and Development (R&D) Tax Credits.  

Our credit advances include: 

  • Payouts in as little as 24 hours
  • No maximum limit on reclaim size
  • Suitability for startups, sole, and small-to-medium traders
  • Zero upfront fees 

Advances on VAT returns 

HMRC aims to process refunds within 30 days but the reality is often longer. In recent months, HMRC had to compensate companies after repayment delays in excess of 31 days caused cash flow issues. 

But a pinched cash flow has downstream consequences you want to avoid. At Adsum, we make your VAT reclaims fast and easy, offering upfront payment on any asset purchase, including:

  • Single purchase assets
  • Recurring purchases 
  • Input purchases 

With an Adsum VAT advance, you can put your tax claims on cruise control and focus on your business.

Advances on R&D Tax credits

As part of the Net Zero Strategy, an extra £22 billion has been pledged to R&D. This is fantastic news for the innovators in the automotive sector – but the availability of R&D tax credits is also worth celebrating. 

R&D Tax Credits allow you to offset your tax against your investment in developing new products, processes, or services, so you can scale up your efforts to reach net zero targets. 

So, for example, if you are participating in the Faraday Battery Challenge or working on developing and deploying CAVs, you could be eligible to apply for a cash payment and/or Corporation Tax reduction.

Eligible R&D could include: 

  • Producing parts, solutions, and technologies that reduce emissions
  • Innovating materials to level-up existing product performance 
  • Developing enhanced safety solutions 
  • Prototyping and testing in the run up to commercial production 

However, much like VAT returns, HMRC is unreliable – take the most recent SME Tax Credit claims processing delays in January 2022. For automotive companies that make significant R&D investments, delays like this can be an equally significant setback. 

Through Adsum, you can instead receive your credit within 48 hours and access funds immediately to start your next project.

Our advances move as quickly as you do 

The automotive industry has time to wait for nobody – least of all the trundling machine of HMRC, which eats up your time and gives super-slow-motion responses.

Thankfully, Adsum advances are designed to work with movers and shakers like you. We take care of the entire HMRC claim process, including tax credit calculations, forms, reviews, filings, and communication. 

What’s more, the HMRC payout comes straight to us, leaving you free of loose ends to chase – and you get your advance payment immediately. 

Just like the Tesla Model S, Adsum is built for speed and efficiency. 

Put your cash flow in the fast lane with Adsum today

With Adsum, it’s yes to net-zero and yes to a tax advance. Contact us directly to find out more or simply start your claim today.

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