Liquidity Support for SME Housebuilders

A £100 million emergency loan fund has been created to support small and medium-sized (SME) housebuilders with liquidity issues due to the temporary closure of housebuilding sites.

The fund is open to applications from existing  SME housebuilders registered in Scotland and complements existing COVID-19 support schemes. The fund aims to:

  • safeguard jobs and protect suppliers
  • ensure a continued supply of homes
  • support post-COVID-19 economic recovery, and
  • retain diversity within the housebuilding sector.

Who can apply?

SME housebuilders which can demonstrate that:

  • they are a non-public organisation that have a business registered in Scotland which has been directly affected by COVID-19
  • they complete five or more homes in Scotland per annum
  • their annual turnover is less than £45 million
  • their business was financially viable before COVID-19
  • funding cannot be secured from existing private banks or other financial institutions or from their own resources to meet liquidity needs, and
  • the business has attempted to secure funding from the Scottish Government, UK Government or other public sector COVID-19 schemes before they have applied to the fund.

How much funding is available and on what terms?

The fund will offer short-term loan funding to applicants to cover COVID-19 liquidity support to their business. Key features include:

  • loans of between £50,000 to £1 million, which will normally be limited to a maximum of 25% of annual turnover
  • fixed interest rates of 2% per annum, and
  • flexible repayment terms, with the option for capital and interest payments to be offset for 12 months – the majority of loans are expected to be repaid within 24 months.

Providing security will help reduce the risk profile of loan funds for the Scottish Government

How to apply

More details on how to apply for the support are available on the website here.

Get in touch

If you have any questions about the liquidity support for SME housebuilders, please get in touch by completing the contact form below.

Real Estate Matters – Issue 15

The MHA Construction & Real Estate team have worked together to provide a national outlook on the issues facing the construction and real estate sectors.

Issue 15 of Real Estate Matters contains articles on utilising tax incentives to maximise cash flow, IR35 and the Off-Payroll legislation, funding during COVID-19, construction insolvency, details of the latest house price growth and key news for the sector.

VAT on new house building: Are there any special rules that apply?

Are you a new house builder and are unsure about the rules & restrictions for VAT?

In this short video Alan Davis, VAT Partner here at MHA Henderson Loggie, shares some insight into the Value Added Tax rules for new house builders.

Covered in this video:

✅ Common misconceptions about VAT for new house builders
✅ What are the VAT restrictions?

If you have any questions about VAT for new house builders, please contact Alan directly at

Edited video transcript

VAT for new house builders

Generally speaking, when I’m advising builders who make new houses, they’re typically aware that there are VAT restrictions on input tax on the costs of building those new builds, but I find very often that the people who are dealing with these points quite often change. You’ll have somebody who’s changed jobs, and the next person will either not be aware that there are restrictions or will forget over time. One of the things I do when I’m talking to them is ensure that they’ve got good systems in place to ensure that everyone’s aware of the implications of VAT and new house building.

Common misconceptions

It’s a common misconception that VAT becomes part of the financial annual audit and that accountants are looking at the treatment of VAT as part of their audit. Historically, I would have thought that was the case as well when I was in HMRC, and that’s not the case. It’s a common misconception. It’s really down to you to focus on VAT and know the rules about what you can recover VAT on and what you can’t. The information in this video is quite general, and so we would always recommend that you take specific professional advice of your own to ensure that you get the VAT position correct.

What are the rules applying to house building?

Well, the main one is the treatment of white goods. You’re restricted from recovering VAT on things like refrigerators, washing machines, dishwashers, and so on. In addition, the treatment of flooring is quite important. You’re not entitled to recover VAT on carpets, but if you lay down a hardwood floor, that VAT is recoverable. Similarly, most new house builders have sales and incentive schemes, for example, part exchange and the extra furnishings, curtains and so on. Each of those have VAT implications and specific VAT treatment. You’d really need to keep an eye on those.

Any questions about VAT for new house builders?

If you’re involved in the construction of new houses or the VAT treatment of the costs of doing so, or if you’ve got questions or comments, please feel free to contact Alan directly at

The information is this video is of a general nature and seeks to highlight some of the issues which could be affecting you and/or your business, including changes to financial regulation and legislation. Viewers should not rely on this information without seeking professional advice on its application in their circumstances.

Blair Davidson

Blair trained and qualified as a Chartered Accountant with MHA Henderson Loggie and currently specialises in providing external audit services to a wide range of medium and large commercial clients across a variety of sectors including motor retail, manufacturing & engineering, healthcare, construction and transport.

Having spent time on secondment with a number of MHA Henderson Loggie’s clients in both the private and public sectors, Blair has practical experience of the commercial environment in which our clients operate.

In addition to his role in audit, he manages a range of accounting and management accounts assignments and is head of the firm’s Property & Construction sector group.