Finance for VAT or tax bills
If an overdraft doesn’t cover it, you could look at releasing the capital locked in your business. Any high-value assets you own could be sold and leased back to you, ensuring instant cash without having to do without the asset.
Situations you may want to finance
Here are some of the situations you might want to finance:
Quarterly VAT
If you're preparing for your quarterly VAT return and owe VAT to HMRC, it’s an important obligation of the business. Plan ahead to ensure there is sufficient cash in the business if you owe such VAT payments. If things didn't go to plan, don't worry — VAT financing is a dependable source of cash.
Corporation tax
If your business is a limited company, you'll pay tax once a year. Because it's retrospectively paid, it's easy to get caught out if you haven't been putting enough aside throughout the year. You'll need to check your accounting year, because that determines when the annual tax is owed.
Payroll
If you are due to make your PAYE soon, this is as good a time as any to sit back and assess the working capital available in the business for these payments. Christmas also represents a particularly tricky payroll period, as most companies bring forward payday and pay staff wages early.
Quarterly rent
Does your business lease premises? Many small businesses are due to pay their rents quarterly — but less frequent payments means it's a bigger lump sum out of your business bank account when the bill is due.
Other unforeseen bills
It may be the case that overheads you didn’t expect have arrived at your door with an urgent payment date. Or, perhaps your creditors are demanding payment sooner than previously negotiated. These are all common business circumstances that place lots of viable companies in challenging situations, particularly if the creditor is HMRC after building up arrears.
January and the New Year
In January, businesses can experience all of the above — quarterly VAT bills and rent are due, staff have been paid early, and customers are paying invoices late because everyone goes on holiday over Christmas. There's a range of finance that can help, whether it's a short-term business loan, a bridging loan, an overdraft alternative or another type of cash flow finance.
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Tax and VAT finance options
Don't have enough working capital?
It's a familiar feeling for business owners all over the country: you discover a tax bill is due and realise you don't have enough working capital set aside to pay for it. But there are lots of ways you can fund a tax bill and cope with HMRC arrears — and using a tax bill loan is an increasingly common way to stay safe and be prepared for the next set of payments.
Don't delay, just pay
HMRC has escalated business winding-up orders and liquidations, and we always remind businesses of the dangers of putting off paying a tax bill. Given the inconsistent nature of the way tax is chased, we frequently see businesses waiting until reminder letters are sent, but it's wise to have a plan in place long before any contact is made by HMRC — for example, a business overdraft alternative that can be dipped into in times of need.
Outstanding tax bill
One of the main reasons is that lenders may refuse to lend to you with an outstanding tax bill — which means the situation can quickly spiral out of control. It can be very risky playing chicken with HMRC, and the result could be more than just a slap on the wrist. It might be a threat to the existence of the business itself.
Finance for HMRC tax bills
We all know paying off tax bills takes a huge chunk out of your coffers, and it's never something business owners look forward to. However, it's important to be able to comfortably manage these payments year-on-year (or quarter-on-quarter), whilst maintaining a comfortable level of working capital so you can keep your business ticking over.
Tax finance options
There's a huge assortment of tax finance options that have been created to help you maintain healthy levels of cash flow at all times. Although all good business owners are aware of their duty to HMRC, sometimes it’s difficult to predict when you’ll have a shortfall.
How much can you afford to borrow?
If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.
Want to understand the cost of your loan?
Use our business loan calculator below to find out how much you can borrow to take your business to the next level.
Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
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Financial product information
Representative example*
• 7.63% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,252.94. The total amount payable is £54,070.56
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 2.75% APR
Repayment period
1 month to 30 years terms
How do I finance a tax or VAT bill?
January and April
January and April are both times when a lot of your business bills become due as a business owner, and the taxman is coming down hard on firms who owe money to HMRC.
Options
It’s the businesses that aren’t aware of their options that are suffering the most, but all is not lost if your business finds itself late paying tax. You may be able to finance a tax or VAT bill.
Tax or VAT
You may be able to finance a tax or VAT bill.
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
