Tax & VAT Funding

What tax funding actually is

A lender pays your tax liability, or advances you the amount, and you repay over an agreed term — typically three to twelve months. HMRC is paid on time and in full, so you stay compliant, and the cost is spread across the months rather than landing in one.

It is not a substitute for profitability. It is a cash flow tool for a business that can afford the tax but cannot afford it on the day it falls due.

Before you borrow: HMRC Time to Pay exists, and it is free

We should say this plainly. HMRC offers Time to Pay arrangements that let you spread a bill in instalments, and there is no arrangement fee. If you qualify and it works for you, that is usually the cheaper option and you should take it.

A tax loan makes sense when Time to Pay is refused, when the period offered is too short, when you would rather not have an arrangement on your record, or when you need certainty rather than a negotiation. Those are real situations — but anyone who sells you a tax loan without mentioning Time to Pay is not being straight with you.

Corporation tax and VAT

The two most commonly funded liabilities. Corporation tax falls nine months and a day after your year end, often long after the profit was earned and spent. VAT is quarterly and relentless, and a single large invoice can create a liability before the customer has paid you.

Cash flow and working capital more broadly

The same short-term facilities cover wider working capital needs — a payroll gap on a long contract, a supplier who wants payment before your customer pays you, or a seasonal trough. Cash flow finance is priced on the strength of the business rather than on an asset, so it is assessed differently from the asset finance we usually arrange.

Where to go next

• Corporation tax loan — spreading a CT600 liability.
• VAT loan — funding a quarterly VAT bill.
• HMRC Time to Pay explained — how the free option works first.
• Cash flow and working capital funding — beyond tax.

Being clear about what this costs

Short-term unsecured lending is more expensive than asset finance, because there is no asset securing it. Anyone telling you otherwise is selling. What it buys is timing — and for a business with a tax bill due and a customer paying in sixty days, timing is often worth the cost. We will tell you the total cost before you commit, not the monthly figure.