A large VAT or Corporation Tax bill landing all at once can put real pressure on cash flow. VAT and tax bill finance lets you spread that cost over manageable instalments. We help incorporated UK businesses compare options through Funding Options by Tide’s panel of partner lenders.
The short answer
VAT and tax bill finance is a short-term business loan used to pay a VAT, Corporation Tax or Self Assessment bill, which you then repay to the lender in fixed instalments over a set term — commonly 3 to 12 months. It lets you meet an HMRC deadline without taking the full amount out of your working capital in one go.
It is used by profitable businesses that simply want to smooth a lumpy, predictable tax bill across the quarter or year rather than absorb it in a single payment.
The lender advances the amount of your tax bill, which is either paid to you or applied to the bill, and you repay in regular instalments over an agreed term. This keeps cash in the business for day-to-day trading while still meeting the HMRC deadline.
These facilities are typically short term and unsecured, though terms vary by lender. Any interest rate, amount or repayment figure is indicative and set by the lender following their own checks.
Spreading a tax bill can be sensible when the underlying business is trading well and the bill is simply a timing problem. It is worth comparing the cost of finance against any arrangement HMRC may offer directly, such as a Time to Pay plan.
Finance is available to incorporated UK businesses and is subject to status, lender checks and formal approval. If you are facing genuine financial difficulty, consider taking independent advice as well as comparing finance.
All figures shown are indicative only, not a formal offer, and are subject to status, lender checks and formal approval. Actual rates, amounts and terms are set by the lender.
Representative example: for a business loan of £25,000 over 36 months at 8.9% APR (fixed), you would repay 36 monthly instalments of £794. Total amount repayable £28,584. An arrangement fee of £750 is payable and is reflected in the APR. Representative 8.9% APR.
Questions
These facilities are commonly used for VAT, Corporation Tax and Self Assessment bills. Availability and terms depend on the lender and your circumstances, subject to status and formal approval.
Terms are typically short, often 3 to 12 months, though this varies by lender. The exact term is indicative until the lender confirms it following their assessment.
Many VAT and tax bill facilities are unsecured, but this depends on the lender, the amount and your business profile. Any security requirement is confirmed by the lender as part of formal approval.
HMRC may offer a Time to Pay arrangement in some circumstances, so it is worth comparing that against finance. Funding Options by Tide is a credit broker and can compare finance options from their panel of partner lenders if you decide borrowing suits you better; it is not a lender.
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