VAT and Tax Loans

VAT and other tax bills can come at awkward times. They’re predictable and the amount is known in advance, but that doesn’t always mean the cash is readily available to pay them when they fall due. 

HMRC is becoming an increasingly intolerant creditor and can be quick to issue fines and even winding-up orders to businesses that fall into arrears. Ignoring the situation can have dire consequences, so it’s important that you act. 

Loans can be arranged to allow you to meet the bill on time. 

These are typically short-term facilities of three to six months duration to allow you to pay the bill in instalments rather than in one amount.  However, before directing you to a VAT or tax loan, we will always see if the reason for the cash flow issue relates to something else. For example, your business might have spent money on business equipment recently and a longer term business loan to refinance that might be more appropriate than a tax loan.

If it is a tax loan that you need, interest only arrangements might be possible if you’re waiting on a lump sum.

The interest rates and fees can be higher than you would expect to pay for general working capital finance because the lender is perceiving a higher level of risk, but nevertheless, it should only be for a short period of time and can be a price worth paying for the peace of mind.

The alternative to borrowing the money is to negotiate directly with HMRC. HMRC might allow you time to pay if you tell officials in good time. Many people, though, are concerned about drawing attention to their business with the tax authorities and prefer to deal with the situation in other ways if they can.

Talk to us about arranging a VAT or tax loan.

Need to discuss your options?

Have a chat with one of our experts.

We are delighted – Tamara has helped us with arranging different business funding from different lenders to match our needs as we have expanded