Many profitable businesses still run into cash flow problems — and it often hits hardest when a big tax bill comes due.
If you’re struggling to pay your VAT or Corporation Tax bill on time, you’re not alone. HMRC deadlines don’t always line up with when your business gets paid. But ignoring the issue can lead to penalties, interest charges, or legal action.
Here’s what to consider if you can’t afford to pay your tax bill — and how short-term business finance may offer one possible route to help manage the pressure.
1. Don’t Ignore the Deadline
Acting early can make a big difference. If you miss a tax deadline without taking action, HMRC can:
- Add late payment penalties
- Charge daily interest
- Begin debt recovery or legal action
Engaging early — either with HMRC or a suitable finance provider — can help you avoid unnecessary consequences.
2. Speak to Your Accountant or Bookkeeper
Your accountant may be able to:
- Estimate your tax liability accurately
- Contact HMRC to discuss your situation
- Explore a Time to Pay Arrangement (TTP) with HMRC
However, not all businesses are approved for a TTP, and it may still require a lump sum contribution upfront.
3. Explore Short-Term Business Finance as an Option
Some businesses consider using short-term finance to cover their VAT or Corporation Tax bill and then repay it in instalments. This can help reduce immediate cash flow pressure while avoiding penalties from HMRC.
At Funding Pool, we work with a panel of UK lenders who offer dedicated VAT and tax loan products. These are designed for businesses with upcoming tax deadlines that prefer to spread payments over a longer period.
4. How It Typically Works
While every lender and product varies, most VAT or Corporation Tax loan facilities follow this general structure:
- Submit an online enquiry
- Be introduced to lenders who may offer tax-specific loan options
- Receive a funding decision (often within 24–48 hours)
- Funds are released to your business
- You pay HMRC or the lender may do so directly, depending on the arrangement
Loan amounts may range from £5,000 to £500,000, with repayment terms typically between 3 to 24 months. All loans are subject to status, affordability checks, and lender criteria.
5. Who These Products May Suit
Tax loan products may be suitable for businesses that:
- Are UK limited companies or LLPs
- Have been trading for at least 12 months
- Face an upcoming or overdue VAT or Corporation Tax bill
- Can demonstrate an ability to repay in instalments
We always recommend speaking to your accountant or an independent financial adviser before making financial decisions.
Final Thoughts
Facing a VAT or Corporation Tax bill you can’t afford can be stressful, but there are options. Whether you’re speaking with HMRC directly or exploring business finance solutions, taking action early can help you stay in control and protect your business’s future.
Interested in exploring finance options?
Start your enquiry online or get in touch with our team for more information.
Funding Pool is a credit broker, not a lender. We introduce applicants to a panel of lenders and may receive commission for introductions. We do not provide financial advice.