An introduction to tax loans
“Nothing can be said to be certain, except death and taxes,” Benjamin Franklin famously penned in 1789, and even today we are bound to our duty to pay taxes. For business owners, in addition to personal taxation – often through the Self Assessment system – regular payments include Corporation Tax, in some instances Capital Gains Tax and Inheritance Tax, and, if registered for the scheme, Value Added Tax, commonly known as VAT.
While some companies have regular income and expenses which makes budgeting for HMRC tax bills a relatively straightforward accounting process, others – particularly sectors such as construction and property – may experience several years of considerable expense followed by a peak in profit, and yet be caught in a constant cycle of reinvestment in new projects. This is not a unique scenario for developers and construction companies, and there are many industries which require significant investment into machinery or equipment which can make trading erratic with peaks and troughs of income and debt.
One solution is a tax loan facility which can help manage the recurring expense of HMRC payments and enable a company to spread the costs of tax bills into manageable monthly payments. Typically taken over 12 months, payments can be made directly to HMRC or to a bank account to enable tax bills to be paid by required deadlines and to avoid HMRC fines or late penalties such as interest.
Will I be eligible for a tax loan?
Quick and easy to arrange, often in as little as 24 hours, an unsecured tax loan can help to protect a business’ existing cash reserves and cover HMRC bills with one monthly payment over the agreed repayment period. Improved cashflow has the potential to enable a company to remain agile, competitive and embark on plans to grow and expand.
Loans for income tax bills can be used by sole traders, partnerships and members of a limited liability partnership which have been trading for more than 12 months with at least one set of full financial reports. Funding is available from £2,000 with no upper limit, subject to availability, and once agreed the loan can be released in as little as 48 hours.
As Corporation Tax is paid by Limited Companies retrospectively, it can be easy to get caught short if a company has been unable or failed to put enough aside throughout the previous year. In some instances, funding a VAT bill can have tax benefits as interest payments are offset against Corporation Tax later in the year, and a loan can provide a reliable source of cash to cover payments which might otherwise become detrimental to a business’ ability to trade.
Even if a business has paid a tax bill, but finds that this outlay has depleted its cashflow or reserves to an uncomfortable level, a retrospective tax loan can also provide an unsecured loan with fixed rate repayments to support trading. With most applications made digitally, find out how easy and simple it is to organise a tax loan and have one less thing to worry about as a business owner.
