Corporation tax loans
A short facility that converts one large annual tax payment into instalments you can plan around, without touching your working capital.
Request a callback- Typical amount
- Size of the tax bill
- Typical term
- 6 to 12 months
- Security
- Usually unsecured
- Speed
- Often within days
Figures are indicative market ranges at the time of writing, not offers or quotes. What is available to your business depends on the lender, your circumstances and the security available.
About corporation tax loans
Corporation tax has an awkward quality: it is calculated on last year's profit and payable roughly nine months after the year end, by which point trading conditions may look nothing like they did when the profit was earned. A good year followed by a slow quarter can leave a healthy company with a very large payment and not much liquidity.
A corporation tax loan settles the bill in full and spreads the cost over the following six to twelve months. The company avoids interest and penalties from HMRC, keeps its overdraft free for trading, and pays a predictable monthly amount instead of one heavy sum.
Whether that is worth doing is arithmetic rather than opinion. Compare the cost of the facility against what the money would earn or protect if it stayed in the business, and against an HMRC Time to Pay arrangement. Sometimes borrowing is clearly right; sometimes paying it and moving on is cheaper. We will do that comparison with you.
Typical reasons to use it
- A profitable prior year followed by a slower current one, leaving cash and liability out of step.
- Preserving an overdraft or invoice facility for trading rather than for tax.
- A large opportunity that needs funding at the same time the tax falls due.
- Smoothing the payment across the year for easier and more predictable budgeting.
- Avoiding HMRC interest and the administrative burden that comes with a missed deadline.
Points to weigh
- The tax is owed either way — this changes the timing, not the amount.
- Set the cost of the facility against an HMRC Time to Pay arrangement before deciding.
- Relying on it every year suggests profits are not converting into cash, which is worth looking at.
- Arrange it before the due date; options narrow considerably once a payment is late.
- The facility is short, so repayments are relatively heavy — check they fit alongside everything else.
Frequently asked
What do lenders need to see?
Your latest accounts, recent business bank statements and the computation showing the amount due. Because the facility is short and the liability is verifiable, decisions tend to be quicker than for general term lending.
Can partnerships and sole traders use this?
The equivalent for self assessment liabilities exists too, though the lender panel is different and the arrangements often sit closer to personal borrowing. Tell us how the business is structured and we will point you at the right product.
Is it better to just agree Time to Pay with HMRC?
Sometimes, and we will say so when we think it is. Time to Pay carries no arrangement fee, though it does carry interest, and it involves disclosing your position to HMRC. A commercial facility is more discreet and more predictable, but it costs more.
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Tell us what the money is for
A short conversation is usually enough for us to tell you what is realistic — including when the answer is that you should not borrow.
