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VAT & TAX FUNDING
How Can We Help?
Depending on the size of your business, you will have various tax bills throughout the year. These could Include VAT, Corporation tax and personal tax. Often, the lump sum payment of a tax bill can significantly affect cash flow. This could be for various reasons, but in the current economy the uncertainty may be leaving business levels and cash within the business fluctuating.
We can help spread the cost of your tax bill as you would with other outgoings such as rent, rates, utilities, and more.
Vat Loans
If you are a VAT registered business, you will know the VAT bill comes around quickly each quarter. In an ideal world, this is planned for, with money set aside each quarter to cover the cost. However, business can be unpredictable in the current climate, so here’s how we can help:
1. Cover the cost of the VAT bill and allow you to spread the cost over the next 3 months.
2. Pay HMRC directly on the date the bill is due and you make the first payment 1 month after HMRC are paid.
3. Maximum term for payments is 3 months as loan needs to be cleared by the time the next VAT bill is due.
4. Can fund VAT on a rolling basis. Once quarter 1 is clear, you can then fund next quarter and so on. This will essentially spread the VAT bill for the year over the year rather than paying quarterly.
5. Minimum loan amount is £10,000 with no upper limit.
6. No personal guarantees required from directors and shareholders for loans under £150,000 and can request none on loans above this amount on a case by case basis.
Corporation Tax
The terms for corporation tax are very similar with one notable difference.
1. The loan can be spread across 12 months or longer depending on when the bill is due to be paid to HMRC.
2. HMRC paid directly and payments start 1 month after.
3. For both VAT and Corporation Tax loans, you can be re-imbursed if you have already made the payment to HMRC directly.
A. Up to 14 days after payment was made for VAT
B. Up to 30 days after payment was made for Corporation Tax
Considerations
What could a tax funding line do for you?
By funding tax you could alleviate the worry of that large, looming tax bill as there are other bills to be paid. In business, cash flow is key so by spreading the cost of tax you can maintain the levels of cash within the business which can help future planning. This cash could be used for unforeseen issues or growth and expansion.
To find out how this could benefit you and your business arrange a call today. We’ll run through initial questions to identify where you need help and make a recommendation. On the back of this, all we need are the following documents and can have funding in place quickly:
1. Latest year end accounts for your business
2. Latest MI for your business
3. Latest 3 months business bank statements
4. Snapshot of HMRC to show no other tax outstanding on top of the bills we are looking to fund.
If you wish to fund the next quarters’ tax bill, the same documentation will be required again for an underwriting decision.
