What is Corporation Tax Funding and how can my business use it?

Every year most businesses in the UK receive a corporation tax bill from HMRC. Businesses will be charged on their taxable profits if they are an incorporated business. Corporation Tax in the UK is currently charged at 19%, HMRC will calculate the amount owed which is then due to be paid 9 months after the businesses accounting year finishes. Payments of Corporation Tax is a requirement that businesses must pay, failing to do so can result in hefty surcharges and fines.

There is now a facility in place that businesses can utilise to spread the cost of their Corporation Tax rather than paying one large lump sum.

Features of Corporation Tax Funding

Corporation Tax Finance is great for businesses as it allows them to pay their HMRC bill on time while avoiding late payment charges. With this facility you can make it work for you and your business, choose whether you want to spread the cost over 6 or 12 months rather than paying it in one large lump sum.  

You are not tied into any lengthy contracts. You can choose to renew when you receive your next corporation tax bill, use it as a one off or use it when and as your business requires it. 

Corporation Tax Funding is easy to arrange and is there to suit your needs.

Benefits of Corporation Tax

  • Easy to arrange
  • Ease Cashflow
  • Fixed monthly payments
  • Kee your businesses cash in the bank
  • Spread the cost over either 6, 10 or 12 months
  • Payments made directly to HMRC, so you don’t have to worry

Who is eligible?

Corporation Tax Funding is great for businesses who receive a tax bill from HMRC that is over £10,000. Businesses are also eligible if they are:

  • A limited company
  • A member’s only club
  • A trade association
  • Housing association
  • Any foreign company with a UK branch or office
  • Or a group of individuals operating as a business outside a partnership.

What should you consider?

It’s important to remember that bills to HMRC cannot be avoided. Failing to pay them can result in hefty charges and in the worst-case scenario HMRC can issue winding up orders if payments have been missed for a long time.

To avoid late payment charges, it’s always best to get in touch with a broker about Corporation Tax as soon as you receive the bill from HMRC.

The only other thing you need to consider is how long you want to spread the facility across. You can choose to either pay it other 6 or 12 months, whichever suits you and your business.

What fees are involved

There are no fees payable on Corporation Tax funding, you will just pay interest on the amount borrowed.

Examples of how it’s used

Corporation Tax is easy to use, as a business all you need to do is send the tax bill to your broker who will sort out the rest for you. HMRC are paid directly so all you need to do is set up payments to the lender.

Other Tax Options

Not only can you spread the cost of your Corporation Tax bill but you can also spread the cost of your quarterly VAT bill in monthly manageable payments. Like Corporation Tax Funding, VAT Funding enables you to spread the cost and avoid late payment charges. If you want to know more about VAT Funding, you can do here.

Take a look at our case studies to see how a VAT Funding facility has helped a business to spread the cost of their quarterly VAT bill into monthly manageable payments.