Tax and VAT Loans

Ease the pressure of upcoming tax bills. A Tax or VAT Loan lets you spread the cost of HMRC liabilities over manageable monthly payments—protecting cash flow, avoiding penalties, and keeping your business running smoothly.

WHAT IS REQUIRED

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Evidence that tax liabilities are all up to date

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Details of the tax or VAT liability due

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Latest annual accounts

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6 months’ business bank statements

WHY CHOOSE IT?

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Fast access to funds

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No need for security

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Predictable repayments

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Protect cash flow

What is a Tax and VAT Loan?

A Tax and VAT Loan is a short-term finance solution designed to help businesses manage upcoming tax liabilities, including VAT, Corporation Tax, and Self-Assessment bills. Rather than making a large lump sum payment, you can spread the cost over manageable monthly repayments, preserving cash flow and keeping working capital available for business operations.

These loans can be arranged quickly, often within a week, ensuring you meet HMRC deadlines and avoid late payment penalties.

TAX and VAT bills can be funded retrospectively if you have paid HMRC within 30 days.


How does a VAT or TAX loan work?

Application Process:

  • Submit an application with the required financial documents (see below).
  • The lender assesses your business's financial health, revenue, and creditworthiness.
  • A decision is typically made within 24 – 48 hours.

Repayment Terms:

  • Fixed monthly repayments over 3 to 12 months, in line with your tax or VAT payment. For example, if you pay VAT quarterly, your repayment term will be 3 months. For corporation tax, it will be a 12 month term.
  • You can choose to make your first repayment upfront (on the day the loan completes), or after 30 days.
  • Interest rates are fixed and will be determined by loan term.
  • Funds are paid directly to HMRC some cases or to your business account if funded retrospectively.

When is a Tax and VAT Loan suitable?

This type of loan is ideal for businesses that:

  • Need to pay a VAT or tax bill but want to spread the cost rather than depleting cash reserves.
  • Prefer predictable, fixed monthly repayments to better manage cash flow.
  • Want to avoid late payment penalties and interest charges from HMRC.
  • Are waiting for customer payments or experiencing seasonal fluctuations in income.
  • Require fast access to funds, with approvals typically within 48 hours.


What is required for an application?

To apply, you will typically need:

  • 6 months' business bank statements
  • Latest annual accounts
  • Up-to-date management accounts 
  • Details of the tax or VAT liability due
  • Evidence that tax liabilities are all up to date
  • Director details, including residential status


FAQs

Can I use a Tax and VAT Loan for other business expenses?

No, Tax and VAT Loans are specifically designed to cover VAT, Corporation Tax, or Self-Assessment bills. However, if you have already paid your HMRC liability, you may be able to use this loan to reimburse yourself, freeing up capital for other business needs. If you require funding for general business expenses, a standard business loan may be a more suitable option.

Can I repay the loan early?

Most specialist tax funders offer no discount or saving on interest if you repay early. Always check the terms with your lender.

Do I have to have good credit history?

A strong credit history can improve your chances of approval and help secure better interest rates. However, some lenders offer Tax and VAT Loans to businesses with less-than-perfect credit, focusing more on your business’s financial health and ability to repay. If you have adverse credit, lenders may require additional guarantees or higher interest rates.

Do I need to be a homeowner to apply?

Not necessarily. Some lenders may require a homeowner guarantor, but others do not.

Can I apply if I have outstanding tax debt?

Yes, but lenders will assess your ability to repay the loan alongside your existing liabilities, and you will likely need to be in an arranged Time-To-Pay (TTP0. If you have significant tax arrears, this may affect your application and may need to seek alternative options. Please contact us to discuss this.

I have already paid my tax or VAT bill, can I still apply?

Yes, if you have already paid your tax or VAT bill, you can be funded retrospectively up to 30 days after payment was made.

My tax or VAT bill is overdue, am I eligible to apply?

Yes, you may still be eligible, but some lenders will not accept applications for overdue tax liabilities. Approval will depend on the lender's criteria and your business’s financial position. If you have arrears, lenders may require additional security or evidence of a repayment plan with HMRC.

What security is taken for a VAT or Tax loan?

In most cases, lenders will require a personal guarantee from the business owner or director. However, some lenders may waive this requirement for loans below a certain threshold, depending on your financial profile and the lender’s criteria.

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Choice Loans is a broker, not a lender. We will connect you with a lender suitable for your needs or, if appropriate, a specialist broker. We do not charge you an upfront fee but, if your application is successful, a broker commission may be charged.