Spreading the cost of tax: A value-added option

Cashflow can sometimes make paying your tax on time a struggle. Did you know that there could be a solution to help?

You can obtain finance to help you spread the cost of your bills such as corporation tax, professional indemnity insurance, and VAT.

Key advantages

Value Added Tax (VAT) loans give you the possibility to spread the cost of your VAT bills over 3 months. Simply put, they are short-term business loans that give you the flexibility you may temporarily need.

There are also alternative funding options on the market such as business loans, invoice financing or merchant cash advances, that may have more flexible repayment terms and lower interest rates.

What are the charges if my VAT return is submitted late?

The fee will be a percentage charge of the outstanding amount you owe to the HMRC, and will increase depending on how late you are to submit

What are the charges if my VAT is paid late?

From 1 January 2023, HMRC will charge VAT-registered businesses late payment interest from the first day their payment is overdue until it is paid in full. For VAT accounting periods starting on or after 1 January 2023, you’ll be charged late payment interest on overdue payments. This is one of several penalty and interest changes that replace the existing VAT default surcharge. 

The changes mean that if you pay VAT-related amounts late, you’ll be asked to pay late payment interest on the amount outstanding, from the first day your payment is overdue to the day you pay it in full. If the payment is more than 15 days late, you will also be asked to pay a late payment penalty— the sooner you pay, the smaller the penalty will be. Interest will be charged on all late payments where VAT is due. This includes amounts overdue following:

>VAT Return
>Amendment or correction of a return
>VAT assessment made by HMRC
>Missed VAT payment on an account

You can find further information on HMRC website link below; alternatively speak with your tax adviser

https://www.gov.uk/government/collections/vat-penalties-and-interest

How does finance for VAT work?

Our chosen funder will often pay HMRC directly allowing you to pay the loan, plus fees, over three equal monthly instalments. This supports cashflow rather than having to settle the bill in one lump sum payment.

To discuss the finance options available to you, get in contact with one of our specialist brokers today for a free consultation


Published 8 October 2024


Get in touch

If you would like any further information or guidance, please leave your details below and a relevant member or the team will contact you.


    Interesting Article

    Share and discuss

    Share Facebook    Share Linked In

    Latest News


    Refinancing a Commercial Property

    Refinancing a commercial property can help a business improve its cash position, release equity or move to a mortgage that better suits its plans. Before applying, it is worth understanding […]

    The safety net every business owner overlooks: PG Insurance explained

    Running a business often means taking financial risks such as loans, credit lines &  supplier agreements  are  all part of keeping things moving. But what happens if your business can’t pay its debts? Many […]

    Luxury Car Finance: Funding Your First Purchase or Your Next Addition

    Whether you are buying your first luxury car or adding to an existing collection, it is a significant purchase. That could mean a supercar, a high-end performance car or a […]

    Growth lending: how businesses can fund expansion without losing momentum

    Growth is an exciting stage for any business, but it often comes with a challenge… How do you fund it properly? Whether you’re hiring new staff, investing in equipment, expanding […]

    How Bridging Loans Can Help UK Businesses Act on Time-Sensitive Opportunities

    In business, timing can be the difference between securing a valuable opportunity and missing out. Whether a business is buying commercial property, purchasing stock at a discounted price, funding a […]

    Unlocking the Right Development Finance: What Every Property Developer Should Know

    Whether you’re planning your first development project or managing multiple sites, one thing remains true: securing the right development finance can have a huge impact on your project’s profitability, cash […]

    The Safety Net Every Business Owner Overlooks: Personal Guarantee Insurance Explained

    Running a business often means taking financial risks. Loans, credit facilities, supplier agreements, and growth funding can all play an important role in keeping a business moving forward. But many […]

    Growth lending: how businesses can fund expansion without losing momentum

    Growth is an exciting stage for any business, but it often comes with a challenge… How do you fund it properly? Whether you’re hiring new staff, investing in equipment, expanding […]

    What is Vendor Finance? A Smarter Way to Support Business Growth

    Vendor finance is a structured funding solution that allows suppliers to offer customers flexible payment terms, backed by a third-party finance provider. Instead of the supplier waiting months to be […]

    What is Key Person Cover?

    What is Key Person Cover? A business protection policy that provides a financial safety net if a critical member of staff dies, is diagnosed with a critical illness or unable […]