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Keeping on top of your business tax

Published on 28th November 2018 - Last update on 3rd December 2018

Are you prepared for your next tax bill? At the end of every tax year, businesses across the UK are required to pay corporation tax to HMRC or face receiving a penalty. Yet, despite being a vital responsibility, many business owners still find themselves struggling to keep up with this demand for various reasons. But there is a solution. Rather than defaulting with HMRC and potentially ending up in a worse financial situation, there is a specialised business finance solution that you can turn to. Designed to help business owners by supporting their finances and enabling them to settle tax obligations on time, you could gain access to a variety of funding products to support your corporation tax bill and stay on top of your business’ tax liabilities with Tax Finance.

Why should I apply for Business Tax Finance?

Despite being a prerequisite of running a business in the UK, corporation tax is still a contentious area. Although you may be able to predict it’s arrival and how much HMRC may demand, balancing the sums owed against your other financial commitments could leave your finances stretched too thin. As such, paying the demand could render you unable to invest in vital growth projects or tend to key areas. Yet rather than let your business suffer, you could raise the funds that you require by applying for Business Tax Finance. With some products able to provide you with an agreement in as little as 48 hours (depending on the complexity of your request), all you need to do is source the most suitable product for your business.

Upcoming business tax demand? Need help raising additional capital? Apply for Business Tax Finance or learn more about how your business could benefit.

How can I finance a business tax demand?

Receiving a corporation tax bill when you’re not fully prepared can be a major concern for any business owner. However, if you lack the necessary capital, know that you don’t need to handle it alone. By applying for Business Tax Finance, you could receive the funds you need and spread out the expense across an agreed term, easing the pressure upon your finances.

That’s because Business Tax Finance offers the flexibility and reassurance of being able to apply for products such as Invoice Factoring, Overdraft Replacement, Merchant Cash Advance and Asset Refinance.

Invoice Factoring

One way of raising capital for corporation tax demands is through Invoice Factoring, which is a secured form of short-term asset-based lending (ABL). If you’re waiting on any unpaid business-to-business (B2B) invoice worth in excess of £5,000, you could release up to 90% of the capital in question. In order to qualify, you must maintain up-to-date business ledgers and have effective credit control procedures in place. However, Factoring does give you the option of allowing the lender to pursue the debtor (your customer) on your behalf, saving you time. Plus, once the debtor has fully repaid your business, the lender will then release a balance consisting of the remaining amount of the invoice (e.g. 10%) minus their costs and fees.

Overdraft Replacement

On the other hand, you could utilise your business’ past income by applying for an Overdraft Replacement facility, which can be arranged as either a secured or unsecured facility. Offering you a Line-of-Credit (LOC), Overdraft Replacement gives businesses access to an allowance with a credit limit based upon your past income. You’re under no obligation to make use of these funds and are only charged interest on what you draw down. However, you have to 30 or 90 days (depending on the agreement) to repay anything you’ve borrowed and if you exceed your allowance limit you’ll be charged an overdraft penalty. Yet, once the agreement has been repaid, you’ll regain access to the allowance and be able to withdraw and repay funds on a revolving cycle - much like a credit card facility.

Merchant Cash Advance

If, however, you’re looking for an unsecured option to support your business tax demands, you could benefit from using a Merchant Cash Advance agreement. Merchant Cash Advance provides you with an advance based upon your business’ card-based sales so in order to qualify you must be able to accept credit and debit card payments. As such, lenders will request at least 3 or more of your business’ latest consecutive sales reports. This enables them to calculate your average card-based revenue, which forms this basis of the advance. So if you regularly earn around £25,000 in card sales, you could receive an advance up to the same amount, if required. Plus, Merchant Cash Advance also enables you the makes flexible monthly repayments. This involves allowing lenders to enter an agreement with your card processing provider and intercept an agreed percentage (sweep rate) from each of your card-based sales as you receive them until the product has been fully repaid.

Asset Refinance

Finally, if you own any unencumbered assets such as equipment, machinery or vehicles that aren’t fixed into the structure of your premises, you could release up to 100% of the equity held within one or more of them to generate a lump sum. Although this involves transferring ownership of the concerned assets to the lender temporarily, you’ll still have access to them all the same, as long as you keep up with the repayment scheme. Offering terms lasting up to 5 years, Asset Refinance requires you make fixed monthly repayments plus interest until the agreement has matured. Once has this has been reached with all relevant payment met, ownership of the asset(s) is restored to your business.

Need help supporting your business’ tax liabilities?

Although corporation tax is an inevitable part of running a business, it doesn’t make it any easier to manage. Yet when the time comes and payment is due, you might be unable to afford the demand without depriving other key areas of your business, or may not wish to deplete your capital reserves to such an extent. But there is another way of overcoming this challenge without having to remove large amounts of capital from your business in one go. Thanks to the Alternative Finance Industry you now have access to a variety of finance solutions that could help you stay on top of your tax affairs. All you need to do is source an agreement that’s suitable for your business - which is where we can help.

At Rangewell, we’re an Access to Finance specialist who searches over 350 lenders to offer you an overview of more than 23,000 business finance products. Our services are free to use for SME owners and their advisors and we’ll also guide you through the application process. So if you’re need help keeping up with your tax liabilities, apply for Business Tax Finance today or find out more with Rangewell.


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David Harrison

David Harrison

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