VAT & Corporation
Tax Funding
What is tax funding?
VAT and Corporation Tax funding allows businesses to spread tax liabilities over manageable monthly payments rather than paying in one lump sum.
This can prevent cashflow strain, with the added benefit of avoiding the need to enter a formal arrangement with HMRC.
Why do businesses use tax funding?
Tax bills often arrive at busy trading periods. Paying in full may restrict your working capital and limit flexibility.
- Funding can:
- Preserve cash reserves
- Protect your credit profile
- Avoid ‘Time To Pay’ arrangements
- Maintain borrowing strength for future funding
VAT and Corporation Tax funding gives you wiggle room without damaging your long-term finance prospects.
And, once you’re approved you can utilise this service year after year.
So, what’s required to get approval?
- Lenders will assess:
- Confirmation of the tax amount due
- Evidence of affordability
- Standard business financial information
Sole traders can only apply for VAT and income tax funding, whereas limited companies can apply for VAT and Corporation Tax funding.
Why Meridan Finance?
Tax funding is often time sensitive. Deadlines don’t move, and if you leave it too late it can limit your options massively.
Our priority is securing manageable repayment terms that protect your cashflow and support your wider plans. The right structure allows you to meet your HMRC obligations, while preserving working capital and maintaining borrowing strength for future funding.
Unlike entering into a formal ‘Time To Pay’ arrangement, tax funding through a lender
does not show as an obvious outstanding tax debt to HMRC. This can have a positive impact on how your business is viewed by lenders when you apply for additional finance, potentially supporting access to stronger rates and terms on other lending requirements.
Many businesses also choose to use tax funding as part of a structured annual plan rather than a last-minute solution.
If an upcoming tax bill is creating pressure, or you would rather plan ahead than react under stress, start the conversation with us today.