Two things in life are certain – death and taxes. Whilst we can’t help with one, we can ease the pain of the other! Whilst during COVID, HMRC were fairly lenient with providing Time To Pay arrangements, we are hearing that this is no longer something they are being so flexible with. As an asset finance broker, most businesses are surprised at the scope of things we can fund and we expect many aren’t aware at all that we can also arrange funding for HMRC liabilities. Of course, this can be funded out of necessity but there are far more reasons to fund these unproductive costs.
We can arrange funding for VAT, corporation tax and self assessment tax bills above £10,000 as long as:
- The liability is current and not overdue
- You do not have a Time To Pay Arrangement with HMRC
The funding of these liabilities are by way of an unsecured loan and the terms available vary between 3 and 12 months depending on the type liability. Guarantees aren’t required up to £150,000 and whilst above this guarantees may be requested, no security is taken over property.
So why should you fund your HMRC liability?
In an ideal world, you don’t want to rely on this as a method of paying your tax bills, and instead it should be used to accelerate growth in your business, which cashflow is an integral part of. By not having your cash tied up in an HMRC bill it can work far harder for you in the following ways:
- In a high interest savings account
- Paying for another sales person
- Purchase of raw materials in bulk at better rates
- Investing in staff training and development
- Used to pay for a marketing campaign
Whilst of course there is an interest element to the funding, this is often far outweighed by the return that the capital not tied up can provide. It’s also worth bearing in mind that the interest on the payments is fully tax deductible.
Here are some commonly asked questions which you may find useful:
Do the funds get sent to us?
The funds get sent directly to HMRC using your reference.
What if I’ve already paid HMRC?
As long as you have paid the liability early, then this can be reimbursed to you within a certain time frame.
Do I have to fund the whole liability?
You can opt to fund just part of the liability, we would just require proof of payment to HMRC for the balance of the liability.
How long is required to complete the application?
A minimum of 5 working days is required to complete the application.
Is there an arrangement fee?
No there is no arrangement fee.
The below document may also be useful for you to keep hold of:
If you are interested in finding out more about funding your HMRC liabilities, give us a call – all we need to provide an illustration is your expected liability amount. At Focus we always aim to make the application as straight forward as possible, whilst providing competitive pricing.