Pay HMRC, keep trading
HMRC tax bill loans
Pay HMRC in full and repay a lender over a term that suits your cash flow. Worth comparing against HMRC's own Time to Pay arrangement first.
HMRC Tax Bill Loans at a glance
- Amount
- Within our £1,000 to £1,000,000 unsecured range
- Term
- Up to 60 months
- Security
- Often unsecured. A personal guarantee is standard.
- Time to funding
- Usually a little longer than a standard unsecured loan, because fewer lenders fund tax bills and some will want to see your HMRC position.
- Typical use
- A VAT bill, a corporation tax bill, PAYE and National Insurance arrears, a self assessment payment, or clearing an existing Time to Pay arrangement
- What you'll need
- Your HMRC statement or the bill itself, your Companies House number or trading details, photo ID, and recent bank statements
What it is
What is an HMRC tax bill loan?
An HMRC tax bill loan is a business loan used specifically to pay a tax liability: VAT, corporation tax, PAYE and National Insurance, or a self assessment bill. You pay HMRC in full and repay the lender over an agreed term. The cost does not disappear; it moves from HMRC to a commercial lender with a fixed repayment you can plan around.
Businesses do it to stop late payment interest and penalties building up, to pay a large bill without draining working capital, or to spread a seasonal tax bill such as a quarterly VAT return. Not every lender funds tax bills, and some exclude tax arrears outright, which is why this deal is worth broking rather than applying blind.
HMRC also offers Time to Pay, an instalment arrangement agreed directly with HMRC. For some businesses that is the cheaper and simpler route, so look at it first.
Worked example
A worked example
- A haulage company has an £80,000 VAT and PAYE bill due and does not want to empty its working capital to pay it.
- HMRC charges late payment interest on tax paid late, and penalties can apply on top. The rate is set by HMRC and changes, so check the current position on GOV.UK.
- The business borrows £80,000 over 24 months and pays HMRC in full and on time.
- The comparison to make is that total against the cost of a Time to Pay arrangement, or of paying late.
Your accountant should run both numbers: the loan and Time to Pay, including any tax deductibility of the interest.
Is this right for you?
Is an HMRC tax bill loan right for you?
Good fit if…
- You have a VAT, corporation tax, PAYE or self assessment bill you cannot comfortably pay in one go.
- Your returns are filed, or you have a clear plan to file them.
- Paying the bill from working capital would leave you short for wages, stock or suppliers.
- HMRC Time to Pay is not available to you, or does not give you enough time.
Probably not if…
- The business is not viable and the tax bill is a symptom. Borrowing extends the timeline, it does not fix it. Speak to a licensed insolvency practitioner instead.
- You are well behind on filing returns with no plan. Most lenders want filings current even when payment is not.
- HMRC will agree a Time to Pay arrangement that suits you and costs less than a lender would charge.
- You would be borrowing to pay every VAT bill, every quarter. That is a pricing or a margin problem, not a finance problem.
- You have not spoken to your accountant. This is one decision that should never be made without them.
What it costs
What an HMRC tax bill loan costs
Most lenders treat tax bills as a higher-risk use of funds and price them that way. Compare the cost against Time to Pay and against HMRC's late payment interest, not against a standard business loan.
- Interest rate
- Rates are set by the lender for your deal, not by us, and depend on your trading, your credit file and the product. Tax bill funding usually prices above a standard unsecured loan because the panel is smaller and the use of funds is considered higher risk.
- Arrangement fee
- A one-off fee, often deducted from the advance, so borrow enough to cover the HMRC balance after the fee comes out.
- Ongoing fees
- Some lenders charge a monthly account fee.
- Paying it out early
- Ask before you sign. If the business recovers faster than expected, an interest rebate on early settlement is worth real money. Not every lender offers one.
Bizzloans is a commercial finance broker, not a lender. The lender that funds your deal pays us a commission, which we disclose to you. You pay us nothing to compare.
Eligibility
Who can apply
- A UK business: limited company, LLP, partnership or sole trader
- Photo ID (passport or driving licence) for each director, partner or owner
- Bad credit considered
- Tax returns filed, or a clear plan to file them
Don’t meet these? Talk to us. We have lenders for most situations, and we’ll tell you straight if we don’t.
Contact usWhat you'll need
What you’ll need
No documents
To get a quote
- Nothing. Tell us the amount owing, which tax it relates to, when it is due, and whether your returns are filed.
- No credit file is pulled to compare.
Once you pick a lender
To settle
- Your HMRC statement, the bill, or a screenshot from your HMRC online account showing the balance
- Recent business bank statements
- Your Companies House number, and photo ID and proof of address for each director
- Details of any existing Time to Pay arrangement
- Loan agreement, personal guarantee and direct debit mandate
How it works
How it works
A few minutes
Tell us the bill and the position
How much is owed, which tax it is, whether it is due or already overdue, whether there is a Time to Pay arrangement, and whether returns are filed. All of these change which lenders will fund it.
Once your details are in
We go to lenders that fund tax bills
Not all of them do. Applying blind to a lender that excludes tax bills as a use of funds wastes time and leaves a search on your file. We only approach the ones that fund it.
Once approved
Pay HMRC, repay the lender
Funds are advanced so the liability can be paid in full, and you repay the lender monthly over the agreed term. Keep HMRC's confirmation of payment.
This vs the alternative
Tax bill loan vs HMRC Time to Pay
Both spread the cost. They work differently, and Time to Pay is worth asking HMRC about first.
| Tax bill loan | HMRC Time to Pay | |
|---|---|---|
| Who you owe | A commercial lender. HMRC is paid in full. | HMRC, in agreed instalments. |
| What it costs | A commercial interest rate plus fees, fixed and known at the start. | HMRC's interest on the unpaid tax, at a rate HMRC sets. |
| How you get it | Apply to a lender through us. | Agree it directly with HMRC, online for some smaller debts or by phone. |
| Flexibility | Fixed term, fixed repayment. | Set by HMRC. Missing payments can end the arrangement. |
| Best for | A viable business that wants the bill paid now, or cannot get the terms it needs from HMRC. | A business HMRC is willing to give time to, on terms it can meet. |
General information only. Check Time to Pay eligibility on GOV.UK or with HMRC, and ask your accountant to compare the two before you decide.
What to do before you apply
- Check your HMRC online account so you have the exact balance, not an estimate.
- File any outstanding returns, even if you cannot pay yet. Most lenders accept an unpaid but filed position; very few accept unfiled.
- Look at HMRC Time to Pay first and ask your accountant to compare it with the cost of a loan.
- If PAYE and National Insurance are part of the balance, say so. Lenders and HMRC both treat payroll taxes seriously.
FAQ
HMRC Tax Bill Loans questions
Will HMRC know I borrowed to pay them?
What is HMRC Time to Pay?
Is a loan cheaper than Time to Pay?
Which taxes can I fund?
Do I need to be up to date with my returns?
What if I already have a Time to Pay arrangement?
Do all lenders fund tax bills?
What if my business is not viable?
A person reads this, not a scoring engine
A named advisor takes your file to the lenders on the panel that fund your industry and your turnover, and tells you plainly when an HMRC tax bill loan is the wrong answer and what to use instead.
Ready when you are
Compare HMRC Tax Bill Loans today
Comparing is free, you’re never locked in, and checking won’t affect your credit score. If we can’t help, we’ll tell you that too.
