When it comes to keeping your business growing, it’s all about the cashflow.
You can have the best quarter, or even year, but outgoing payments such as VAT and Corporation Tax can leave your cashflow looking a little worse for wear.
Many businesses, and their accountants, believe that they have to pay their HMRC bill in one lump sum. However, there is a solution that allows you to spread the cost over 3, 6 or 12 months, keeping cash in the business.
VAT Funding, Corporation Tax Funding and Self Assessment Tax Funding all allow you to spread the cost and keep your cashflow looking healthy.
How does it work?
Essentially, this is a completely separate line of credit, usually unsecured, giving your business additional headroom within which to operate.
The best thing about VAT and Corporation Tax funding is that we do all the work for you! You simply let us know how much your VAT bill is and we sort the rest. The lenders we work with settle your VAT or Corporation Tax directly with HMRC – you then repay the lender on a monthly basis.
VAT Loans are renewable each quarter and payable over three months; Corporation Tax Loans can be for up to 12 months. The difference these cashflow solutions can make to the everyday position of a business are, as you can imagine, quite significant.
The benefits of tax funding in a nutshell:
- It’s quick and simple to arrange.
- The rates are competitive.
- Unsecured under £150K
- It takes pressure off your cash reserves.
- You can retain working capital to spend in other business areas.
- Fixed monthly repayments ease cashflow peaks and troughs.
- You are not tied into a long-term contract.
But if I’ve got the cash to pay it in one go, why should I spread the cost?
Many businesses we’ve spoken to have asked us why they should spread the cost if they have the money to pay the bill. Ultimately the choice is up to you, but spreading the cost allows you to keep your money in the business and support your growth plans.
Say, for example, your VAT Bill is £100k. Spreading that cost means that you can utilise your money in other ways, such as helping with ongoing projects, and to help boost profits – more than offsetting the cost of funding in the first place.
The benefits of working with ABL
ABL have been appointed one of 5 finance intermediaries across the country to offer preferential rates for VAT, Corporation Tax and Self Assessment Tax funding.
Rates are important when it comes to financing a regular bill like VAT and many brokers within the industry have their own pricing structures which can often work out expensive.
If you would like to discuss your VAT or Corporation Tax bill you can get in touch via email, or check out our team page to find the nearest ABL location to you.
If you want to find out further information about this topic you can get in touch with the ABL team via email or call the office on 01274 965356 to talk through your options.