How Does HMRC & VAT Funding Work?
Tax bill finance allows your business to borrow the amount needed to settle an HMRC liability — whether that is a VAT bill, corporation tax, or another obligation. The lender pays HMRC on your behalf (or provides funds for you to pay), and you repay the lender in fixed monthly instalments over an agreed term.
As a credit broker, not a lender, Balanced Funding Solutions searches across our panel of UK lenders to find the most competitive terms for your situation. Arranging finance to pay your tax bill on time is almost always cheaper than the penalties and interest HMRC charges for late payment.
“A tax bill does not always land at a convenient time. Quarterly VAT payments or an annual corporation tax bill can put real pressure on a business that is otherwise trading well. Tax funding takes the sting out of it and lets the business keep moving.”
Types of HMRC & VAT Funding
There are several ways to finance your HMRC liabilities. The right option depends on the type of tax, the amount, and how quickly you need the funds.
Finance specifically for quarterly VAT bills. Pay HMRC on time, then spread the cost over the following months. Some facilities can be set up as a revolving arrangement to cover each quarter automatically.
A loan to cover your annual corporation tax bill, spreading the cost over 3 to 12 months. Avoids the cash flow impact of a large lump-sum payment and the risk of HMRC penalties for late payment.
Finance to cover PAYE and national insurance liabilities, particularly useful for businesses with large seasonal workforces or those experiencing temporary cash flow pressure.
An alternative to HMRC's own Time to Pay arrangement. Private tax funding can often be arranged faster, with more certainty, and without the ongoing HMRC scrutiny that a Time to Pay arrangement involves.
Quick Comparison
A side-by-side look at how the main options compare on the factors that matter most.
| Feature | VAT Funding | Corporation Tax | PAYE & NIC | TTP Alternative |
|---|---|---|---|---|
| Typical term | 3-9 months | 3-12 months | 3-6 months | 3-12 months |
| Revolving facility? | Yes (some) | No | No | No |
| Speed of setup | Days | Days | Days | Days |
| HMRC involvement | None | None | None | None |
| Security required? | Usually unsecured | Usually unsecured | Usually unsecured | Varies |
| Best for | Quarterly VAT bills | Annual CT bill | Payroll obligations | Replacing HMRC TTP |
VAT Funding
Corporation Tax
PAYE & NIC
TTP Alternative
Who Can Apply?
HMRC and VAT funding is available to a wide range of UK businesses. While each lender has its own criteria, the general requirements are:
- UK-registered business (limited company, LLP, sole trader, or partnership)
- Up-to-date HMRC filings (VAT returns, CT returns, PAYE submissions)
- The tax liability is a known, quantifiable amount
- Satisfactory credit profile for the business and/or directors
- Typically at least 12 months of trading history
Even if you have an outstanding dispute with HMRC or are behind on filings, speak to us. We may still be able to help, or we can advise on the best course of action to get your situation resolved.
“The cost of HMRC late payment interest and penalties adds up fast. In almost every case, arranging private finance to pay the bill on time works out cheaper. It also keeps your HMRC record clean, which matters for future compliance.”
How It Works
Arranging HMRC and VAT funding through Balanced Funding Solutions is straightforward. Here is what to expect at each stage.
Get in Touch
Tell us how much you need and what the finance is for. Online form, phone, or email.
We Search
We compare options across our lender panel for your budget and credit profile.
Your Options
Full transparency on rates, terms, and fees — no obligation to proceed.
Completion
We handle the paperwork. Funds typically released within 24–48 hours.
HMRC & VAT Finance Calculator
Estimate the monthly cost of spreading your tax bill. Adjust the figures to match your liability.
For illustration purposes only. This calculator provides an estimate based on the figures you enter. Your actual rate will depend on your individual circumstances, credit profile, and the lender’s criteria. Balanced Funding Solutions is a credit broker, not a lender.
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Frequently Asked Questions
Get Your HMRC Finance Quote Today
No obligation, no impact on your credit score. Tell us what you need and we will do the rest.