VAT and tax funding
A big VAT or Corporation Tax bill landing in one lump can wipe out the cash you need to actually run the business. Tax funding spreads it over manageable monthly payments instead, so the money keeps working for you. We introduce limited companies and LLPs to a panel of lenders, and we'll always point you to HMRC's own Time to Pay option too so you can compare for yourself.
By the CapExpand Team, led by Alex Beardsley
·Updated June 2026
3-12 mths
Spread the bill
24-48 hrs
Typical decision
Ltd & LLP
Who we help
No fee
You never pay us
A known tax bill, spread over a few manageable months.The short version
Tax funding can make sense when keeping your cash in the business is worth more than the cost of spreading the bill, or when it saves you from HMRC late penalties. It is not free, so it is not automatically the right choice. It is always worth checking whether HMRC will let you spread the bill directly first. We don't give advice, but we'll run both numbers so you can see which works out cheaper for you.
What it is
Tax funding is a short-term facility that pays your tax bill so you can repay it in instalments. Instead of a single quarterly VAT hit or a chunky Corporation Tax payment draining the account, you keep the cash working and pay the lender back over a few months. It is one of the simplest products we place, because the amount and the deadline are both known.
What it can cover
VAT
The quarterly one that always seems to arrive at the worst moment. The most commonly funded bill.
Corporation Tax
Spread the annual bill rather than letting it swallow a month of cash flow.
PAYE
Smooth out payroll-related liabilities when timing is tight.
Large one-off bills
Some lenders will fund other big business bills on the same spread-it-out basis.
Why businesses use it
The point is keeping cash in the business. A wholesaler we worked with would see their VAT bill land the same week as a big stock order, every quarter. Funding the VAT meant they could place the order and pay HMRC over the following months rather than choosing between the two. That is the typical case: a healthy business with lumpy timing, not a business in trouble.
The HMRC alternative
Before you borrow, it is worth knowing HMRC offers a Time to Pay arrangement that can let you spread a bill directly, sometimes more cheaply than a loan. It is not always available and it can affect how HMRC views you, but for some businesses it is the better route. We would rather point you there than sell you funding you do not need.
A note on who we take on
We currently work with UK limited companies and LLPs only, on a non-regulated basis. We are not authorised by the Financial Conduct Authority, and we are not tax advisers, so speak to your accountant about the bill itself.
How it works
Tell us about the bill
Which tax, how much, and when it is due, plus a bit about your turnover. Two minutes on the form or a call.
We match you to lenders
We put it to the lenders on our panel who fund tax bills, and check the HMRC route too.
You see the real cost
We show you the cost of funding against paying directly, so you can make the call.
Bill settled, you repay monthly
The facility clears the bill and you repay over the agreed short term. No nasty surprise from HMRC.
Common questions
What is VAT or tax funding?▼
A short-term loan that lets you spread a tax bill over monthly payments instead of paying it in one lump. The funding can settle a VAT return, a Corporation Tax bill, a PAYE liability or a large one-off bill, so your working capital stays in the business rather than going to HMRC all at once.
What tax bills can be funded?▼
Most commonly quarterly VAT, annual Corporation Tax, and PAYE. Some lenders also fund other large business bills. The facility is usually short, often spread over three, six, ten or twelve months, matched to the size of the bill and your cash flow.
How quickly can it be arranged?▼
Tax funding is usually one of the faster facilities, because the amount is known and the purpose is clear. For a clean limited company, a decision often comes back within a day or two, in good time before the bill is due, provided you do not leave it to the last minute.
Is it cheaper than just paying the bill?▼
No, there is a cost to spreading it, that is the trade-off. The question is whether keeping your cash working in the business is worth more than the cost of the funding, and whether it beats the interest and penalties HMRC would charge on a late payment. We will lay out the numbers so you can judge.
What if I am already late or HMRC is chasing me?▼
Funding can sometimes clear an overdue bill, but speak to HMRC too. They offer a Time to Pay arrangement that may let you spread the bill directly, sometimes at a lower cost than borrowing. We will point you that way if it looks like the better route for you, because the honest answer is not always to borrow.
Will it affect future borrowing?▼
A tax facility is normal business borrowing and is assessed like any other. Used sensibly and repaid on time, it does no harm and shows you manage cash flow proactively. Stacking it on top of stretched borrowing is where to be careful, and we will flag that if we see it.
Is tax funding FCA regulated?▼
Lending to a limited company or LLP to fund a business tax bill is generally not regulated as consumer credit. CapExpand only introduces limited companies and LLPs on a non-regulated basis and is not an FCA-authorised firm. We are not tax advisers, so speak to your accountant about the bill itself.
Does CapExpand lend the money?▼
No. We are not a lender. We introduce UK limited companies and LLPs to a panel of lenders and help you compare the cost of funding against paying the bill directly. The lender pays us a commission if a facility completes, never you.
Sources
- GOV.UK, if you cannot pay your tax bill on time (Time to Pay)
- GOV.UK, VAT payment deadlines
- GOV.UK, Corporation Tax
- FCA, consumer credit and business lending
Important information
CapExpand Ltd is not authorised by the Financial Conduct Authority and can only complete non-regulated introductions. We work with UK limited companies and LLPs only, for business purposes. We are not a lender and we do not provide financial, tax or legal advice. We work with a panel of lenders whose particulars are available on request, and we receive commission from the lender if a facility completes, at no cost to you. All funding is subject to status and the lender's own checks.
Tax bill due and cash tight?
Tell us the bill and the deadline, and we'll show you the cost of spreading it against paying it now. Free to use, no obligation.