Corporation Tax, VAT and PAYE all fall due on dates that have nothing to do with when your customers pay you. A large quarterly VAT bill or an annual Corporation Tax payment can collide with a quiet trading month and create a sudden squeeze, even for a profitable company.
Why this gap is common
VAT in particular can catch businesses out because you collect it on sales but may have already spent the underlying cash before the bill lands. If your customers are slow to pay, you can owe VAT on invoices you have not yet been paid for.
How a facility helps
- Lets you meet the deadline on time and avoid interest and penalties from HMRC.
- Spreads the impact of a lumpy tax bill across your agreed term.
- Protects your relationship with HMRC, which matters for future flexibility.
Plan tax as a known cost
Tax bills are predictable. The most resilient approach is to set money aside as you trade, but where a timing gap still appears, short-term finance can bridge it. You repay over your agreed term at the rate shown in your offer. If you are already struggling, also speak to HMRC about a Time to Pay arrangement.
Credicorp lends only to UK limited companies and LLPs for business purposes. We do not lend to individuals or sole traders and take no personal guarantees from directors. As an exempt lender we are outside the FCA consumer-credit regime, so the Financial Ombudsman Service and FSCS do not apply.
See also: Bridging the gap between one contract ending and the next starting, Can a facility replace an unreliable business overdraft? and Can business finance help bridge a short-term cashflow gap?.