Yes, it’s inevitable that businesses have to meet their tax and VAT obligations, but it is a familiar feeling for business owners in January and April when there simply isn’t enough cash in the coffers to settle their tax bill.
But fear not, there are options available for business owners so that you can avoid those late payment penalties or the dreaded chaser letters dropping on your doormat.
Whatever your position, it’s important to meet these obligations on time or face HMRC penalties. Late payments can lead to anything from accelerated payment notices being issued, court summons and in some cases jeopardise the future of your business. Things can quickly spiral out of control so it’s best to avoid such issues and where necessary make use of the finance options available.
3 types of finance
There are a whole host of finance options available to help businesses honour their tax and VAT commitments on time. Here’s three ways you can borrow:
1. Working capital solutions
a) Rolling Credit Facility (a bit like an overdraft. You have a limit, you draw and repay as you wish and only pay for what you use).
b) Merchant Cash Advance – borrow against your card payments received.
2. Asset finance – free up cash/equity available in assets such as vehicles and machinery.
3. Business loans – borrow money over the short and long term with a structured repayment profile, either backed by tangible security or unsecured.
Let’s face it, HMRC don’t look too kindly on businesses who are late with their payments. With that in mind business owners must be on the front-foot and either maintain the necessary cash reserves or find a suitable borrowing option.
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BIZL Limited (company number 10838494, registered office 66 Prescot Street, London, E1 8NN) is authorised and regulated by the Financial Conduct Authority. Registered No: 784499. BIZL Limited is a credit broker of business finance, not a lender.