Corporation Tax Loans – How They Work

Corporation tax is a liability every limited company in the UK must pay, and HMRC expects it to be paid on time. Changes to corporation tax rates in the 2023/24 tax year have introduced different tax rates based on profits: businesses with profits under £50,000 pay 19%, while those with larger profits are taxed at 25%. Paying your corporation tax bill on time is crucial, but it can be challenging for businesses, especially when the amount is large. Fortunately, corporation tax loans provide a solution to help spread the cost of paying your tax bill, typically over 6 to 12 months.

What is a Corporation Tax Loan?

A corporation tax loan is a business loan designed to help you pay your corporation tax bill when it is due, by spreading the payments over a longer, more manageable period. As HMRC requires corporation tax to be paid in a lump sum, many businesses find it difficult to manage without straining their cash flow. These loans are quick to secure, with approval typically granted within 24 hours and payment made directly to HMRC within 48 hours. This makes them an excellent option for alleviating the pressure of owing money to HMRC, with minimal delay or worry.

How Does a Corporation Tax Loan Work?

Corporation tax loans are typically unsecured, meaning they are not tied to any business assets as collateral. This provides peace of mind that there is no risk of repossession if you face difficulties in repaying the loan. However, as unsecured loans, your eligibility for a corporation tax loan will depend on your business's financial health and credit rating. A strong credit rating can help secure the loan, but even if your credit score is not perfect, Business Loans Compare works with a range of lenders who may be able to help. If your business credit history is not sufficient to qualify for the loan, a personal guarantee from one or more directors may be required. Loan terms, including interest rates, may be adjusted to account for the additional risk. With a wide network of potential lenders, securing a corporation tax loan for any solvent UK limited company is typically possible.

Eligibility Requirements:

• Trading for more than 12 months
• UK limited company
• HMRC corporation tax bill

At Business Loans Compare, we pride ourselves on offering responsive, high-quality service to meet your needs.