What are Corporation Tax Loans?
All limited companies are obliged to file accounts and pay corporation tax liabilities to HMRC within 9 months of their year end date.
Failure to file or pay tax on time can lead to penalties and fees. Overdue tax accrues interest as well as putting businesses on HMRC’s radar – far better then to ensure all corporation tax liabilities are paid on time
Due to seasonal variations in turnover, unexpected events, late payments from clients and other cashflow pressures, many businesses can find the large annual corporation tax payment a particularly fraught period as they find themselves “robbing Peter to pay Paul” to ensure they can make their payment to HMRC and avoid the dreaded late payment penalties and interest.
Even if they manage to make the payment in time there is often a knock on effect on working capital elsewhere and the merry-go-round continues once again.
We have worked with many Managing and Finance Directors of successful firms who have approached us, utterly drained by the whole exercise and wishing there were a better solution available to them.
Hence the Corporation Tax loan was created.
Corporation Tax Loans are an innovative, rapidly growing and extremely popular form of short term business funding that can sit perfectly alongside companies other business funding tools.
In its simplest form, a Corporation Tax loan is a three to twelve month term loan designed to be used by businesses to settle their annual corporation tax bill payments to HMRC on time, and allowing them the benefit of the additional cashflow headroom.
Corporation Tax Loans can be offered to firms with a minimum liability due of £10,000 with no maximum limit. They run for three to twelve months to fit with your own cashflow requirements and rates start from around 1.25% per month, subject to underwriting and size of loan required.
Corporation Tax loans can often be unsecured, but when not, a director’s personal guarantee is the only security required.
Contact Our Tax Loans Team
The Benefits of Corporation Tax Loans
Corporation Tax Loans offers many benefits to UK businesses, including:
Cashflow Benefits – Without sufficient cash reserves, every business will eventually fail. Corporation Tax Loans provide an extra stream of funding that can be used in addition to bank overdraft or invoice finance facilities, without impacting on these existing facilities. This added stream can even out cashflow peaks and troughs. Not only that but the extra working capital available can be used to reduce costs elsewhere, and is available for other business growth or investment needs.
Cost Saving Benefits – Some businesses have found themselves in the painful position of incurring Corporation Tax late payment penalties (surcharges) from HMRC even when filing their payments a day or so late. Interest is charged by HMRC on late payments. When a business is in this position it can be very hard to break the cycle. By ensuring Corporation Tax is paid on time, every time, businesses can see an immediate reduction in costs, and other businesses can rest assured that they won’t find themselves running the risk of being in this position.
HMRC Relationship Benefits – having a great relationship with HMRC is very helpful if and when Corporation Tax and other tax inspections are undertaken. By ensuring that Corporation Tax is paid on time HMRC can build a picture of a properly managed and well run company that settles its affairs in a timely manner.
Peace of Mind Benefits – with so many things pulling at the focus of a business owner there is alot to be said for having order and structure in place in as many business areas as possible. By ensuring that a Corporation Tax loan facility is always in place a business owner has one less thing to worry about and can be confident that their Corporation Tax will be paid on time, costs are more evenly spread and cashflow is being maximised.
Security Benefits – most forms of lending require some form of security offered by the borrower to the lender. Overdrafts, for example, will typically require the business to offer a debenture over all business assets to their bank. Sometimes this can extend to charges over directors’ homes. Security in Corporation Tax Loans, on the other hand, is often offered entirely unsecured and where security is required it is only in the form of an unsupported directors personal guarantee, meaning no charges against any property are sought or requested. Most business owners, confident in their business trading for the next year, have no concern about offering guarantees in these short term circumstances.
Secure your Corporation Tax Loan with one of the UK’s leading brokers
MacManus Asset Finance is a leading independent UK corporation tax loan brokerage, trading since 2005. We’ve helped hundreds of British firms access competitive Corporation Tax loan facilities to assist their cashflow management via our huge panel of finance providers. We’re authorised and regulated by the Financial Conduct Authority.
How to apply for a Corporation Tax Loan with MacManus Finance
We make your Corporation Tax loan journey as simple as possible.
- From your first call, email or completed webform we will act as your trusted partner, understanding your objectives and putting together options for you to consider.
- We may need to ask you some general business questions and ask for some financial information from you in order to carefully prepare your personalised quotation from our funding panel.
- Once you have reviewed your no obligation quotations and are happy to proceed we will prepare your application and liaise with the lenders to secure the funding you need.
- Unlike some brokerages, we do not charge you any payments or fees for our brokerage service, so your engagement with us is entirely cost, risk and obligation free.
- From here we ensure everything is finally packaged and presented to the finance company who will activate your agreement and pay HMRC directly, or, subject to approval, to you, allowing you to enjoy the peace of mind that you wont incur any late payment surcharges and have the added benefit of the additional working capital.
Why choose MacManus Finance for Corporation Tax Loans?
UK firms are well advised to engage the service of a skilled independent brokerage who can save them time and money by accessing the widest panel of options, who are Authorised and Regulated by the Financial Conduct Authority which requires firms to demonstrate the highest standards of integrity and submit to consistent monitoring of activities, providing the business owner with confidence in the firm they have chosen to work with.
MacManus Asset Finance are one such firm – directly authorised by the Financial Conduct Authority, and with a customer base of almost 300 UK businesses whom we have supported for over 15 years.
This credibility combined with an extensive panel of finance providers, including some of the best priced, and most flexible lenders in the marketplace provides a winning combination.
Our business motto is “Never Just a Number” – and we take pride that our clients never feel like they are just a number to us, as so many business owners are made to feel by larger financial institutions.
Your business success is our business success, we never take our clients for granted, and will always aim to deliver more than our clients expect.
Frequently Asked Questions
Corporation Tax Loan are available for periods ranging from 3 to 12 months allowing the business owner the flexibility to choose a term that suits their budgeting needs.
We will always deliver the best rate of finance possible based on your specific circumstances.
Our extensive funding panel means we can help businesses in every situation, as such every client will receive bespoke pricing based on their credit worthiness, market conditions and industry appetite that varies from time to time.
Our rates, for the best clients, are market leading and you should have no hesitation in contacting us if price is your motivator.
We are super quick. We will provide you with indicative terms within 5 minutes of a conversation.
When you ask us to proceed to application, we will request some financial and business information from you to support the application.
Once received your application will be sent to the finance providers within 60 minutes.
Funders have varying service times from 1 hour to 5 days, but most are around 3 days for a decision.
Once agreed we let you know and can ensure we pay HMRC in good time.
Yes, yes, yes.
Most of our clients use the facility every year and it becomes an additional cashflow tool that they can rely on.
We keep in close contact with you to ensure we approach the funders at the right time to request approval of each years Corporation Tax loan.
Provided a good payment history is maintained it is usually straight forward to get the new facility agreed.
We have active lines with dozens of providers, including most high street bank and most of the major asset finance providers plus a number of niche players.
We haven’t been asked to fund an asset that we weren’t able to place somewhere.
Nothing. Zero. Not a penny!
For asset finance business we do not charge our clients any fees at all. We are paid commission by the finance providers for successfully placing business with them, and we only get paid if we deliver a finance solution that you are happy with.
As a result we ask all clients to engage with us on the basis of good faith, in that, if we are asked to secure funding and do indeed deliver what we promised, that our clients complete the transaction with us.
Our minimum Corporation Tax loan amount is £10,000 however we have no maximum limit.
Each application is considered on its own merits.
Types of Corporation Tax Loan we offer
The two options are Full Corporation Tax Loan and Partial Corporation Tax Loan
Full Corporation Tax Loan
- A three to twelve month Corporation Tax loan is sought to cover the exact, to the penny, Corporation Tax liability of a business.
- A copy of the completed Corporation Tax return is provided to the funder and once agreed the finance documents are prepared for the precise amount.
- Funds can be paid to HMRC directly, or to the business, for onward payment to HMRC, subject to lender approval.
- Or the business can pay HMRC directly in full in the first instance and then have the Corporation Tax payment refinanced a day or so later, subject to proof of payment from the business to HMRC being received by the funder.
- The business then repays the loan plus interest in three to twelve monthly installments to fit in with the business’ budgeting needs.
Partial Corporation Tax Loan
- Sometimes businesses may only want to fund a part of their Corporation Tax liability and don’t require funding for the full amount – the partial Corporation Tax Loan is perfect for this situation.
- The underwriting process is exactly the same as for the full Corporation Tax Loan however a specific amount is requested, rather than the full Corporation Tax liability.
- As only some of the Corporation Tax will be funded by the finance company, the business customer must ensure that the balance is paid to HMRC by the deadline to avoid incurring any surcharges.
- This option still provides the bulk of cashflow benefit to the business customer and ensures no surcharges are incurred, whilst reducing the overall interest cost.
MacManus Asset Finance Ltd Registered Office: Britannia House, Cerphilly Business Park, Caerphilly, CF83 3GG. Company Registration Number: 5785432 MacManus Asset Finance Ltd is Authorised and Regulated by the Financial Conduct Authority. Firm Number 821663. MacManus Asset Finance Ltd is an independent asset finance brokerage not a lender, as such we can introduce you to a wide range of finance providers depending on your requirements and circumstances. We are not independent financial advisors and so are unable to provide you with independent financial advice. MacManus Asset Finance Ltd may receive payments(s) or other benefit from the finance provider if you decide to enter into an agreement with them.