£237,946 across four facilities. Corporation tax spread, not taken in one hit.
An accountancy practice that spreads its corporation tax rather than taking a single large cash hit.
Corporation tax fundingRead the transaction
Tax funding
Corporation tax loans: spread your company's tax bill over monthly payments
Spread a large corporation tax bill into fixed monthly repayments. How the loans work, why profitable firms still run short of cash, and what lenders check.
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In short
What you need to know.
Yes, you can borrow to pay corporation tax.
A lender settles the bill, or funds you to settle it, and the company repays in fixed monthly instalments over a short term. Lenders mainly want a UK limited company with filed accounts, a clear tax computation and bank statements showing the repayments are affordable. Most loans are unsecured but need a director's personal guarantee.
A transaction we arranged
£3,371,432
£3.37m across seven facilities. Profitable on paper, and liquid when it mattered.
Payroll goes out every week, clients pay on terms and the tax bill lands in between. We arranged funding for the gap, seven times.
Read the transaction- Sector
- Recruitment business
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- Tax funding
- Outcome
- Repeat funding relationship
About corporation tax loans
Specialist knowledge. Better outcomes.
A corporation tax loan is a short-term business loan used to pay your company's corporation tax bill to HMRC in full and on time, then repaid to the lender in fixed monthly instalments. It is for UK limited companies that made a healthy profit but no longer have that profit sitting in the bank, because it has gone into stock, equipment, staff or debtors. Smart Funding Solutions approaches lenders that fund corporation tax, including specialist tax funders, and compares the terms for you.
Corporation tax loans sit within our wider HMRC loans range, alongside VAT and self-assessment funding.
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What is a corporation tax loan in the UK?
A corporation tax loan in the UK is a short-term business loan that pays your company's corporation tax to HMRC in full and on time, repaid in fixed monthly instalments, usually over 3 to 12 months. Smart Funding Solutions, a whole-of-market commercial finance broker, compares specialist tax lenders on its panel and arranges the loan that fits your bill and cash flow.
01
Who it suits
Profitable UK limited companies whose profit is tied up in stock, work in progress or growth, so the cash is not in the bank on the due date. It suits companies that would rather keep HMRC paid in full than rely on a Time to Pay arrangement.
02
Typical criteria
- A UK limited company with filed accounts and a tax computation from your accountant.
- Recent business bank statements that show the repayments are affordable.
- A director's personal guarantee on most products.
- Some lenders want no adverse credit and a minimum trading period; others accept existing HMRC arrangements.
03
What to watch
Compare the total cost with HMRC late payment interest, and make sure the loan finishes before next year's bill. For sole traders and partners, self assessment tax loans are the equivalent. Accountancy and law firms can read accountancy practice tax funding and law firm tax funding. To see which lenders match your bill, get instant corporation tax loan quotes with no credit check.
How a corporation tax loan works
- You share the billlenders want to see your corporation tax computation or HMRC liability.
- The lender assesses affordabilityit reviews your accounts, bank statements and credit history.
- The offer is signedif the lender approves, it issues a loan agreement and any director guarantee for signature.
- The tax is paiddepending on the lender, funds go to HMRC directly or to your business account to pay the bill.
- You repay monthlyfixed repayments over a short term agreed with the lender.
Some lenders will also refinance a corporation tax bill you have recently paid from your own cash, which can restore working capital. Lenders set time limits on this, so raise it early.
How do I pay my corporation tax bill in instalments?
Most companies must pay corporation tax in one payment, 9 months and 1 day after the year end. To spread it, either ask HMRC for a Time to Pay arrangement or use a corporation tax loan that pays HMRC in full while you repay monthly. Smart Funding Solutions, a whole-of-market commercial finance broker, arranges corporation tax loans from lenders on its panel.
Your options for spreading a corporation tax bill
- HMRC Time to Pay: HMRC checks the plan is affordable and expects the company to reduce the debt first, for example by releasing stock or vehicles, and may ask directors to put in personal funds or accept lending (GOV.UK: setting up a payment plan). Late payment interest is charged on the balance. Compare it with a loan on our Time to Pay or a tax loan page.
- A corporation tax loan: HMRC is paid on time and the company repays the lender in fixed monthly instalments, usually over 3 to 12 months.
- Quarterly instalment payments: these are a legal requirement for large companies, not an option for others. Companies with taxable profits over £1.5 million generally pay in quarterly instalments, with earlier dates for very large companies (GOV.UK: Corporation Tax paying in instalments).
- Plan ahead: setting aside a monthly amount into a tax savings account avoids the problem next year.
What to watch
Contact HMRC before the due date if you cannot pay; leaving it adds interest and can lead to enforcement. A loan should finish before next year's bill so the two do not overlap. See when tax is due in GOV.UK: pay your Corporation Tax bill, and if VAT or PAYE is also due, read VAT loans, PAYE loans and the HMRC loans hub. To see corporation tax loan options, get instant corporation tax loan quotes.
Why profitable companies run short when corporation tax is due
Corporation tax is charged on profit, not on cash. A company can show a strong profit for the year yet have spent the money growing: buying stock ahead of demand, investing in equipment, or waiting on customers who pay slowly. The bill then arrives months after the year end, often as a single payment, when cash is committed elsewhere. Spreading it protects the growth that created the profit.
When corporation tax is due
For most companies, corporation tax is payable nine months and one day after the end of the accounting period; larger companies pay in quarterly instalments. Late payment attracts interest from HMRC. Check GOV.UK: pay your Corporation Tax bill for the current rules that apply to your company.
When a corporation tax loan may suit
- A large annual bill would drain reserves needed for payroll, stock or suppliers.
- You want to keep investing in growth rather than pause it to pay tax.
- Your year end falls so the payment lands in a quiet trading period.
- You paid the bill from cash and now need to rebuild working capital.
Security and personal guarantees
Most corporation tax loans are unsecured, so you do not pledge property or equipment. Lenders usually ask one or more directors for a personal guarantee instead. Directors who want to limit that exposure can look at personal guarantee insurance from specialist insurers; we do not give insurance advice.
Costs and planning
You pay interest and possibly an arrangement fee, so borrowing costs money that paying from reserves would not. Pricing depends on your credit profile, trading history, the amount and the term. Plan the term carefully: if next year's bill arrives while this loan is still being repaid, the commitments stack up. Setting aside a monthly tax reserve once the loan is cleared helps break the cycle.
Alternatives to a corporation tax loan
HMRC Time to Pay
If you cannot pay, HMRC may agree a Time to Pay arrangement to spread the debt. It is at HMRC's discretion, usually requires contacting HMRC before the deadline, and interest still accrues. See GOV.UK: if you cannot pay your tax bill on time.
Other finance
A revolving credit facility or overdraft can cover tax alongside other recurring costs; invoice finance can release cash tied up in unpaid invoices; and a VAT loan handles the quarterly VAT bill if that is the one causing pressure.
How to apply
Send us your tax computation, accounts, bank statements and director details, and we approach lenders that fund corporation tax, then talk you through the offers. Contact us well before the payment deadline: decisions can come within a few working days once a lender has everything it needs. Approval is always the lender's decision. When you have your tax figure, discuss your requirement online.
Corporation tax loan timeline: from year end to final repayment
- Accounts finalised: your accountant prepares the accounts and the tax computation.
- Check your options: get instant corporation tax loan quotes (no credit search) to see which lenders fit.
- Apply: send the computation, filed accounts, recent bank statements and director details.
- Lender decision and signing: the lender checks affordability and credit, then issues the agreement and any guarantee.
- Tax paid by the deadline: funds go to HMRC or to your account to pay it, depending on the lender.
- Monthly repayments: over a term that should end before next year's bill.
Underwriting
What lenders look at
01
A UK-registered limited company with a trading history and filed accounts.
02
Profitability and the trend in turnover, since the tax reflects last year's profit.
03
Evidence of the liability and the due date; underwriters often compare the tax figure with the profit in your accounts to check the two tie up.
04
Bank statements showing the repayments are affordable alongside VAT and payroll.
05
Company and director credit history, and any existing HMRC arrears.
Underwriting
Eligibility for a corporation tax loan
On the Corporation Tax products on our panel, the main conditions are:
01
A limited company
Corporation Tax is a company tax, so these loans are for limited companies.
02
Time trading
from 12 months to 3 years, depending on the lender.
03
Profit and accounts
some lenders want a profit in the last accounts, which most companies paying Corporation Tax will show.
04
Credit history
fair credit or better on every product listed, and several refuse any adverse credit.
05
Guarantees
most ask for a director's personal guarantee; one lender usually asks only above £150,000.
Checklist
Documents to have ready
- The corporation tax computation (CT600) or HMRC statement.
- Latest filed accounts and, if the year end was some months ago, current management accounts.
- Recent business bank statements.
- Director identification and address details.
- Proof of payment to HMRC, if you are refinancing a bill already paid.
Side by side
Compare your options
How the main business finance structures work. Lenders set their own terms, so treat this as a guide to the questions to ask.
| Option | How you repay | Security | Often used for |
|---|---|---|---|
| Unsecured business loan | Fixed instalments, usually monthly | No charge over assets; a personal guarantee is usually required | Growth, stock, tax bills and cash flow |
| Secured business loan | Fixed instalments, often over a longer term | A charge over property or other assets | Larger sums, property and refinancing |
| Revolving credit facility | Interest on what you draw; repay and redraw | Varies by lender and case | Recurring or uneven cash flow gaps |
| Merchant cash advance | A share of future card takings | No charge over assets | Card-taking businesses with uneven months |
| Asset finance | Regular payments over the life of the asset | The asset being financed | Equipment, vehicles and machinery |
| Invoice finance | Settled as customers pay their invoices | Your unpaid invoices | Businesses waiting on customer payment |
General information only. Every lender has its own criteria, and all finance is subject to status.
What is the best way to fund a corporation tax bill?
The cheapest way is cash the company already holds; after that, compare a director's loan, an HMRC payment plan and a corporation tax loan on total cost. Smart Funding Solutions, a whole-of-market commercial finance broker, searches lenders that fund tax bills so you can set a loan quote beside HMRC interest and choose the option that leaves the business enough cash to trade.
| Option | Suits | Watch for |
|---|---|---|
| Company cash reserves | Companies that set tax aside through the year | Leaving too little for wages, VAT and suppliers |
| Director's loan to the company | Directors with personal savings to spare | Any interest charged is taxable income for the director, and the company must deduct tax and report it on form CT61 |
| HMRC payment plan (Time to Pay) | A bill that is overdue or about to be | HMRC decides, checks affordability and charges late payment interest |
| Corporation tax loan | Profitable companies short of cash on the due date | Interest and fees; usually a director's personal guarantee |
| Revolving credit or invoice finance | Companies with several bills a year, or cash tied up in invoices | Ongoing fees on the facility |
How to choose
- Know the cost of doing nothing. HMRC charges late payment interest from the day after the due date, normally nine months and one day after the accounting period ends, and that interest is tax deductible: see GOV.UK: Corporation Tax interest charges.
- Price the director's loan honestly. GOV.UK sets out the tax on interest a company pays a director in lending your company money. Our guide to the director's loan account explains the records.
- Keep the term short. A loan that runs past next year's bill stacks two tax debts together; most companies aim to clear it well before the next deadline.
- Compare a payment plan. Our page on Time to Pay versus a tax loan sets the trade-offs side by side.
Accountancy firms often arrange this for clients; see tax funding for accountancy practices and VAT and tax funding for law firms. For other HMRC bills, see VAT loans, income tax loans and the HMRC loans hub. To see which lenders on our panel fund corporation tax, use Instant Quotes.
Corporation tax deadlines and when to arrange a tax loan
If your taxable profits are up to £1.5 million, Corporation Tax is due 9 months and 1 day after the end of your accounting period. The Company Tax Return is due later, 12 months after the period ends, so the tax is paid before the return deadline. Sources: GOV.UK: pay your Corporation Tax bill and GOV.UK: Company Tax Returns.
| Year end | Corporation Tax due | Return due |
|---|---|---|
| 31 December 2025 | 1 October 2026 | 31 December 2026 |
| 31 March 2026 | 1 January 2027 | 31 March 2027 |
| 30 June 2026 | 1 April 2027 | 30 June 2027 |
Companies with taxable profits over £1.5 million pay in quarterly instalments instead. For a 12-month period, the first is due 6 months and 13 days after the period starts, then every 3 months, with the last due 3 months and 14 days after the period ends, as set out in GOV.UK: paying Corporation Tax in instalments. HMRC charges interest on tax paid late: see GOV.UK: Corporation Tax interest charges.
A sensible plan is to apply as soon as your accountant has the tax figure, often two to three months before the payment date, so there is time for the lender's checks.
What a tax loan could cost: a worked example
A company owes £60,000 Corporation Tax due on 1 October. These figures are an illustration we have worked out, not a quote; your price depends on the lender and your circumstances.
| Option | Cost | Monthly payment |
|---|---|---|
| Flat charge of 4.39% over 6 months | £2,634 | £10,439 |
| Flat charge of 7.34% over 12 months | £4,404 | £5,367 |
| Loan at an illustrative 12% a year over 6 months | About £2,117 in interest | About £10,353 |
The two flat charges come from one Corporation Tax product on our panel (October 2026), which needs at least 12 months' trading and no adverse credit. A longer term lowers the monthly payment but raises the total cost. Try your own numbers in the business loan calculator.
Corporation tax loan lenders on our panel
These lenders on our panel fund Corporation Tax bills. Some lend only to professional firms. Several also fund Self Assessment bills, covered on our income tax loans page.
| Lender and product | Amount | Term | Indicative price | Main conditions |
|---|---|---|---|---|
| Premium Credit Corporation Tax | £10k to £1m | 3 to 12 months | 3.15% flat over 3 months to 7.34% flat over 12 months | 12 months trading; personal guarantee: usually asked for over £150k, case by case; no adverse credit |
| Playter Professions Corporation Tax Loan | £25k to £2m | 6 to 12 months | 8.9% to 9.5% a year | 12 months trading; professional firms only; personal guarantee; no adverse credit. £200 document fee, charged on drawdown |
| Playter Corporation Tax Funding | £30k to £500k | 3 to 12 months | 1.33% to 2.25% a month plus an arrangement fee of 1% to 10% | 12 months trading; turnover from £250k a year; limited companies; no personal guarantee on the rate card |
| Metro Bank Asset Finance Professions Corporation Tax Loan | £150k to £1m | 1 to 12 months | Rate on application | 3 years trading; professional firms only; profitable; personal guarantee: not always needed with a strong credit score; no adverse credit |
| White Oak Loans Corporation Tax Loan | £10k to £500k | 3 to 60 months | Rate on application (fixed monthly payments, no early repayment fees) | 3 years trading; profitable; personal guarantee; no adverse credit |
| Siemens Financial Services Professions Corporation Tax Funding | £25k to £100k | 3 to 12 months | Rate on application | 3 years trading; professional firms only; personal guarantee |
Indicative ranges from lenders on our panel, checked October 2026; your rate depends on your circumstances. Figures come from the rate cards these lenders give us as a broker, with amounts shown within the £10,000 to £20 million range we arrange. Lenders set their own criteria and pricing, approval is always the lender's decision, and this is not a quote.
Tax loan or HMRC Time to Pay: comparing the options
| Option | How it works | Watch for |
|---|---|---|
| Corporation tax loan | Tax paid on time; you repay the lender monthly | Interest and fees; personal guarantee |
| HMRC payment plan | Monthly instalments agreed with HMRC on an overdue bill | HMRC decides; interest runs; directors may be asked to put money in |
| Revolving credit | A limit you draw on for tax and other bills | Fees on the limit |
| Paying from reserves | No borrowing cost | Less cash for stock, staff and growth |
GOV.UK says that if you owe company tax you must reduce the debt as much as possible before HMRC agrees a plan, and HMRC may ask directors to put personal funds in: see GOV.UK: if you cannot pay your tax bill on time. Our guide to Time to Pay versus a tax loan compares the two, and VAT loans cover the quarterly VAT bill. Partners in law, accountancy and other professional partnerships funding their personal tax should see our practice tax funding page.
FAQs
Questions clients ask
Can I get a corporation tax loan with bad credit?
Some lenders will consider a corporation tax loan where the company or its directors have adverse credit, but the choice is narrower and pricing is usually higher. Lenders check company and director credit history and any existing HMRC arrears, and they look closely at whether bank statements show the repayments are affordable. Older, settled problems are viewed more favourably than recent ones. See bad credit business loans for how lenders assess credit issues.
Is a corporation tax loan better than HMRC Time to Pay?
Neither is always better: a corporation tax loan pays HMRC in full and on time, while Time to Pay spreads the debt with HMRC itself. Time to Pay is at HMRC's discretion and interest still accrues, whereas a loan costs interest and possibly an arrangement fee but keeps your HMRC account clear. Our comparison of Time to Pay vs a tax loan sets out when each tends to suit.
How long can I spread a corporation tax loan over?
Corporation tax loans are short-term loans repaid in fixed monthly instalments, with the exact term agreed with the lender. The term should ideally end before the next corporation tax bill is due, which for most companies is nine months and one day after the year end. Otherwise the two commitments stack up. Setting aside a monthly tax reserve once the loan is cleared helps avoid borrowing again next year.
Can a sole trader get a corporation tax loan?
No, corporation tax loans are for UK limited companies, because sole traders do not pay corporation tax. A sole trader pays Income Tax through Self Assessment instead, and that bill can be funded with a different product that works in a similar way, with fixed monthly repayments over a short term. Borrowing of £25,000 or less by a sole trader can be regulated consumer credit. See income tax loans for the details.
When is Corporation Tax due?
For companies with taxable profits up to £1.5 million, Corporation Tax is due 9 months and 1 day after the end of the accounting period. Larger companies pay in quarterly instalments. See GOV.UK for the rules that apply to your company.
How much does a corporation tax loan cost?
It depends on the lender, the amount, the term and your credit profile. On our panel (checked October 2026), prices run from a flat charge of 3.15% over three months to annual rates of up to 27%, and some lenders price on application. Compare the total repayable, including any fees, with the interest HMRC would charge on a late payment.
Can I borrow to pay Corporation Tax I have already paid?
Some lenders will refinance a Corporation Tax bill you have recently paid from your own cash, which can restore working capital. Lenders set time limits on this, so raise it early and have proof of payment to HMRC ready.
What is a tax loan?
A tax loan is short-term business borrowing used to pay an HMRC bill such as Corporation Tax, VAT or Self Assessment on time, repaid in monthly instalments. See our HMRC loans page for each type.
What is the best way to fund a corporation tax bill?
Paying from cash the company already holds is cheapest. If that is not possible, compare a director's loan, an HMRC payment plan and a corporation tax loan on total cost, including HMRC late payment interest, which runs from the day after the due date. Smart Funding Solutions, a commercial finance broker, can show which lenders on its panel fund corporation tax so you can compare quotes.
How do I pay my corporation tax bill in instalments?
Unless your company is large enough to pay quarterly instalments by law, corporation tax is due in one payment. To spread it, ask HMRC for Time to Pay or use a corporation tax loan that pays HMRC in full while you repay monthly. Smart Funding Solutions arranges corporation tax loans from its panel. Get instant quotes.
What is a corporation tax loan in the UK?
A short-term business loan that pays your company's corporation tax to HMRC in full and on time, repaid in fixed monthly instalments, usually over 3 to 12 months. Lenders want filed accounts, a tax computation and affordable bank statements, and usually a director's guarantee. Smart Funding Solutions compares specialist tax lenders. Get instant quotes.
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