Income tax loans: spread your self-assessment bill over monthly payments

Some lenders will fund a bill shortly after the deadline, but HMRC charges interest on late payment from the due date and penalties can follow. Start the process as early as possible, and if you cannot pay on time, speak to HMRC about Time to Pay before the deadline passes rather than after.

Yes, if you have a personal self-assessment liability, for example on dividends. The loan is made to you personally rather than the company, so the lender assesses your own income, bank statements and credit history. If the tax is owed by the company, such as corporation tax or PAYE, a business tax loan such as a corporation tax loan is the right route instead.

Some lenders will consider an income tax loan with adverse credit, but the choice is narrower and pricing is usually higher. Your personal credit history carries more weight for the self-employed than for a company, so lenders look at how recent and how serious any problems were. Bank statements showing steady income and room for the repayments help. Our page on bad credit business loans explains how lenders view credit issues.

Possibly, as long as your tax return is filed and your bank statements show income that supports the repayments. The first January bill is often the largest, because it can combine the balancing payment with a first payment on account. Lenders want an income history, so a very short record narrows the options. Applying well before 31 January gives the most choice, including the option of asking HMRC for Time to Pay.

Yes, partners in a partnership or members of an LLP can get an income tax loan to pay their Self Assessment bills. Loans of £25,000 or less to a sole trader or a small partnership of two or three partners can be regulated consumer credit, with affordability checks and statutory protections. Where the borrower is a partnership or LLP, lenders may ask partners or members for personal guarantees. See HMRC loans for other tax funding options.

It can be, if the repayments fit comfortably alongside your living costs and your next tax bill, and the loan costs less than paying late or the interest under a Time to Pay arrangement. It is a poor idea if you would need another loan for next year's bill too. In that case, a budget payment plan or reviewing your payments on account may address the underlying gap.

Lenders usually size a tax loan to the bill shown on your HMRC calculation, subject to affordability from your bank statements and credit history. Across our panel we arrange business finance from £10,000 to £20 million. Loans of £25,000 or less to sole traders and small partnerships can be regulated consumer credit, which brings affordability checks and statutory protections.

Sometimes. Some lenders will fund the remaining balance so the arrangement can be cleared, but they will look at why the plan was needed, whether instalments have been paid on time and how the new loan repayment compares with the current one. Have the arrangement letter and recent payment history ready, and do not stop paying HMRC until the loan has completed.

Yes. Specialist lenders fund self assessment bills for sole traders, paying HMRC and taking monthly repayments. Smaller loans to sole traders can be regulated consumer credit with full affordability checks. Lenders usually want your HMRC calculation, bank statements and credit history. Smart Funding Solutions, a commercial finance broker, searches lenders that accept sole traders; compare the cost with an HMRC payment plan first.