Premium Credit review: VAT and tax funding for UK businesses

Premium Credit is one of the best known names in UK premium finance, and it also funds business tax bills: VAT, corporation tax and self assessment. Instead of paying HMRC in one go, a business or its owners can spread the bill over monthly instalments. Smart Funding Solutions is an independent broker, so we can compare Premium Credit's tax funding with other ways of handling a large tax bill. You can read more on Premium Credit's own website.

01About Premium Credit

Premium Credit describes itself as the number one premium finance company in the UK and Ireland, with more than 30 years of experience. Its website says it serves over 2.6 million customers, works with more than 3,000 partners, and originates over £5 billion of loans a year. Most people meet it without realising: it is the company behind many monthly payment plans for insurance, school fees and professional memberships.

Alongside premium finance, it runs a tax and VAT funding proposition for businesses, distributed through accountants and brokers. In trade press coverage it has described itself as one of the leading funders of tax and VAT finance in the UK and reported strong growth in the number of businesses using it.

Premium Credit is one of the lenders on our panel. Smart Funding Solutions is an independent broker and is not part of Premium Credit.

02What Premium Credit funds

Product	What it is for	Typical size	Typical term
VAT funding	Spreading a quarterly or annual VAT bill	From around £10,000, with larger bills considered	Short terms, often around 3 to 12 months
Corporation tax funding	Spreading a company's corporation tax liability	From around £10,000, with larger bills considered	Up to 12 months
Self assessment funding	Spreading income tax owed by directors, partners and sole traders	From around £10,000	Up to 12 months

The structure is simple. Premium Credit pays HMRC directly, or reimburses you if you have already paid, and you repay in monthly instalments. Press coverage of its self assessment product has described repayment options of 6, 10 or 12 months for tax bills and a shorter term for VAT. Funding is unsecured. For a fuller picture of how this kind of borrowing works, see our pages on VAT loans and corporation tax loans.

03Who Premium Credit suits (and who it may not)

Tax funding from a specialist like Premium Credit tends to work best for profitable, established businesses that can afford the tax but would rather not drain cash reserves in one month.

• Growing companies that would rather keep cash for stock, hiring or investment and spread the tax bill instead.
• Professional practices such as accountants, solicitors and consultancies, where partners and directors face large personal tax bills each January and July. Our page on income tax loans looks at this in more detail.
• Seasonal businesses whose tax falls due at a quiet time of year.

It is not designed for a business that genuinely cannot afford its tax. If cash flow is under real strain, an agreement with HMRC may be more appropriate, and lenders will look closely at affordability. Our guide comparing HMRC Time to Pay with a tax loan sets out the differences. Premium Credit's tax funding also starts from around £10,000, so very small bills may be better handled another way.

04What Premium Credit looks at

Tax funding decisions are usually quicker and lighter than a full business loan, but lenders still need comfort that the instalments are affordable. Typically, a tax funder will ask for:

• The HMRC liability: a VAT return, corporation tax computation or self assessment calculation.
• Recent filed accounts or management accounts.
• Basic company and director details.
• Bank details for the direct debit.
• For larger amounts, evidence of trading performance and cash flow.

Coverage of its products indicates personal guarantees are not required on smaller amounts, while larger facilities may need more support. Applying well before the HMRC deadline gives everyone time to complete checks and avoids late payment penalties.

05Pros and cons

• Pro: a large, long established specialist in instalment finance.
• Pro: covers VAT, corporation tax and self assessment in one place.
• Pro: pays HMRC directly, so the tax is settled on time.
• Pro: unsecured, with no charge over business assets.

• Con: borrowing to pay tax adds a cost compared with paying from cash.
• Con: short terms mean the next bill can arrive before the last is repaid, so it needs careful planning.
• Con: not designed for businesses already in difficulty with HMRC.
• Con: minimum amounts make it less suited to small bills.

Tax funding decisions are usually quicker and lighter than a full business loan, but lenders still need comfort that the instalments are affordable.

06Applying through a broker vs going direct

Premium Credit's tax funding is generally arranged through accountants and brokers rather than sold straight to the public. Going through a broker also means you can compare it with other options: a specialist VAT lender, a short-term unsecured loan, or a revolving facility you can draw on each quarter.

We look at the size and timing of the bill, your cash flow and any other borrowing, then search the market and approach suitable lenders so the tax is paid on time. It is free to enquire; any broker fee is disclosed separately before you proceed. To see what might be available, use our instant quotes tool and compare lenders in minutes.

07Alternatives to Premium Credit

• County Finance Group: offers VAT and tax funding alongside asset finance, which can suit businesses wanting both from one provider.
• White Oak: worth comparing on VAT funding and unsecured loans, particularly where a longer facility might also be needed.
• Playter: lets established limited companies spread a VAT bill over instalments through its online platform, often with fast decisions.