Are you likely to have to pay a penalty to HMRC because you can’t afford to pay your corporation tax bill on time? If so, you aren’t alone, according to Funding Option business owners were unable to pay their tax bill on time in the 2014/15 tax year and the HMRC took 1.8 billion in late payment fees.
The same company has also estimated that the amount owed in late payment fees is likely to increase again for the 2016/17 tax year too.
The possible rise in the already-steep figure could be down to the rocky economy around the time of Brexit. 2016 wasn’t the most financially secure year for a lot of businesses due to the economic uncertainty which in turn may have a knock-on effect with some struggling to pay their tax bill again this year.
The HMRC state that you must pay your corporation tax 9 months and 1 day after the end of your accounting period which is normally at the end of the financial year. Some companies may have two accounting periods within the same tax year as accounting periods depend on when your business was set up.
What’s more, the HMRC has been clamping down on late corporation tax payments with not only penalties but the seizure of assets as well. This is causing cash-flow problems for many SME’s who have been hit with a penalty. That’s not all, over the past five years’ banks have been cutting SME’s overdrafts too, causing further cash flow problems for small businesses wishing to access finance to pay their tax bill.
So, what other options are there for businesses? Luckily, PFC provide a range of alternative funding routes for businesses to choose from:
Refinance Assets – This is a form of lending that allows you to borrow against your tangible assets, from vehicles to equipment, even IT and office furniture can be refinanced to provide essential capital.
Invoice Finance – A method that helps to improve cash flow by allowing you to borrow money against any unpaid invoices you may have. We work with the UK’s leading Invoice Discount funders, with expertise in all sectors. We can also offer funding against single invoices if you don’t want to commit to full invoice finance.
Tax Funding – An option that’s available to every type of business, whether it be self-assessment, corporation tax or partnership. This funding option is available in fixed terms from 6 to 12 months.
Whatever your needs, PFC can arrange five, six and seven figure funding for VAT and tax bills for sole traders up to multi-director businesses. With access to a panel of more than 30 lenders, PFC can provide access to finance where banks may fail. For more information visit: https://pfcfinance.co.uk/sme-finance/ or Contact us directly on: 01829 738 799.