“A Pinch Point for Businesses”

As we hit January Tax and VAT deadlines and deadlines for self-assessment taxpayers being extended , Paul Trickett from Bathgate Business Finance advises company owners to consider their cashflow options.

“Most businesses have this month faced their biggest Tax and VAT bills of the last two years, as deferrals on payments facilitated during the pandemic come to an end. The calling in of these payments means that the Tax and VAT bills have been larger than usual and both have hit cashflow at the same time.

“It’s likely to be a stressful time and a pinch point for businesses, especially as many will also be starting to repay loans provided by Government schemes such as Bounceback Loans, CBILS and CLBILS. But there are plenty of options available.

“The good news is that more funders have returned to the marketplace, which means there is a wider variety of options than there were a year ago and short-term loans – for 3, 6 or 12 months – are more readily available. Such short-term finance can be used to pay tax and VAT bills, without causing cash flow problems.

“These products are useful for businesses that may not have been able to save up the funds to pay these looming bills, but also for those that have. There is sometimes reticence about taking out finance for VAT and Tax bills. When I find this, I tend to highlight that most of us spread the cost of our car insurance over the year. It’s seen as the sensible option, to have a regular monthly payment, rather than one large lump sum going out. All this is, is a loan.

“Why should paying business Tax or VAT bills be considered any different? Tax and VAT finance simply allows businesses to straighten the line out and keep cash flow steady. Funders are also now far more comfortable with providing this type of finance. There is a tangible bill to pay and some will even do that directly with HMRC.

“You can start exploring your options as soon as you have indicative figures from your accountant and finance can be pre-approved and ready to go as soon as your bill lands. Getting cash flow concerns sorted really can be that simple and relieve a great deal of worry.”

For further information about VAT and Tax finance options please contact Paul Trickett on 074 6914 0180 or email proposals@bathgatebf.co.uk