Can I use Invoice Finance to pay Tax Bill?

Can I use Invoice Finance to pay Tax Bill? image

Can I use Invoice Finance to pay Tax Bill is question we’re asked on many occasions. VAT is paid quarterly and corporation tax is paid annually so your business has the good time to plan and set monies aside.

But that is sometimes easier said than done especially when you rely on your customers to pay their invoices on time which more often than not doesn’t happen. Not having great cashflow can often hurt a small business or SME sometimes to the brink of financial collapse.

This can be especially the case when you are relying on unpaid invoices to pay for the running costs of your business – especially when tax affairs are required.

A tax bill from the HMRC is crucial to pay and if there is a problem you need to let them know as soon as possible. The HMRC is the highest priority when it comes to paying your own bills so not acting is not the right option.

If you have unpaid invoices with customers and you are struggling to balance your cashflow you could look to invoice finance as one solution. You could receive up to 90% of your invoice values into your business account within 24 hours allowing you to unlock cash in your business which will enable you to ease your cashflow situation.

An invoice finance facility gives your business immediate working capital whilst you retain the full control of your sales ledger and importantly the relationship with your customer. As soon as your business has qualified after your initial application up to 90% of the invoice value in cash is sent to your business bank account. The outstanding amount is paid to you once your customer pays in full minus fees.

If you have received a tax bill which your business cannot afford to pay you must speak to the HMRC directly and as soon as possible. They may be able to set up a repayment schedule but if they demand the monies immediately you can look to raise finance with a number of business finance products. Invoice Finance is a good option if you have large unpaid invoices that are outstanding with your customers.

Invoice factoring is another option and allows funding up to four times the amount compared to that of traditional ‘high street’ finance. Invoice factoring is otherwise known as ‘debt factoring’ manages your sales ledger and collects money owed by your customers themselves.

Release the cash tied up in unpaid invoices today and give your business the room to breathe. Apply for a no obligation quote and a chat to see how we can help your business today.

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