How to manage cash flow around tax deadlines

2 min read

PredictableKnown dates

Ring-fenceAs you earn

BridgeIf bunched

Cash in the bank (£)

Average monthly net cash burn (£)

Runway = cash ÷ monthly net burn. It estimates how many months of cash you have left at the current burn rate.

Step 1: Map every tax date on one calendar

Put your VAT deadlines, corporation tax payment date, PAYE dates and any instalments on a single calendar. Seeing them together reveals where they bunch — the weeks most likely to cause trouble.

Step 2: Ring-fence the money as it accrues

The cleanest defence is to move VAT and a slice of profit for tax into a separate account as you earn it — see setting money aside. Money you never treated as spendable cannot cause a crunch.

Step 3: Forecast the pinch points

Overlay the tax calendar on your cash-flow forecast. Where a tax payment collides with payroll or a slow month, you will see the trough weeks ahead — early enough to act without panic.

Step 4: Smooth the timing where you can

Some tax can be spread — annual accounting for VAT, instalments for large companies. Chasing debtors ahead of a big deadline also helps. Small timing moves can defuse a pinch point.

Step 5: Have a bridge ready

When a genuine bunch of outflows lands in one week, a short working-capital facility covers it and is repaid as customers pay you — far better than paying HMRC late.

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.

See bridging a VAT or tax bill.

Frequently asked questions

Why do tax deadlines cause cash-flow problems?

Because businesses treat the VAT and tax they have collected as spendable cash, then face the bill when it falls due. The dates are predictable, so the fix is ring-fencing the money as it accrues rather than spending it.

How do I stop a tax bill catching me short?

Ring-fence VAT and a slice of profit for tax in a separate account as you earn it, map all tax dates on one calendar, and overlay them on your cash-flow forecast so you see any crunch weeks ahead.

What if tax payments still bunch in one week?

Smooth what you can with schemes like VAT annual accounting or instalments, chase debtors ahead of the deadline, and keep a short working-capital facility ready to bridge a genuine pinch — cheaper than paying HMRC late.