Which finance to use for a Corporation Tax bill

2 min read

9 months + 1 dayCT due after year-end

Spread itThe goal

Loan vs TTPThe comparison

The timing trap

Corporation Tax is due nine months and one day after your company's year-end, on profits that may have been earned — and the cash spent — long before. That gap catches profitable companies out: the tax reflects last year's success, but this year's cash has moved on. When the bill exceeds what you can spare, spreading it beats missing the deadline and facing interest and penalties. See our Corporation Tax finance guide.

Loan or revolving line versus HMRC Time to Pay

HMRC's Time to Pay arrangement can let you spread a tax bill directly with HMRC, and where available it is worth exploring first — but it is discretionary, can carry interest, and being in an arrangement may affect how the company is viewed. A short-term loan or revolving line clears the bill in full on time, keeps you out of an HMRC arrangement, and spreads the cost on terms you control. Weigh both: Time to Pay for flexibility with HMRC, or finance for a clean settlement and predictable repayments.

	Loan / line	Time to Pay
Who you owe	The lender	HMRC
Certainty	Agreed terms	Discretionary
Bill status	Cleared on time	Outstanding, being paid down

Plan the next one out of existence

As with VAT, the durable fix is to set tax aside through the year so the bill is funded when it lands. Estimate the liability with our Corporation Tax calculator and move that share into a separate pot as profits accrue. Finance bridges a bill you have not provisioned for; provisioning removes the need to borrow at all.

The Credicorp view

A short-term Credicorp business loan clears a Corporation Tax bill on time and spreads it over manageable months on terms you control — lent to the company with no personal guarantee. It keeps you out of an HMRC arrangement and your record clean. Register to apply. Educational content, not financial or tax advice.

Frequently asked questions

Can I get a loan to pay Corporation Tax?

Yes. A short-term business loan lets you clear the bill on time and spread the cost over a few months, avoiding HMRC interest and penalties. It keeps you out of a Time to Pay arrangement and lets you repay on predictable terms you control rather than at HMRC's discretion.

Is a loan better than HMRC Time to Pay?

It depends. Time to Pay can spread a bill directly with HMRC and is worth exploring, but it is discretionary and the bill stays outstanding while you pay it down. A loan settles the bill in full on agreed terms, which some directors prefer for certainty and a clean record. Weigh both.

How do I avoid a tax cash squeeze next year?

Provision for it. Estimate the liability as profits accrue and move that share into a separate pot through the year, so the bill is funded when it falls due nine months after year-end. Finance bridges an unprovisioned bill; setting the money aside removes the need to borrow.