Can you get a loan for corporation tax and VAT payments?

It is possible to get a loan for corporation tax and VAT payments, and some financial institutions offer loans specifically for businesses to cover tax obligations. However, it is essential to consider the terms and conditions of such loans carefully and to ensure that taking on debt is the right decision for your business. Before deciding, speaking with a financial advisor to explore your options may be a good idea.

Capitoo – Funding for your business.

Insuro has partnered with Capitoo to provide you with a solution. Insuro is an introducer and has no connection or responsibility for financial arrangements.

How much is corporation tax for UK limited company?

The corporation tax rate for limited companies in the United Kingdom is 19%. This rate has been in effect since April 1, 2020, and is scheduled to remain in place until at least April 1, 2023.

It’s worth noting that the corporation tax rate for limited companies has changed several times in recent years, and the rate may change again. Hence, keeping up-to-date with the most current information from HM Revenue & Customs (HMRC) is essential.

In addition to the standard rate of corporation tax, there are also special rules and lower rates that apply to certain types of profits, such as those generated by patents, which are taxed at a lower rate of 10%. Considering these rules and lower rates when calculating the corporation tax liability for a limited company in the UK is essential.

How do you pay corporation tax in the UK?

Here are the steps for paying corporation tax in the United Kingdom:

1. Calculate taxable profit: The first step is calculating the company’s taxable profit, and this is done by subtracting allowable expenses and reliefs from the company’s total revenue.
2. File a company tax return: Companies must file a company tax return each year, usually by the deadline of 12 months after the end of the accounting period. The tax return must include details of the company’s taxable profits and any losses from previous years.
3. Pay corporation tax: After calculating the taxable profit and filing a company tax return, the company must pay the corporation tax owed to HM Revenue & Customs (HMRC). This is usually done electronically through HMRC’s online portal or by direct bank transfer.

In the UK, companies must pay corporation tax in instalments, known as “payments on account”, if they owe more than £1,000 in corporation tax. The payments on account are due on the exact dates as the self-assessment income tax payments.

It’s also vital for UK companies to keep accurate records and retain supporting documentation for their corporation tax calculations and payments, as HMRC may conduct an enquiry into the company’s affairs.

When do you pay vat?

Businesses typically pay Value Added Tax (VAT) to sell customers goods and services. VAT is added to the price of the goods or services, and the business must then remit the VAT collected to the tax authorities. In most countries, VAT is collected by companies on behalf of the government and is paid periodically, typically on a monthly or quarterly basis. The specific rules and regulations for VAT payment vary from country to country, so it’s essential to check the laws in your jurisdiction.

How much is VAT in the UK?

In the United Kingdom, the standard VAT rate is 20%. However, 5% and 0% reduced rates apply to certain goods and services, such as food items, children’s car seats, and energy-saving materials. Additionally, there is a different VAT rate of 5% for certain sanitary products, commonly referred to as the “tampon tax”.

Can you avoid paying taxes?

It is illegal and unethical to avoid or evade paying VAT intentionally. Doing so is considered tax fraud and can result in severe penalties and fines, including imprisonment in some cases. Businesses are obligated to collect and remit VAT by the laws and regulations of their jurisdiction. Businesses must stay compliant and fulfil their tax obligations to maintain a good reputation and avoid legal consequences.

How can you defer tax payments?

In the context of Value Added Tax (VAT), “deferring tax payments” refers to the temporary postponement of VAT payment to a later date. This can be achieved in several ways, including:

• Time of Supply: Depending on your jurisdiction’s specific laws and regulations, the time of supply for VAT purposes can affect when VAT is due. For example, in some countries, VAT is due when the invoice is issued, while in others, VAT is due when payment is received.
• VAT Cash Accounting Scheme: This allows businesses to account for VAT only when payment is received rather than when the invoice is issued. This can help companies to defer VAT payments, particularly if they have an extended payment cycle or deal with customers with a poor credit history.
• Short-term loans: Some businesses may opt to take out short-term loans to cover VAT payments, which can help them to defer payment until they have sufficient funds. It’s important to note that deferring VAT payments should only be done in accordance with the laws and regulations of your jurisdiction and with the approval of the tax authorities. Sometimes, interest and penalties may apply to late or deferred VAT payments.

How long can you get a loan for VAT or Corporation Tax?

Capitoo offers a 3-month loan for VAT and 3, 6, 9 or 12 months for Corporation Tax.

What is covered in the Corporation Tax or VAT loan?

Current liabilities are covered. Indemnity and personal through the company can also be covered, but this is rare. NI and/or PAYE are not covered, as current payments are monthly to HMRC.

What is the minimum loan?

There is a £25,000 minimum loan requirement.

What are the fees/charges?

They charge up to 1% to 9%, with an average 5% fee.

What is the average loan size?

£80,000 to £100,000 is the average loan size. Capitoo also handle loans larger than this, so don’t worry if your VAT or Corporation Tax exceeds this.

How many providers are there?

This isn’t a comparison service. We are introducing a specialist business lender called Capitoo. Capitoo uses a high-street bank to fund the payments using a specific lending arrangement.

What do you need to provide?

• The latest filed accounts.
• 3 months of bank statements.
• Screenshot from HMRC or computation.

Which sectors are preferred?

Although Capitoo provides funding arrangements to many different types of businesses, we find that certain businesses commonly utilise this service; these include:

• Solicitors.
• Accountants.
• Recruitment companies.
• Creative Agencies.

What else should I consider?

• This is not invoice factoring/finance and cannot be used.
• Capitoo operates as a B2B provider within the unregulated market.
• This service is not available for sole traders. The funding arrangement is only for LLP, LTD and PLC (with partnerships of up to 4 people.

How can I access the funds?

A quarterly drawdown is available for VAT.

We are currently looking at putting in place a reminder service for SMS and Email.

How long do businesses use this service?

On average, businesses utilise this service for upwards of 5 years. This is increasing because the service has only been available for several years.

VAT Loan payment is one of the many business services provided by insuro by way of introduction.

How to calculate my VAT?

VAT calculations can be complicated. The simplest way is to use a calculator.