Are you finding like many businesses this year, making your payments to HMRC (on time) for your tax bill is likely to be a challenge? With the current cost of living increases, cash flow is often tight and covering an unexpectedly large tax bill can be difficult. So, what can you do if you find yourself in this situation?
First of all – don’t panic.
This situation can be daunting, and many business owners don’t know where to turn. Rising costs have created a challenging situation for many businesses, but a good place to start is by knowing your options if cash isn’t available. Never underestimate the value of speaking to your accountant or advisor who can provide valuable advice on how best to proceed with cashflow planning, making payments or starting a conversation with HMRC.
There are also resources available to provide help to cover these taxes to help businesses maintain financial stability and give businesses a breather while they find more permanent solutions. Knowing what questions to ask and researching government programs can help alleviate some of the stress associated with the tax man in an already shaky economy.
Second – contact HMRC as soon as possible.
Generally, you or your accountant will be able to discuss with HMRC ways in which you can cover your current bill. This could include making smaller payments spread over an extended period of time or getting an extension on paying it off in full. If you need support in negotiating with HMRC, there are plenty of resources online, including calculators which will help you in assessing what payment plan is best for you and your company’s needs.
Should you finance your tax bill payment?
Financing your business tax bill payment is an option that many consider. It often provides more flexibility with regard to payment options, allowing businesses to spread out their payments over a longer period of time than traditional methods might ordinarily allow. However, despite the flexibility, this option should be chosen with caution as financing your tax payments can lead to costly interest and fees. Plus, any missed or late payments can severely damage credit scores, resulting in higher costs and restrictions on available financing opportunities in the future – it’s important to always remember these risks when considering any loan.
Enter into an invoice finance partnership.
For businesses facing monetary strain, obtaining control over cash flow can be a challenge. Thankfully, a well-planned invoice finance solution can help ease the burden. Invoice finance solutions have many benefits, from improved cash flow to better access to working capital. Through invoice financing, businesses can receive payment for completed work quickly and easily. The money received can then be used to cover any outstanding debt or expenses such as tax bills. This allows businesses the breathing room they need while they focus on increasing revenue streams in order to sustain their operations.
Key benefits of invoice finance.
Did you know that an invoice finance facility …
- such as factoring takes away the stress of credit control and chasing payments due from your customers. This means that you can instead focus on your business and leave the credit control to a professional team.
- can provide businesses with around 80-90% of the value of invoices straight away and receive the balance (less fees) when their customer pays.
- can be used even if you’ve been previously rejected by the bank or have only recently started trading.
- helps you bridge the gap between invoicing and receiving the final payment.
- helps manage peaks and troughs in cash flow as your business grows.
- is a viable low-cost finance solution for growing businesses.
- allows access to cash quickly – No need to wait 30, 60, 90 days or more for customers to pay.
- gives the ability to free up time spent chasing late payments.
- improves your business cash flow and working capital.
- is easy to access with a straightforward and short application process.
- it’s flexible; you choose which customers you want to factor.
- doesn’t require other assets or collateral.
And, to dispel any misconceptions, invoice finance shouldn’t be viewed as a final option for businesses seeking financial help. Instead, it should serve as one of their first choices due to its extensive list of advantages!
Don’t let your tax bill become a burden.
When it comes to paying your business tax bill, time is of the essence, any delay in payment can lead to compounded penalties and interest. One of the worst things that you can do is sit on a large tax bill and bury your head in the sand.
At Partnership Invoice Finance we offer tailored invoice finance agreements to help businesses with their cash flow. If you’re struggling to pay your taxes, contact us today and let us help you get your business back on track financially.