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Updated: 26 February 2025
The end of the tax year is fast approaching, and you might be wondering how to handle those upcoming tax and VAT payments without putting a strain on your business. The solution might be simpler than you think. But first, let’s talk about the different types of taxes that businesses might have to pay.
Running a business means keeping on top of various tax obligations throughout the year. Knowing what you need to pay and when can help you plan ahead and manage your cash flow more effectively.
If you run a limited company, you’ll need to pay corporation tax on your profits. This is usually due 9 months and 1 day after your company’s financial year ends. It’s a significant annual payment that requires planning, especially as you can’t pay it in instalments directly with HMRC. Many businesses, however, choose to spread the cost using a corporation tax payment plan through options like FlexiPay.
Once your business turnover reaches £90,000, you’ll need to register for VAT. You’ll then submit quarterly VAT returns and payments to HMRC. These regular payments can create pressure points in your cash flow, particularly if you’re waiting on customer payments or have other big expenses due.
If you employ staff, you’ll need to pay PAYE (Pay As You Earn) and National Insurance Contributions (NIC) monthly. Payments need to be accurate and on time to avoid penalties, and they can be substantial if you have several employees.
For businesses operating from commercial premises, business rates are typically paid monthly over 10 months. The amount varies depending on your property’s rateable value and location, but it’s another regular payment to factor into your planning.
Sole traders and business partners need to submit a Self Assessment tax return and pay any tax due by 31st January each year, with potential payments on account in July. This can mean managing two significant tax bills annually.
Tax payments can make a real dent in your business’s cash flow throughout the year. Whether it’s paying the end of year tax return, quarterly VAT, monthly PAYE or annual corporation tax, these large bills often crop up just when you need your money for other expenses.
If you miss them or are late in paying, you face hefty fines and penalties that could set your business back. That’s the last thing you want or need.
It’s a familiar story. You might be ready to take advantage of a promising deal on bulk stock, or your equipment needs an upgrade, but there’s a tax payment on the horizon. Even if you plan for it, the costs can still be a hindrance.
FlexiPay from Funding Circle gives you a more flexible way to cover tax and VAT bills, freeing up your cash flow in the process and helping you to plan ahead. Make the payment directly to HMRC from your online account or app. Then, choose to spread this payment over 1, 3, 6, 9, or 12 months for a simple flat fee, starting from 1.5%. The payments will be made in your name, so you have nothing more to worry about.
Here’s how FlexiPay works for tax payments:
You can use FlexiPay for any HMRC payment, including Self Assessment payments on account and National Insurance contributions. Stay on top of tax payments while keeping money available for your business. Whether you’re planning investments, dealing with seasonal ups and downs or identifying chances to grow the business, you decide how to balance your cash flow.
You want to make tax payments on time and avoid getting a fine, but you also need to make decisions that work for your broader business strategy. By spreading tax payments with FlexiPay, you can think more deliberately about when and how you use your available cash, particularly as you plan for the new tax year.
Rather than holding back large sums for tax bills, you can maintain a steady cash flow throughout the year. Going down this route could help you get ready for opportunities when they arise, from discounts for bulk-buying to timely investments in equipment or staff.
When you spread tax payments, your working capital stays available to grow your business. Whether that’s investing in new stock for spring or upgrading equipment, you decide where your money can have the biggest impact.
Choose payment terms that align with your business cycles. If you know certain months are stronger for cash flow, you can structure your repayments accordingly and help to smooth out seasonal variations.
While FlexiPay is a great solution for managing tax and VAT payments, it’s also available for all your other business expenses too. It combines the convenience of a credit card with the flexibility of a line of credit, giving you the freedom to manage business payments in a way that suits your needs.
Whether you need to make card payments on the go or transfer money directly to a supplier or your business bank account, FlexiPay gives you quick access to credit when you need it most.
Use FlexiPay for:
Having this flexibility means you can use FlexiPay whenever you need to manage larger costs or time your payments more effectively. You’re also not just limited to tax payments. The same simple fee structure and flexible repayment terms apply to all your transactions, whether you’re paying HMRC or ordering new stock for your business. As a result, you get more control over your overall cash flow management.
With FlexiPay, you can keep your business moving forward while managing your tax commitments. Apply online in minutes to check your credit limit (there’s no impact on your credit score for limited companies), and enjoy more flexibility when it comes to tax and VAT.
26/02/25: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.
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