Income Tax Loans

What Is An Income Tax Loan?

You can raise finance as a way to cover your income tax liabilities. Rather than paying your income tax as a lump sum, as you would usually, you can borrow the outstanding amount to settle your invoice. A lender will cover your income tax liability (often paying HMRC directly), and you will repay your lender over a period of months. Because you will repay your lender a fixed amount, you will have an overview of what you will need to pay each month, and you won’t have the burden of having to settle your income tax as a lump sum. Given your income tax liability can be significant, this is often advantageous, particularly if you want to retain liquidity for other projects or investments.

If you cannot cover your income tax bill, HMRC will charge you penalties and interest, which will accumulate until you have paid off your income tax bill. An income tax loan can help avoid these charges if you cannot get capital together by your income tax payment deadline.

 An income tax loan is a type of short-term finance which usually has a term of twelve months, although it may be less. It is a particularly advantageous financing option for individuals with significant income tax liabilities.