Short-term tax? The time is now

Johnson Reed
2m read

The January squeeze is over. How did it treat your finances? Periods like these always seem to ask a little extra from us, such as tax payments and VAT demands, draining funds from other sides of the business.

Often, a short-term cash injection can put you right back on track – meaning there’s no need to slow your business goals to recoup cash organically. Below, we discuss why an SME might go down this route.

Income Tax, CGT and VAT obligations

Making Tax Digital (MTD) is changing how we keep tax records and pay what we owe to HMRC. It’s already come into effect for some VAT-registered businesses, but it’s due to be rolled out to Income and Capital Gains Tax too.

This government initiative can also help you spread the financial pressure. For MTD for Income Tax, it’s expected that you’ll be able to opt to pay your tax bill more regularly over the course of a year – instead of waiting until January (or June’s second payment on account).

However, you may still forget to save enough for each deadline. When that happens, a short-term loan is incredibly useful. Within days, you can have the money you need.

This may coincide with a key investment – something you were planning to spend on the business, but otherwise would be swallowed by tax responsibilities. Timing can be everything.

Covering any penalties you’re liable for

It’s easy to lose sight of a tax bill. It’s even easier to let the deadlines slide, until you’re met with a fine. After all, there’s a lot to think about as a business owner; timelines can swiftly run away from you, causing HMRC to issue a late payment or submission penalty.

A short-term loan can come in handy here too, ensuring you escape accruing penalties while you earn the cost back at your own pace.

We regularly secure approved loan requests in a few days. The terms are flexible, taking into consideration what you can afford and over a timescale that suits you. It means you can cover your tax bill and still pay for staff, resupplies, a new website, refurbishment or another positive move for your business – even to offset an invoice that hasn’t come through yet.

Speak to a Johnson Reed representative to discuss your short-term options. We’d be happy to explain more about how we work and introduce you to our specialist lending pool.