Can I refinance VAT or HMRC liabilities into a structured business facility?

Short answer: Sometimes. VAT and other HMRC liabilities can often be included within a wider structured business refinance or consolidation facility — but it depends on lender appetite, whether HMRC has begun enforcement action, existing Time to Pay arrangements, and the overall financial position of the company. UK Business Loans can match you with lenders and brokers who regularly handle HMRC refinancing cases. Using our service is free and no obligation. Submitting an enquiry will not affect your credit score.

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Quick answer — what’s possible?

It is often possible to roll VAT or other HMRC liabilities into a structured business finance facility, but outcomes vary. Many commercial lenders and specialist providers will refinance tax debts as part of a broader debt consolidation or structured term loan when:

• Enforcement action by HMRC has not progressed beyond demands/penalties.
• The business has a credible turnaround plan and demonstrable cashflow to service repayments.
• Security or collateral is available where required (particularly for larger balances).

When HMRC has issued notices of distraint, winding-up petitions or has started seizure, options become more limited and specialist or higher-cost solutions may be required. If you’d like a quick assessment, complete a Free Eligibility Check and we’ll match you to lenders and brokers who deal with VAT/HMRC cases.

How lenders view VAT and HMRC debts

Secured vs unsecured priority debts

VAT and many HMRC tax liabilities are priority debts in UK insolvency law. They are technically unsecured but have statutory priority in some circumstances. Lenders treat them with caution: converting a priority tax debt into a longer-term commercial facility may require the lender to take security elsewhere to protect their position.

HMRC’s priority and enforcement

HMRC can take enforcement steps (statutory demands, distraint, winding-up petitions). If enforcement is underway, conventional bank refinancing is often unavailable. Specialist lenders or brokers experienced in HMRC cases are better placed to negotiate a plan that satisfies HMRC and the finance provider.

Time to Pay (TTP) arrangements

If you already have a Time to Pay agreement with HMRC, some lenders will refinance the outstanding balance if the TTP terms are transferred or if HMRC agrees to a one-off settlement funded by a lender. Clear documentation of the TTP makes a lender more comfortable.

Types of lenders

• High-street and challenger banks (limited appetite for existing HMRC enforcement).
• Specialist commercial refinance lenders (more flexible, may require security or higher rates).
• Invoice finance providers (help with VAT cashflow, but not always a solution for legacy arrears).
• Alternative and non-bank lenders (may accept higher risk at a higher cost).

Common refinancing options that can include VAT/HMRC liabilities

Different products approach HMRC debts in different ways. Below are pragmatic options businesses use to resolve or consolidate VAT and HMRC liabilities.

1. Structured business refinance facility / term loan

What it is: A single term loan that consolidates multiple debts (including VAT/HMRC) into one repayment.

How it works: Lenders assess the company, request HMRC documentation, and may require security (debenture, property). Repayments are spread over months or years.

Pros: Simplifies payments, predictable monthly cost, may reduce immediate cash pressure.

Cons: Can convert short-term priority tax into longer-term secured debt; may increase total interest paid.

2. Invoice finance used alongside refinancing

What it is: Advance against your outstanding invoices to free up cash to pay HMRC.

How it works: Not usually used to refinance legacy HMRC debt directly, but can improve cashflow and avoid creating secured long-term debt.

3. Asset finance / sale & leaseback

What it is: Raise cash by refinancing or selling assets (machinery, vehicles) and using proceeds to settle HMRC.

How it works: Avoids rolling HMRC debt into a loan; useful when sufficient assets exist.

4. Specialist HMRC refinance or tax-lending solutions

What it is: Niche lenders or brokers arrange funding specifically to resolve HMRC liabilities or negotiate on your behalf.

How it works: Often faster acceptance of HMRC cases but at higher cost or with stricter covenants.

Not sure which route fits your business? Speak to a specialist — we’ll match you with solutions and lenders who have experience with HMRC debt. See more about refinance loans and structured options here: refinance loans.

What lenders and brokers need to see

To get a realistic chance of refinancing HMRC liabilities, prepare the following so brokers can make fast, accurate matches:

• Recent management accounts and cashflow forecasts (ideally 12–36 months history).
• Full details of HMRC liabilities: totals, tax periods, penalties, interest, correspondence and any TTP arrangement.
• Bank statements showing trading performance and balances.
• Details of assets or security available (property, plant, debentures).
• Company and director credit history, CCJs, insolvency history.
• Clear purpose and repayment plan for the refinance facility.

Providing complete HMRC paperwork significantly improves the chances of a favourable match.

Costs, interest rates and realistic expectations

Expect wide variability. Pricing depends on lender type, loan size (we typically arrange loans from £10,000 and up), security, company risk and how urgent the case is.

• Interest rates: from competitive market rates for well-secured facilities to higher rates for specialist/high-risk lenders.
• Typical fees: arrangement fees, legal fees, valuation costs, exit or early repayment fees where applicable.
• Timescales: initial match and soft assessment can be within hours; formal offer and due diligence typically 1–4 weeks depending on complexity.

Want to compare terms quickly? Free Eligibility Check — we’ll connect you with lenders to compare fees and terms.

Risks you should know before refinancing HMRC debts

• You may pay more interest overall when converting priority, short-term tax into longer-term finance.
• Providing security or personal guarantees increases director risk if the business fails.
• HMRC may not agree to third-party settlement unless certain conditions are met.
• Inappropriate restructuring may jeopardise existing Time to Pay agreements.

We introduce regulated brokers and lenders who can explain implications in detail — you should also consider independent tax or legal advice for complex cases.

Alternatives to refinancing HMRC liabilities

• Time to Pay (TTP) — negotiate directly with HMRC for instalment arrangements.
• Operational changes — improve cashflow via tighter credit control, cost reductions or price changes.
• Asset disposal or equity raise — sell non-core assets or bring in new capital.
• Insolvency solutions — CVA or formal insolvency routes as last resort (seek insolvency practitioner advice).

Not sure which option is best? Get a free, no-obligation assessment: Free Eligibility Check.

How to proceed — step by step

1. Gather key documents: management accounts, VAT returns, HMRC letters, bank statements and asset lists.
2. Complete our short enquiry form so we can match you with lenders/brokers: Get Quote Now.
3. Matched lenders/brokers contact you for a fast assessment and may request further documents.
4. Compare offers — check interest, fees, security required and any covenants carefully.
5. Accept an offer and progress to due diligence, legal and drawdown stages.

We recommend you review any proposed terms with an accountant or tax adviser before proceeding.

Examples (illustrative)

Example A: A manufacturing SME had £40,000 VAT arrears and stable turnover. A structured term loan secured by a company debenture consolidated the debt and was repaid over 36 months with manageable monthly payments.

Example B: A seasonal retailer faced a VAT shortfall. Invoice finance provided immediate working capital to clear HMRC without converting the liability into long-term secured debt; seasonal turnover covered repayments.

Every case is different — speak to matched lenders for tailored options.

Frequently asked questions

Important information and disclaimer

UK Business Loans does not lend or provide regulated financial advice. We act as an introducer and will share your enquiry with brokers and lenders who may contact you. Using our service is free and no obligation. Submitting an enquiry will not affect your credit score. We recommend seeking independent tax or legal advice when considering refinancing HMRC liabilities.

Ready to find a solution?

Get a free eligibility check and quick quote — no obligation. Complete a short enquiry and we’ll match you with specialist lenders and brokers experienced in HMRC refinancing and structured business finance.

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1. Can I refinance VAT or HMRC liabilities into a structured business facility?
Often — VAT and other HMRC liabilities can be rolled into a structured refinance or consolidation facility if enforcement hasn’t progressed, the business can service repayments and a lender accepts the case.

2. Will submitting an enquiry to UK Business Loans affect my credit score?
No — completing our enquiry form is not a loan application and won’t affect your credit score; lenders may only run credit checks if you progress to an application.

3. What documents do lenders need to consider refinancing HMRC debts?
Lenders typically require recent management accounts, cashflow forecasts, full HMRC paperwork (including any Time to Pay arrangement), bank statements, asset/security details and company/director credit history.

4. How much can I borrow to refinance HMRC liabilities?
We typically arrange refinance and structured facilities from around £10,000 upwards, though available amounts vary by lender, security and case complexity.

5. How long does it take to get a decision or funding for an HMRC refinance?
Initial matching and soft assessments can happen within hours, while formal offers, due diligence and drawdown usually take around 1–4 weeks depending on complexity.

6. Will refinancing my HMRC debt stop HMRC enforcement action?
Only if the refinance provides funds HMRC will accept to settle or replace the liability and enforcement hasn’t reached irreversible stages, so timely negotiation is vital.

7. Do high-street banks handle HMRC refinance cases or are specialist lenders required?
High-street banks have limited appetite for active HMRC enforcement cases, whereas specialist commercial and alternative lenders or brokers often handle these cases but at higher cost or with more security required.

8. What are alternatives to refinancing HMRC liabilities?
Alternatives include negotiating a Time to Pay (TTP) with HMRC, improving cashflow via invoice finance, selling assets or raising equity, or seeking insolvency advice for formal restructuring as a last resort.

9. Will a refinance facility for HMRC debts require security or personal guarantees?
Often — lenders may request company security (debentures, property) or director guarantees for larger or higher-risk HMRC refinance facilities to protect their position.

10. Does UK Business Loans lend directly or provide regulated financial advice?
No — UK Business Loans is a free introducer that connects you with FCA-regulated brokers and lenders but does not lend money or provide regulated financial advice.