Can pubs spread VAT or corporation tax bills using pub tax / VAT funding?

Summary: Yes — many pubs can spread or fund VAT and corporation tax bills, but the right route depends on the size of the bill, timing, existing borrowing and whether you prefer an HMRC Time to Pay plan or commercial finance. Options include HMRC instalment plans, VAT deferral schemes (exceptional), specialist VAT bridging loans for pubs, short-term business loans and alternatives such as invoice finance or asset finance. Costs, security and eligibility vary widely — compare no‑obligation quotes to find the best match. UK Business Loans is not a lender and does not provide regulated financial advice — we introduce businesses to brokers and lenders. Start a Free Eligibility Check to see what options suit your pub today: Get Quote Now.

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Quick answer — yes, but it depends

Short answer: in many cases it is possible to spread VAT and corporation tax bills. HMRC allows instalment arrangements for some businesses, and a range of specialist commercial products (VAT bridging loans, short-term business loans, invoice finance, merchant cash advances) exist to smooth cashflow. Which is best depends on your VAT/accounting cycle, the size of the liability, whether you can offer security, and how quickly you need funds. Always weigh the cost of commercial finance against HMRC arrangements and seek independent tax or financial advice.

Get a Free Eligibility Check — tell us what you need and we’ll match you to lenders and brokers who specialise in pub VAT and tax funding.

How VAT and corporation tax bills arise for pubs

Pubs face several tax timings that can create large, concentrated cash demands:

• VAT is charged on sales of beer, food and drink and typically reported on quarterly or monthly VAT returns. High seasonal sales or large one-off orders (festival supplies, big events) can push a return into a high payment.
• VAT on purchases and stock: you can reclaim input VAT, but timings and partial exemptions can complicate recoveries, leaving net liabilities.
• Corporation tax is payable by limited companies on profits for their accounting period — often a single sizeable bill per year if profits are strong that period.

The hospitality sector is seasonal and cashflow‑sensitive: stock purchases (kegs, seasonal menus), refurbishments and staffing peaks can all coincide with tax due dates, creating short-term funding gaps.

Ways pubs can spread or fund VAT & corporation tax bills — practical options

1) Talk to HMRC first — Time to Pay (TTP) arrangements

HMRC’s Time to Pay (TTP) facility lets qualifying businesses agree instalment plans for liabilities. Speak to HMRC early — they are more amenable before a debt becomes overdue. TTP can be low-cost compared with commercial finance, but HMRC will assess affordability and may ask for historic returns or bank statements. See HMRC guidance: HMRC Time to Pay.

2) VAT deferral support and government schemes

The UK has run exceptional tax deferral schemes in emergencies (for example in 2020). These are time-limited and rare — don’t assume new deferrals will be available. Check GOV.UK for current announcements and historic scheme details such as corporation tax payment guidance: Pay corporation tax.

3) Pub VAT funding / VAT bridging loans

VAT bridging loans are short-term facilities designed to cover an upcoming VAT bill. Typical features:

• Term: usually a few weeks to a few months.
• Use: to pay an HMRC VAT bill or smooth a quarterly spike.
• Costs: higher interest and arrangement fees than standard loans; early-repayment terms vary.
• Security: lenders may require personal guarantees, charges on business assets or property for larger sums.

Suitable where speed matters and you expect near-term cash inflows to repay. For many pubs, a VAT bridging loan is a pragmatic short-term fix — but compare quotes and terms.

4) Corporation tax funding and business loans

Corporation tax can be funded with short-term business loans, overdrafts or term loans. Options include:

• Short-term unsecured loans for smaller bills (subject to eligibility).
• Secured business loans for larger sums — may use property or equipment as collateral.
• Overdrafts or revolving facilities to manage timing differences.

Commercial finance is usually faster than negotiating new HMRC terms but costs more. It may suit businesses that expect continued profitability and can support repayments.

5) Alternative solutions: invoice finance, asset finance, merchant cash advance

Other routes to release cash:

• Invoice finance (factoring/discounting) — convert unpaid trade receivables into immediate cash (useful if you supply catering or events with invoices).
• Asset finance — release capital tied in equipment; leaseback can free up cash.
• Merchant cash advances — quick cash repaid via a percentage of card takings; expensive and variable cost but can match seasonal trading patterns.

These products can indirectly free funds to pay tax, but each has cost and covenant implications — read terms carefully.

Get Quote Now — Free Eligibility Check to see which product lenders recommend for your pub’s circumstances.

Costs, risks and what lenders look for

Typical cost and risk considerations:

• Interest & fees: short-term and specialist finance normally costs more than standard bank loans. Rates and fees depend on size, term, credit profile and security provided.
• Security & guarantees: many lenders ask for personal guarantees or charges on property for larger facilities — this raises personal risk for directors.
• Consequences of default: missed repayments can lead to charges being enforced, repossession of assets, or accelerated demands by HMRC if you’ve not agreed terms.
• HMRC penalties: failing to agree TTP or missing returns attracts interest and penalties — always factor HMRC interest into cost comparisons.

Underwriting checklist (what lenders typically assess): turnover, recent profitability, bank statements, VAT return history, tenancy or lease/licence terms, value of stock & casks, director credit history and any existing charges.

How to prepare — documents & data lenders/brokers want

Have these ready to speed the process:

• Business details: company registration, trading address, length of trading.
• Latest 12 months bank statements (business), recent VAT returns, latest accounts and management P&L.
• Forecast cashflow showing ability to repay instalments.
• Lease or tenancy agreement, premises licence and stock valuation (casks & cellar assets).
• Director ID and contact details; details of existing borrowings and any outstanding charges.

Being organised helps brokers deliver quick, accurate quotes.

When to choose HMRC TTP vs commercial financing

Decision guide:

• Size & cost: if HMRC will accept a manageable instalment plan, it’s often the cheapest option. Start there.
• Speed: commercial lenders can be faster for urgent payments but cost more.
• Security willingness: if you can’t or won’t offer security, smaller unsecured business loans or merchant advances may be options but at higher cost.
• Credit & future borrowing: consider long-term effects — some commercial facilities can limit future borrowing or require cross‑collateralisation.

Practical rule: contact HMRC early; if HMRC’s terms are unsuitable or too slow, compare commercial quotes via a broker. You can also combine approaches (short-term bridging to buy time to negotiate TTP).

How UK Business Loans helps pubs

UK Business Loans connects pubs to specialist brokers and lenders that understand hospitality cashflow and pub operations. Our process:

1. Complete a short enquiry — takes under 2 minutes.
2. We match you to lenders/brokers who specialise in pub VAT funding and tax solutions.
3. You receive no-obligation quotes — compare costs, terms and speed before deciding.

We are an introducer — UK Business Loans is not a lender and does not provide regulated financial advice — we introduce businesses to brokers and lenders. The enquiry form is an information form only (not an application) used to match your pub to suitable providers. Get Started — Free Eligibility Check.

For broader pub funding needs — refurbishment, stock or seasonal finance — see our industry overview on pubs business loans.

FAQs

Can I use a standard business loan to pay VAT?

Yes — many pubs use short-term business loans or overdrafts to cover VAT or corporation tax bills. Pros: speed and flexibility. Cons: higher cost than HMRC TTP and may require security.

Will borrowing affect my company credit?

Initial broker matches are usually via soft enquiries. Lenders perform hard credit checks at application stage which can affect credit records. Discuss with a broker how checks are handled.

Can HMRC force me to use a commercial loan?

No — HMRC will pursue unpaid tax through collection and enforcement; they do not require commercial borrowing. However, if you cannot pay, HMRC may seek full payment and take enforcement action if no arrangement is agreed.

How quickly can I get funding?

Some specialist lenders and brokers can provide quotes within hours and funds within days to a couple of weeks after checks and paperwork. HMRC TTP timelines vary by case — early contact speeds decisions.

Do I usually need to secure loans against my pub?

For larger amounts it is common for lenders to request security (property charge, director guarantees). Smaller bridging loans may be unsecured but carry higher rates.

Still unsure? Start your Free Eligibility Check and we’ll match you with lenders/brokers who can outline firm options.

Legal & compliance

Warning: HMRC penalties and interest may apply for late tax payments. This content is general information only and not tax advice. Always consider independent advice from your accountant or HMRC for tax-specific decisions.

Important: UK Business Loans is not a lender and does not provide regulated financial advice — we introduce businesses to brokers and lenders. Terms, eligibility and costs vary by provider. Completing the enquiry form is not an application — it simply helps us match your pub to suitable lenders/brokers.

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1. Can pubs spread VAT or corporation tax bills? — Yes — pubs can often spread tax bills via HMRC Time to Pay arrangements or commercial options like VAT bridging loans, short‑term business loans, overdrafts and alternative finance depending on liability size and timing.

2. What is a VAT bridging loan and is it suitable for pubs? — A VAT bridging loan is short‑term finance to cover an upcoming VAT bill and can suit pubs needing quick cash until takings arrive, though it typically carries higher fees and may require guarantees or security.

3. Should I contact HMRC or use commercial finance first? — Contact HMRC early to explore a usually cheaper Time to Pay plan, and if that’s unsuitable or too slow, compare commercial quotes via a broker or use short‑term bridging to buy negotiation time.

4. How quickly can I get funding to pay a VAT or corporation tax bill? — Specialist lenders and brokers can often provide quotes within hours and funds within days to a couple of weeks, while HMRC TTP timings vary by case.

5. Will submitting an enquiry affect my company credit score? — No — submitting a free eligibility enquiry is a soft check that won’t affect your credit score, although lenders may perform hard credit checks later if you proceed.

6. Do I need to secure tax‑funding loans against my pub or personal assets? — Larger facilities commonly require security such as property charges or director guarantees, whereas smaller unsecured options exist but usually at higher cost.

7. What documents will lenders and brokers typically ask for? — Expect to provide company details, 12 months’ business bank statements, recent VAT returns, latest accounts/management P&L, a cashflow forecast, lease/licence details and director ID.

8. Can invoice finance, asset finance or merchant cash advances be used to pay tax? — Yes — these products can release working capital to meet VAT or corporation tax bills, but they have different costs, repayment profiles and covenant implications to compare.

9. How much more does commercial funding cost compared with HMRC Time to Pay? — Commercial funding generally costs more due to interest and arrangement fees, so always compare total fees and repayment terms against any HMRC instalment option.

10. How does UK Business Loans help pubs find tax funding and is the enquiry an application? — UK Business Loans connects pubs to specialist brokers and lenders for free, no‑obligation quotes and the online enquiry is not an application but a soft eligibility check used to match you with suitable providers.