Corporation Tax Hitting Cashflow: Rescue and Refinance
By Oliver Mackman · Reviewed 2026-04-26
Corporation Tax bill due. Cash is materially short. Profitable business, weak working-capital position.
What this is
Corporation Tax is due 9 months and 1 day after the accounting period end (small companies) or earlier for large companies. The bill reflects last year's profit but is paid this year out of current cashflow. Mismatched timing is the root cause of pressure for growing businesses.
What happens if you do nothing
Late-payment interest from day one. Surcharge penalties stack on persistent default. Eventually winding-up action. The tax inspector's view of the directors' competence shifts after repeated late payment.
Options, in order
- TTP arrangement, HMRC offers it for Corporation Tax on the same basis as VAT and PAYE.
- Working-capital term loan, clean-credit Ltd companies with growth typically secure 6 to 12% APR; competitive vs HMRC TTP interest.
- Asset-backed bridging if commercial property is owned.
- R&D advance, if the company is R&D-active, advance against a filed or about-to-be-filed R&D claim.
Which UK lenders engage
- · Funding Circle, iwoca for clean-credit working capital.
- · Allica Bank, Aldermore for asset-backed deals.
- · Specialist R&D advance lenders for tech, manufacturing and biotech.
HMRC-specific notes
Corporation Tax TTP is more conservative than VAT TTP. HMRC scrutinises whether the underlying profit was real or merely a timing mismatch. Bring management accounts to the negotiation, not just the corporation tax computation.
Do not do this
- · Take a director's loan to pay Corporation Tax then write off the loan. That is a separate Corporation Tax event under section 455.
- · Ignore quarterly instalment payment notices for large companies, they ramp up rapidly.
When to call an advisor before borrowing
Call your accountant before borrowing if R&D credits are due, if the bill is the first material Corporation Tax bill the company has paid, or if the bill exceeds 30% of bank-account cash on hand.
Related
- · All HMRC pressure scenarios
- · Our post-decline routing (if mainstream lenders have declined)
- · After a decline: alternative lenders
Editorial only. We are not an FCA-authorised adviser or licensed insolvency practitioner. For active enforcement action, contact a licensed insolvency practitioner directly.