How do I plan for a large tax bill? — Answers

2 min read

Save monthlySinking fund

Forecast timingNo surprises

Bridge if neededShort-term finance

How to plan

VAT and corporation-tax bills are predictable, so treat them as a monthly sinking fund: set aside a slice of each month's income into a separate pot so the money is ready when the bill lands. Build the tax dates into your cash-flow forecast so they never catch you out. The corporation-tax and VAT calculators help you size them.

If a bill lands early

If a large bill arrives before your fund is ready, short-term finance bridges it — a VAT loan spreads the cost, or a revolving facility covers it flexibly. That's far better than missing an HMRC deadline. But the aim is to make the fund the norm and finance the exception, so tax stops being a recurring cash shock.

What it means for you

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.

Frequently asked questions

How much should I set aside for tax each month?

Estimate your annual VAT and corporation-tax liability and divide by twelve, then transfer that to a separate account monthly. Adjust as profits change. Having the money ring-fenced means the bill is covered when it lands.

What if I can't cover a tax bill?

Contact HMRC early — a Time to Pay arrangement may be possible — and consider short-term finance like a VAT loan or facility to bridge it. Never ignore a tax deadline; engaging early keeps options open.