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Why Tax Funding can be Beneficial to SMEs and Sole Traders

As an SME or sole trader, you may find that tax deadlines loom over you, with the threat of eating up your cash flow and hindering the success and progress of your enterprise. 

It’s not unusual for businesses to struggle during these times, either with the affordability of their tax bill or being able to continue to invest in their business with limited cash flow. 

Fortunately, your tax obligations don’t need to be a headache. There’s an effective solution in the form of tax funding, which allows you to spread the cost of tax payments and continue your operation without financial strain. 

In this blog, our experts at Jones & Co delve into the various tax funding options that are available to SMEs and sole traders and the many business benefits.

What is tax funding?

Tax funding is a versatile and strategic solution designed to reduce the burden of tax payments in order to preserve crucial cash flow. The lender steps in to provide the necessary funds to cover outstanding tax payments, and you, in turn, repay these funds through affordable monthly repayments.

What tax obligations are tax funding available for?

Tax loans for the following tax obligations are common and an effective way to ensure healthy cash flow in the face of a substantial tax bill: 

  • • VAT 
  • • Corporation Tax 
  • • Personal Tax (self-assessment)
solicitor pointing at a contract - business finance specialist Jones & Co

What are the benefits of tax funding?

Aside from reducing the stress of upcoming tax deadlines, knowing that you will be able to pay them, there numerous business benefits to utilising tax funding, including: 


Cash flow management

One of the most significant challenges SMEs and sole traders face during tax deadlines is cash flow. While your tax obligations may be met, this doesn’t resolve issues you may have with cash flow management after, hindering your ability to invest in growth or handle unexpected expenses. 

Tax loans enable businesses to fulfil their tax obligations without facing a substantial dent in their cash flow.


Strategic investment 

With the cash flow that would have been earmarked for tax payments, you can instead consider making strategic investments in your business. From upgrading technology to branching out and creating new product lines, tax funding gives you the freedom to seize opportunities and stay ahead in the market.


Financial planning

Once you know that there is a reliable source for tax payments, you can make financial decisions that ensure long-term success. With a clear idea of your budget, you can allocate resources and set realistic goals with peace of mind.


Rapid turnarounds 

At Jones & Co, we understand that when it comes to tax deadlines, the last thing you want to deal with is a time-consuming and sluggish application process. That’s why our tax funding decisions are typically made within 24 hours, giving you quick access to funds that enable timely tax payments and reduced financial stress.


Flexible repayment options

There’s no point in alleviating one financial burden only to take on another, which is why our tax funding options allow you to spread the cost of your repayments. 

Corporation tax and self-assessment tax loans are spread over 6-12 months, and VAT tax loans are spread over 3 months, which means you won’t have to worry about future issues with cash flow.


Funding historic tax/arrears 

Another significant advantage of our tax funding options is that they are not limited to your present situation. They can also be applied to historic tax or arrears that are yet to be paid, giving you a boost when you need it most.

Tax Funding Solutions from Jones & Co

Navigating your business tax bill and tax funding options can be an incredibly daunting task, but it doesn’t have to be that way. 

At Jones & Co, we have over 25 years of experience as business finance brokers, assisting SMEs and sole traders to fulfil their tax obligations and preserve their crucial cash flow. 

Our friendly and professional team are on hand to cut out all of the over-complicated processes and applications, to provide you with tailored advice for you and your unique business needs. With our wide network of private and boutique funders, we’re here to find the perfect tax funding solution for you. 

To find out more about our tax funding services, or to book a no-obligation consultation, don’t hesitate to get in touch with one of our business finance specialists today.



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