This page is about borrowing to pay your PAYE bill on time
If you've already missed a payment and need to negotiate a payment plan with HMRC, see HMRC Time to Pay loans. If you want to refinance an existing HMRC payment plan, that page covers it too.
Why PAYE creates monthly cash flow pressure
PAYE is the largest recurring tax bill most employers face. Every month, income tax, employee National Insurance, and employer National Insurance all leave the business at once, on a fixed deadline. For employers with payroll above £1,500 a month, there is no quarterly option, so the pressure repeats every 30 days regardless of how your sales cycle moves.
Monthly deadline, no flexibility
Most employers must pay PAYE by the 22nd of every tax month. Tax months run 6th to 5th, not calendar months, so the deadline doesn't always line up with when your customers actually pay you.
Penalties scale fast
HMRC charges daily interest from day one of any late payment. After your first default in a tax year, every subsequent late payment triggers a penalty of 1% to 4% of the amount due. Anything more than 6 months late adds a further 5%.
Quarterly option is narrow
Only employers with an average monthly PAYE bill of £1,500 or less can pay quarterly. For most growing businesses, monthly is the only option from the moment the payroll exceeds a few staff.
Who PAYE finance is for
If your monthly PAYE bill has grown faster than your cash flow, or if a slow-paying customer is putting this month's payment at risk, PAYE finance lets you settle HMRC on time and spread the cost over a manageable term.
Growing employers
You've added staff in the last 12 months and the PAYE bill has stepped up. Cash flow hasn't caught up with the new payroll size yet.
Seasonal businesses
Your revenue lands unevenly across the year (hospitality, construction, retail, event services) but PAYE is due every month at the same level.
Customer-payment delays
A large customer is late paying an invoice and your PAYE bill is due on the 22nd. You don't want to draw on overdraft or burn supplier goodwill by paying them late instead.
Avoiding penalty escalation
You've already had one default this tax year and can't afford a second. Borrowing to pay HMRC on time is cheaper than triggering the percentage penalty.
How PAYE finance works
Funding Flow places PAYE finance with lenders who specialise in tax-bill funding. The product is unsecured, repayable over 3 to 12 months, and structured so the loan settles HMRC directly or pays into your business account on the same working day.
Tell us your PAYE bill
60-second online form. We need your latest PAYE figure, monthly turnover, and how many months you want to spread it over.
We match the lender
Our panel of 50+ lenders includes specialists in HMRC tax-bill funding. We send your application to the ones most likely to approve at the best rate.
Decision in 24 to 48 hours
Most decisions come back within one to two working days. Larger amounts may need a short underwriting call.
Funds settle HMRC or land in your account
Funds can be paid directly to HMRC against your PAYE reference, or into your business account so you can pay HMRC yourself. Same working day in most cases.
Eligibility
PAYE finance is available to UK limited companies, LLPs, sole traders, and partnerships. Lenders look at trading history, recent turnover, and whether your wider tax position is in order.
Trading at least 6 months
Most lenders require a minimum trading history of 6 months. New start-ups will usually need to look at director-guarantee or alternative funding routes.
Up-to-date filings
Companies House filings and HMRC submissions should be current. A late confirmation statement or overdue VAT return can slow approval.
No active enforcement action
If HMRC has already issued a 7-day notice, distraint warning, or winding-up petition, the application route is different. Talk to us first.
UK trading entity
Available to UK-registered businesses. Overseas parents are fine as long as the trading entity itself is UK-based.
Key benefits
The cost of borrowing for PAYE is almost always cheaper than the combined cost of HMRC penalties and interest, especially after the first default in a tax year.
Avoid penalty escalation
Pay HMRC on time and you avoid the 1% to 4% default penalty, the daily interest charges, and the 5% surcharges that kick in at 6 and 12 months.
Protect your supplier relationships
You don't have to choose between paying HMRC and paying suppliers. PAYE finance keeps both sides intact.
Match cost to cash flow
Spread a single £20,000 PAYE bill over 6 or 12 months and the monthly outflow becomes manageable instead of a one-off hit.
What you'll need to apply
Latest PAYE figure
The figure from your most recent FPS submission, or your HMRC online account.
3 to 6 months of business bank statements
For most lenders. Open Banking connection speeds this up significantly.
Latest filed accounts
Most recent set, even if abbreviated. Management accounts help if your filed accounts are 12+ months old.
Director ID
Standard KYC: passport or driving licence, plus a proof of address less than 3 months old.
Useful resources
Related at Funding Flow: VAT loans, HMRC Time to Pay loans, tax bill loan calculator.
Official references: gov.uk pay PAYE tax, gov.uk if you cannot pay your tax bill.
Estimate your monthly cost
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VAT / HMRC loan calculator
Estimate your monthly repayments on a tax finance loan. Guide tool only.
£10,000 to £500,000
Illustrative only, not a quote.
Calculations are illustrative only. Actual rates, terms and fees are deal-dependent and vary by lender, business profile, and security. Speak to your broker for a tailored quote.
Frequently asked questions
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