VAT Loans

At Liberis, we offer an award-winning alternative to traditional business loans: a Business Cash Advance. Our customers use us to access the funds they need in advance and pay us when they get paid - with payments taken via an agreed % of their customers' credit and debit card takings.

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Can’t afford to pay VAT? Here’s how to avoid making a late payment

Value Added Tax (VAT) acts as a fundamental building block within the UK’s business infrastructure, as all organisations with a turnover of £85,000 or more are required to register for VAT, to be paid on the sales of goods and services.

Companies are required to fill out a VAT return every quarter and submit it to Her Majesty’s Revenue and Customs (HMRC), but businesses can occasionally run into trouble when it comes to finding the funds to pay a VAT bill. According to data covering the year to the end of September 2019, HMRC filed 4,308 winding up petitions – a number which represents a four-year high and a 6% rise on the previous 12 months.

It is estimated that the VAT gap for 2017-18 was £13.3 billion, meaning 9.6% of the VAT that HMRC expected to receive went unaccounted for. So, what is the reason for this VAT gap? Recent research revealed that SMEs in the UK are owed an average of £23,360 in late payments, which can have a detrimental effect when it comes to making sure they have the ability to pay their VAT bill. Other factors – such as low cash flow, equipment repairs, new stock or other hefty bills – can all leave businesses needing a VAT bridging loan in order to pay their tax bill.

There is more than one way to secure this funding, however, and here at Liberis Finance we’re firm believers in providing a simple, accessible alternative to conventional tax loans in the form of our Business Cash Advance.

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Beverly Botha
The Travelling Cupcake

Trusted provider

  • Provided over £400m in funding

  • Funded over 16k business across the globe

  • Alternative Lender of the Year winner for two years running at the Credit Awards

Flexible payments

  • Pay us as your customers pay you. Paymments are made automatically via a small percentage of your customer card transactions

  • One, agreed upon cost that never changes

  • No hidden fees or penalties.

Ongoing support

  • You know your business; we know finance - that's why we always listen carefully to offer you the best finance deals for your needs


  • 9/10 of our customers actively recommend us to others

What is a VAT loan?

VAT loans, or tax loans, can be taken out by businesses to help them pay a VAT bill. They can be especially beneficial to enterprises who may not have the capital to cover their bill at that particular time, and the short-term funding boost can prove a useful solution when it comes to paying HMRC what it is owed. A VAT bridging loan can help a business to settle its tax bill on time and avoid possible penalties, which could further damage its financial health.

How does a VAT bridging loan work?

Business VAT loans enable your company to secure finance on a short-term basis in order to settle any outstanding VAT bill. Some lenders will settle your VAT bill with HMRC directly, while others will provide you the funds to do so. You will then repay the amount over a set period of time, which may vary depending on your choice of lender.

Additionally, the lender you select may also determine whether your VAT loan is secured or unsecured. A tax bill loan can be used as a form of rolling credit, ensuring a business has access to funds on a more regular basis, which should help to mitigate against the nasty surprise of any unforeseen VAT bill. A business VAT loan is repaid over an agreed period of time, with interest to pay on top of the initial amount.

Those interest payments can soon stack up, meaning that although this form of funding may seem like a flexible solution in the short term, the long-term effects must also be taken into account. With that in mind, here at Liberis we offer an alternative to the traditional VAT bridging loan in the form of our Business Cash Advance.

It too provides much-needed capital in the immediate term, but comes without the drawbacks of fixed deadlines or penalties for late payments to Liberis, as you pay us when your customers pay you.

Traditional VAT loan vs Business Cash Advance

Companies of all sizes can be affected by a hefty or surprise VAT bill, especially if it’s due at a time when cash flow is already low, or other overheads to be paid at the same time mean that the financial picture looks a little bleak.

To that end, a business loan for VAT can seem like an attractive proposition, as it covers your payment to HMRC and frees up capital for other outgoings that may be attached to your business. But a conventional VAT loan may not always be the ideal solution – the interest rates can make them expensive, while there may be penalties and further costs incurred if you are unable to make your repayments on time.

All of this can leave your company in a deeper financial hole, but that doesn’t have to be the case, which is where our Business Cash Advance comes in. A Business Cash Advance from Liberis is paid off in line with your future credit and debit card sales. So, if you’ve suddenly been hit by a hefty VAT bill and you don’t have the capital to cover it, our Business Cash Advance can provide a more flexible solution than traditional tax loans, which come with fixed repayment periods and potentially expensive interest rates attached.

How does the Business Cash Advance work?

Liberis’ Business Cash Advance is a fast injection of funds into your business, which can be used for any purpose. The funds are paid off through an agreed percentage of your daily credit and debit card transactions. So, if you need to pay a VAT bill but don’t have enough capital available, a Liberis Business Cash Advance can help you cover the costs, fast. Busy month? You’ll clear more of what you owe. Quieter period? You’ll pay us less. It’s that simple.

That also means there are no extra fees or charges, because there’s no such thing as a late repayment, and this advance is an unsecured form of funding, so you can relax safe in the knowledge that your assets will never be at risk. On top of all that, if you change your mind and decide to use the advance elsewhere and pay your VAT bill by other means, that’s fine too – it’s not our place to tell you how to manage your business.

Why choose a Business Cash Advance with Liberis?

These are just some of the reasons why a Business Cash Advance with Liberis can prove a practical, accessible alternative to a conventional VAT loan:

  • Payments to Liberis are made in line with the performance of your business
  • There are no extra fees or penalties, and no fixed monthly payments
  • We’re supported by the UK’s government-owned British Business Bank
  • We have a rating of ‘Excellent’ on Trustpilot
  • 90% of our customers would recommend us to other businesses
  • We were named Alternative Lender of the Year at both the 2018 and 2019 Credit Awards
  • We’ve provided £400 million of funding to more than 16,000 businesses
  • Your MyLiberis account can help you manage your funds online

You don’t have to just take our word for it. Numerous enterprises have benefitted from partnering with Liberis, including The Ivory Wardrobe, a wedding boutique in Woburn Sands run by Laura Buckingham-Brown, who used her Business Cash Advance to address some cash flow challenges:

I really struggled before I found Liberis…It’s such an efficient and easy form of funding and I don’t really notice the pay back…It works really well for the business and makes it easier to budget and manage cash flow. The pay back terms are brilliant because, if I have a quieter month, I don’t have to pay as much back.”

Do you think you could use an alternative to a conventional VAT bridging loan? Then why not get an online quote for your Business Cash Advance today.

Is my business eligible?

Looking for a flexible alternative to a tax bill loan? Our Business Cash Advance could be the answer, and you could be eligible if:

  • You have been in operation for at least 4 months
  • You receive at least £5k in card payments every month

What security will I require?

The beauty of a Liberis Business Cash Advance is that it is an unsecured source of funding, unlike some traditional tax loans. The security is taken out against your future card sales, so you can rest assured that your home will never be at risk.

How do I apply?

Have you decided that a conventional business VAT loan may not prove prudent in the long term? If so, then a Business Cash Advance could be exactly what you need. To get a quote give us a call or click the "GET A QUOTE" button on this page.

Business stories

Here's what some of the small businesses we've funded have to say about Liberis Finance!