As the 2026/27 financial year approaches, many UK businesses are preparing for quarterly VAT payments amid tight margins and rising costs. For 2025-26, the Office for Budget Responsibility estimates that VAT will have raised £179.6 billion*, putting significant pressure on firms’ cash flow. To ease this situation, business can take advantage of a financing solution to help spread the cost of VAT. So far this year the average size of loan paid by Premium Credit to fund VAT bills is £133,000.

For growing firms, VAT can present a particular challenge. Quarterly payments often need to be paid before customer invoices have been settled, putting pressure on working capital. Businesses that have recently crossed the VAT threshold may feel that impact even more sharply.

Karl Leitelmayer, Sales Director – Tax at Premium Credit, said: “VAT is one of the most immediate pressures on cash flow. A single large payment every quarter can unsettle even the most well-run businesses. Structuring those payments differently can help smooth the cycle and protect liquidity.”
Premium Credit’s financing facility allows VAT bills to be paid in monthly instalments, typically over three months in line with the next quarter. Funding for VAT and wider tax liabilities ranges from £10,000 to £15 million, is unsecured, and requires no personal guarantees up to £150,000. Payments can be made directly to HMRC or reimbursed if already settled.

For brokers, VAT funding provides a practical touchpoint with customers at a predictable time of need. With a revolving credit agreement model and commission available, it also supports repeat business, wider growth and long-term relationships for brokers.