Smart Ways to Fund Your Self-Assessment Tax Bill

Many business owners are feeling the pinch this time of year, with self-assessment tax bills landing at their door. Whether you’re facing an unexpectedly large bill, or simply want to spread the cost to protect your cash flow, there are plenty of smart ways to pay your self-assessment tax bill without putting your business under strain.

In this quick guide, we’ll explain what a self-assessment tax bill is, why it’s crucial to pay on time, the different ways to pay - and why a business loan might be the smartest option to fund your self-assessment tax bill.

What is a Self-Assessment Tax Bill?

A self-assessment tax bill is how HMRC collects Income Tax from individuals and businesses with untaxed income. If you’re self-employed, a company director, or receive income outside of PAYE (like dividends or rental earnings), you’re responsible for completing a self-assessment tax return each year.

This bill tells you exactly how much tax and National Insurance you owe. The main deadline is 31 January, following the end of the tax year in April.

Who needs to complete a self-assessment?

You’ll typically receive (or be expected to submit) a self-assessment if you are:

• A sole trader or self-employed person

• A director of a limited company

• Receiving rental income or dividends

• Earning untaxed income over £1,000

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Self-Assessment Key Deadlines

What Happens If You Don’t Pay Your Self-Assessment Tax Bill?

Failing to pay your self-assessment tax bill on time can lead to:

• Immediate penalties and daily interest charges

• Difficulty securing future business loans or finance

• HMRC taking enforcement action to recover debts

This is why it’s so important to have a clear plan for ways to pay your self-assessment before the deadline hits.

Ways to Pay Your Self-Assessment Tax Bill

If you’re wondering how to pay your self-assessment tax bill, here are some common options — each with their own pros and cons.

1. Business loan for self-assessment funding

A business loan to fund your self-assessment tax bill allows you to:

• Keep your personal finances separate
• Maintain healthy cash flow for staff, suppliers and new projects
• Avoid costly late payment penalties from HMRC
• Budget predictably with fixed monthly repayments

It’s also typically quicker than setting other financing options — with business finance specialists like Millbrook, funds can often be arranged in 24 hours, even if your bank says no.

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2. Pay from your cash reserves

The simplest method is to pay outright from your existing cash flow. However, this can tie up funds you may need for operational costs, wages, or growth opportunities. Many profitable businesses still prefer to spread the cost to keep working capital intact.

3. Set up a Time to Pay arrangement with HMRC

If you’ve hit a cash flow snag, you can apply to HMRC to spread your self-assessment bill over up to 12 months. This is best for relatively small amounts and you’ll need to prove affordability. It also doesn’t suit every business — if you’ve needed repeated arrangements, HMRC may decline and it can take much longer to arrange.

4. Use personal borrowing

Some directors reach for personal overdrafts or credit cards, but this mixes business and personal finances, can harm personal credit, and often comes with higher interest rates.

A Quick Comparison: Ways to Pay Your Self-Assessment Tax Bill

Why Choose a Business Loan to Fund Your Self-Assessment Tax Bill?

There are several compelling reasons why many directors and business owners choose a business loan to pay their tax bill:

• Protect working capital: Keep cash in the business for growth, emergencies, or everyday expenses.

• Avoid late fees: Ensures your self-assessment tax bill is paid on time, preventing penalties and safeguarding your credit profile.

• Separate business and personal finances: Avoid dipping into personal overdrafts or savings.

• Quick access: Decisions and funding often completed in days, not weeks.

• Flexible terms: Tailored repayments that fit your business cash flow.

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Typical Business Loan Criteria at Millbrook Business Finance

Here’s what we usually look for when funding self-assessment tax bills. (Don’t worry if you’re not sure — our team reviews every case individually.)

How Millbrook Business Finance Can Help You

At Millbrook, we understand tax bills can place pressure on even the strongest businesses. That’s why we specialise in quick, flexible funding solutions that give you peace of mind. Whether you’re facing a large self-assessment bill or just want to keep cash flow healthy, we’re here to help.

Need funding for your self-assessment tax bill?

If you require further information or assistance in funding your self-assessment tax bill, feel free to reach out to our team at Millbrook Business Finance. We're here to support you to preserve your cashflow.

Interested to see how much you could borrow? Get a quick quote now to explore your options.

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FAQS

FAQs About Paying Your Self-Assessment Tax Bill

Can I use a business loan to pay my personal self-assessment tax?

Yes, many directors and sole traders do this. As long as it’s related to your business earnings, it’s a common use of funds.

What happens if I don’t pay my self-assessment tax bill on time?

You’ll start to incur penalties and daily interest immediately. HMRC can also take enforcement action, so it’s important to explore options like loans if needed.

How quickly can I get funding for my tax bill?

At Millbrook, we can arrange funding in as little as 24 hours, depending on your circumstances.

Still got questions?

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