SMEs are increasingly looking to spread the cost of their tax bills as they grapple with higher rates, new data from Premium Credit suggests.
It saw a 20% rise in the number of companies it helps spread the cost of VAT, corporation tax and self-assessment tax payments last year and a 24% rise in total lending from the previous year as tax increases including Employers’ National Insurance hit SMEs.
Premium Credit is a funder of tax finance, providing flexible VAT, corporation tax and self-assessment solutions allowing clients to spread the cost of these tax liabilities for up to a year.
Around 40% of Premium Credit’s tax lending last year was for VAT bills with 60% of lending for corporation tax and self-assessment payments. Lending for VAT bills rose 23% last year while non-VAT lending grew by 25%.
Growth in 2025 builds on expansion in previous years – the number of customers has increased 58% since 2023 while total lending has also increased by 58%. Over the past two years non-VAT lending has increased by 61% while VAT lending has grown by 54%.
In 2025, the average size of loan to help pay VAT tax bills was £126,600 – up 17% on the previous year and 25% over two years – while for non-VAT tax bills it was £70,200 compared with nearly £70,000 in the previous year and £73,600 in 2023.
Jennie Hill, Chief Commercial Officer, Premium Credit (Specialist Finance), said:
“Tax rises which took effect last year such as Employers’ National Insurance are having a major impact on SME finances and encouraging companies to look for solutions to help ease cashflow.
“Around £3 billion to £5 billion of tax and VAT liabilities are financed each year which highlights why flexible VAT, corporation tax and self-assessment solutions enabling businesses to spread the cost of annual and quarterly liabilities into convenient monthly payments for up to a year are becoming more popular.”
