Corporation Tax bridging finance
Profitable trading, cash stretched at Corporation Tax due-date is a common UK limited company situation. The classic example: long debtor days, year-end stock investment, or capital purchase has consumed cash while the accounting profit (and therefore the CT bill) is real. A bridge facility pays HMRC on the due date and is repaid as cash catches up.
TTP vs Corporation Tax bridge, cost and speed
| Route | Cost | Speed to arrange | HMRC compliance record |
|---|---|---|---|
| HMRC Time to Pay | 7.75% APR (Bank of England base rate + 4%, as of 9 Jan 2026) | Apply direct with HMRC, days to weeks | Shows as an active TTP arrangement |
| CT bridge, secured | ~6% to 12% APR (0.5% to 1.0% per month) | 3 to 6 weeks (legal and valuation work) | Clean, HMRC paid on time |
| CT bridge, unsecured | ~9.6% to 24% APR (0.8% to 2.0% per month) | Decision in 24 to 72 hours, drawdown in 5 to 10 working days | Clean, HMRC paid on time |
Bridge rates are illustrative panel ranges, not quotes; confirm actual pricing per lender. HMRC rate moves with the Bank of England base rate.
When a CT bridge makes more sense than TTP
- You expect to refinance the business, raise equity, or exit within 18 months. A clean HMRC compliance record matters to incoming lenders and acquirers.
- The cashflow shortfall is timing-driven (a known receipt or asset disposal will land in 3 to 9 months), not a structural decline.
- You can offer security and the bridge prices close to or below TTP on rate, or you value the clean HMRC record enough that a higher unsecured rate is worth paying.
- You want to avoid HMRC repeatedly reviewing your file (the TTP renewal cycle).
When TTP is the better answer
- The amount is small (under £10k) and the broker fee on a bridge makes it uneconomic.
- The cashflow recovery is uncertain or longer than 12 months.
- You have no objection to TTP on your HMRC record and no upcoming refinance event.
FAQs
What is a Corporation Tax bridge?
A short-term loan (3 to 12 months) used to pay a Corporation Tax bill on the due date when cashflow is temporarily tight. Common for profitable but cash-stretched limited companies where the accounting profit is real but the corresponding cash has not yet landed (long debtor days, stock investment, capital purchase).
How does this compare to HMRC Time To Pay (TTP)?
TTP is an arrangement with HMRC directly: 6 to 12 months, interest at the HMRC late-payment rate (Bank of England base rate plus 4%, 7.75% as of 9 January 2026 and moving with base rate), no broker fee, shows on your HMRC compliance record. A secured Corporation Tax bridge can price close to that; an unsecured bridge usually costs more on rate alone.
Either way it keeps you in good standing with HMRC and off your compliance record, and adds a lender to your stack rather than a mark against your tax history. For companies expecting to refinance or sell within 18 months, that clean HMRC record matters more than the rate gap.
What rate should I expect?
Unsecured bridge for an established limited company: 0.8% to 2.0% per month, depending on the lender, ticket size and trading position. Secured against assets or a residential property: 0.5% to 1.0% per month. Against HMRC late-payment interest of ~7.75% APR (Bank of England base rate plus 4%, as of 9 January 2026), a secured bridge at the low end (0.5%/month, ~6% APR) is comparable or cheaper; an unsecured bridge (9.6% to 24% APR) usually costs more on rate.
The case for a bridge over TTP is then record-keeping and stakeholder optics, not price, unless you qualify for secured terms.
How quickly can a CT bridge be arranged?
Decision in 24 to 72 hours, drawdown in 5 to 10 working days for unsecured. Secured against property is slower (3 to 6 weeks) because of legal and valuation work. If the deadline is inside 14 days, unsecured is usually the only realistic option.
How do I repay the bridge?
Monthly interest payments through the term, balloon repayment at month 6, 9 or 12 from cashflow, refinance proceeds, or the next Corporation Tax return. Some lenders structure as equal monthly instalments instead.
Will the lender pay HMRC direct?
Most specialist CT bridge lenders fund into your business account on drawdown; you settle HMRC yourself with the cleared funds, usually same or next working day. A few lenders will pay HMRC direct on request to keep timing clean.
To get matched to CT bridging specialists: eligibility checker. Limited companies, LLPs and partnerships of 4+ only.
If the CT bill includes an S455 charge on an overdrawn director's loan, run the S455 director's loan bridge calculator first: clearing the balance before the 9-month deadline can remove that part of the bill entirely.