I'm caught between a VAT bill and payroll in

2 min read

Both due at onceCash won't stretch

Cover bothShort facility

Fix the calendarSet VAT aside

The collision week

VAT quarters and payroll don't always align kindly. When both land together and cash is tight, you're forced to choose — and neither is a payment you want to miss.

Cover the pinch

A short working-capital facility covers the shortfall so VAT is paid on time and staff are paid in full. Missing either carries a cost — HMRC penalties or lost trust — that dwarfs the finance.

Prevent the repeat

Set VAT aside as it's collected using the method in our how-to on setting money aside for VAT and tax. When the VAT is already ringfenced, the collision disappears.

What it means for you

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online when the numbers work.

Frequently asked questions

Should I pay payroll or VAT first if I can't do both?

Never let it come to that if you can bridge it. Both matter — late VAT brings penalties, late wages destroys trust. A short facility covers both so you don't have to choose.

How do I avoid a VAT and payroll clash?

Ringfence VAT as you collect it so the money is there when the bill falls due. That removes the surprise, and the collision, entirely.