Solving partnership tax headaches

For those who fail to hit the deadline it can mean a penalty or fine as well as the full wrath of HMRC descending upon them, so having the option to finance their income tax bill can be the financial aspirin to a tax headache.

All manner of firms including lawyers, architects, surveyors and accountants (to name but a few) have sought our help. In January this year the Professional Lending team at United Trust Bank helped many partnerships across lots of sectors to settle the first instalment of their  income tax and we’re dealing with many of the same firms again now for the second part.  All of our accredited professional lending brokers know that January and July are the two months of the year when a quick decision from an expert lender to cover a tax bill can be just what a client needs to solve a working capital problem. Even if the partners have the cash on hand, many still prefer to smooth the payment over a longer period rather than pay it in two hits. A professional loan gives them options that a lump sum payment can’t.

To give you an example of a typical case, take this proposal from a firm of Chartered Accountants with well over 100 staff. In January we were approached by their broker seeking a £600k loan over 12 months for the first instalment of the firm’s partner tax bill. We quickly assessed the proposal and decided that as the risk was split between the partners, and as the firm was consistently profitable, we were happy to fund the full amount. Having provided a quick decision and excellent service in January they have returned to us to fund the balance of their income tax liability and we have been happy to oblige.

If you’re a broker with professional firms on your client list, now might be the ideal time to ask if their tax bill is proving a headache, you might just be able to offer them the best medicine.