UK Tax Debt Nears £44bn as SMEs Face Ongoing Cashflow Pressure, Says Match Finance

With UK growth remaining subdued and tax liabilities mounting, SME cashflow management is firmly back in focus, according to leading business funding specialist Match Finance.

Recent performance data from HM Revenue & Customs shows the total tax debt balance standing at £43.8bn in Q2 2025/26, with more than 830,000 customers in Time to Pay arrangements – highlighting the scale of repayment pressure across the UK economy.

At the same time, the latest figures from the Office for National Statistics revealed the economy grew by just 0.1% in the three months to December 2025, reflecting a cautious trading environment for many SMEs. Meanwhile, data from the Bank of England shows the effective interest rate on new SME lending at 6.14% in December 2025, indicating borrowing costs remain elevated despite easing from earlier highs.

Against this backdrop, Match Finance reports a noticeable increase in enquiries relating to VAT loans, corporation tax funding and short-term working capital solutions – particularly from businesses looking to avoid last-minute pressure around HMRC deadlines.

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Bilal Hussain, Director at Match Finance, said:

“We’re speaking to more business owners who are trading steadily but feeling the squeeze from timing gaps — VAT and corporation tax deadlines landing while cash is tied up in stock, payroll, or unpaid invoices.
In most cases, it’s not about long-term borrowing. It’s about protecting cashflow, staying compliant, and avoiding unnecessary penalties or disruption. Acting early gives businesses more control and more options.”

Match Finance provides access to a wide range of funding options including unsecured business loans, VAT loans, corporation tax loans, invoice finance, asset finance and merchant cash advances. For eligible businesses, funding can often be arranged quickly, helping firms bridge short-term gaps without interrupting operations.

The company advises SMEs to:
Forecast tax deadlines alongside rolling cashflow projections
Review debtor days and payment cycles to identify pinch points
Explore funding options before liabilities become urgent.

“With growth modest and margins tighter in some sectors, proactive cashflow planning is essential,” Hussain added. “The earlier businesses assess their position, the stronger their negotiating position tends to be.”

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