Corporation Tax Funding vs Your Overdraft — A Practical Comparison
An overdraft is designed to absorb short-term liquidity fluctuations — not large, predictable, annual tax liabilities. When it is used for corporation tax, headroom drops immediately, daily interest accrues, and the firm’s ability to handle unexpected events reduces proportionally. The overdraft is doing the wrong job. A structured corporation tax facility converts the liability into equal monthly instalments over up to 12 months. The overdraft stays untouched. Headroom is preserved for the things that genuinely need it.
