In our Back to Basics series, we recently looked at why missing tax deadlines should never happen. This week, we’re going one step further: making sure the money is there before the deadline hits.

When business is booming, it’s easy to focus on the top line and forget what’s already spoken for. But failing to set aside money for VAT, Corporation Tax or PAYE can quickly turn a strong trading period into a cashflow crisis.

If you’ve ever had to scramble to pay a tax bill, you’ll know the stress it creates. But with a few small, consistent habits, you can protect your business, avoid panic borrowing, and stay well ahead of HMRC.

Why this matters more than you think

One of the most common causes of cashflow problems isn’t slow sales, it’s poor planning. When you spend money that was never really yours, things unravel quickly.

More than 800,000 small businesses were behind on tax payments last year. With HMRC interest now at 7.75% and rising, it’s an expensive mistake. And unlike most creditors, HMRC doesn’t wait.

Setting money aside isn’t a nice-to-have. It’s a basic financial hygiene habit that gives you confidence, clarity and control.

Three habits we encourage (and why they work)

1. Build tax into your cashflow forecasts

Cloud accounting tools like Xero or QuickBooks make it easy to forecast tax liabilities throughout the year, not just at year-end.

Your cashflow model should include:

  • Your next VAT return
  • PAYE and NIC due dates
  • Corporation Tax estimates based on current profit levels

If you’re not seeing this in your numbers, we can help build a real-time forecast that gives you clarity month by month.

Once you’ve got visibility, set up a separate tax savings account and move the money across regularly. Treat it like a non-negotiable cost, because it is.

2. Make VAT schemes work for your cashflow

The way you account for VAT can significantly affect your cash position. The right scheme can ease pressure and keep cash in your business for longer:

  • Cash Accounting – you pay VAT when customers pay you, not when you invoice them
  • Flat Rate Scheme – simplifies VAT and can benefit service-based businesses with low VATable costs

We regularly review VAT schemes for our clients to make sure they’re not paying HMRC sooner than necessary.

3. Get your tax return drafted early, even if you don’t file early

At A4G, we build our systems around helping clients get their information to us early. We send out our annual letter and tax checklist as early as May, encouraging clients to draft their tax returns well in advance.

This matters more than people think. Drafting your return early doesn’t mean you have to file it straight away but it does give you the breathing space to consider your options, plan ahead, and avoid any nasty surprises.

In particular, for those with Payments on Account due in July, drafting early helps ensure you’re not overpaying unnecessarily.

It’s about using the time wisely: more time to prepare, more time to plan, and more time to make informed financial decisions.

It’s not just about tax, it’s about control

Squirrelling money away for tax isn’t just good housekeeping. It’s a sign your business is in control of its finances, not the other way around.

At A4G, we help clients go beyond filing returns. We provide joined-up advice on tax forecasting, profit extraction, cashflow planning and long-term strategy so tax bills never come as a surprise.

Ready to feel more in control?

Get in touch for a quick, no-pressure chat. We’ll help you build a system that works with your business, not against it.

Book my free 1-2-1

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