Business Tax Changes Explained: How They Impact Your Next Finance Application

While the Budget set out a direction for tax policy, not all the details were finalised. Labour insists their approach will create long term stability. The Conservatives worry about potential tax rises for businesses. Kemi Badenoch argued that SMEs already struggling with costs cannot take further financial pressure.

Lenders are responding by updating models and stress tests, but cautiously. They know tax influences cashflow which directly influences affordability.

Take the example of a client who benefited from capital allowances last year. This helped them secure asset finance with improved affordability. After the new Budget, they were able to demonstrate even stronger cashflow, helping them negotiate better repayment terms.

On the other hand, a consultancy paused their growth loan application because their accountant warned that upcoming tax changes could impact their take-home profits. The lender agreed that waiting for clarity might be the most responsible decision.

Comparing this to previous years, we see that tax uncertainty can slow borrowing. In contrast, generous investment allowances often unlock lending.

If you want help understanding how tax changes influence your borrowing potential, email pa@otiumpartners.com.