Corporation Tax Bridging Loan Rates September 2026 — Bridge vs HMRC Time to Pay
- HMRC TTP interest rate — September 2026 (changes quarterly)
- 7.75% p.a.HMRC TTP interest rate — September 2026 (changes quarterly)
- CT bridging loan rate/month — annualised 7.8%–10.8%
- 0.65%–0.90%CT bridging loan rate/month — annualised 7.8%–10.8%
- HMRC TTP has no arrangement fee — pure interest on outstanding balance
- No feeHMRC TTP has no arrangement fee — pure interest on outstanding balance
- When HMRC declines TTP, bridging becomes the primary alternative
- Declined TTPWhen HMRC declines TTP, bridging becomes the primary alternative
Corporation tax bridging loan rates in September 2026 are 0.65%–0.90%/month (the standard business bridging range) — equivalent to approximately 7.8%–10.8% p.a. annualised. The HMRC Time to Pay (TTP) arrangement currently charges 7.75% p.a. with no arrangement fee. In most straightforward cases, HMRC TTP is cheaper than bridging. The bridge becomes the right answer when: HMRC declines TTP (common for businesses with previous late payment history), the business needs to avoid a payment default on its credit file, the speed of cash recovery makes the bridge cost-effective, or HMRC refuses TTP and the alternative is enforcement.
CT Bridge vs HMRC TTP — Cost Comparison September 2026
Swipe the table sideways to see every column.
| CT liability | Bridge (0.80%/month, 9 months) | HMRC TTP (7.75% p.a., 9 months) | Bridge vs TTP | When bridge wins |
|---|---|---|---|---|
| £100,000 | £7,200 interest + £1,500 arrangement + £1,500 legal = £10,200 | £5,813 interest, no fees | TTP cheaper by £4,387 | Only if HMRC declines TTP or speed is critical |
| £250,000 | £18,000 interest + £3,750 arrangement + £2,000 legal = £23,750 | £14,531 interest, no fees | TTP cheaper by £9,219 | Only if HMRC declines TTP |
| £500,000 | £36,000 interest + £7,500 arrangement + £2,500 legal = £46,000 | £29,063 interest, no fees | TTP cheaper by £16,937 | Only if HMRC declines TTP — significant premium |
| Any — TTP declined | Bridge is the primary alternative to HMRC enforcement | Not available — HMRC declined | Bridge wins by definition | Bridge is the only structured option |
What determines your rate
When does HMRC decline Time to Pay?
HMRC will decline a TTP arrangement if the business has: (1) A poor payment history — previous TTP agreements that were defaulted, or repeated late CT payments; (2) Evidence of cash extraction or asset stripping ahead of the tax debt; (3) No credible repayment plan — HMRC needs to believe the business can repay; (4) Outstanding tax debts from multiple years that suggest systemic non-compliance. A business declined for TTP faces enforcement action unless it can fund the CT payment from another source — bridging is typically the most viable alternative.
Payment on account — the January cash pressure
Large companies (with taxable profits above £1.5m) pay CT quarterly in advance. Smaller companies pay 9 months after the year end. For the majority of SMEs, the CT due date (9 months after year end) coincides with the January/February quarterly period — typically a cash-tight time of year. A CT bridging loan aligned to the business's receivables recovery cycle can smooth this payment pressure without disrupting operations. DBF models the repayment timeline against the business's cash forecast.
Property security for CT bridges
CT bridging loans are secured against property — residential or commercial — owned by the company or its directors. The security must be UK property. A director's residential home can be used as security (the bridge then becomes regulated if the director will continue to live there). DBF always identifies the most appropriate security at the initial enquiry stage.
CT bridge exit strategy
The typical CT bridge exits within 6–12 months via: (1) operational cashflow recovery — the business's sales and collections improve and the bridge is repaid from cash generation; (2) asset sale — a business asset or property is sold and proceeds repay the bridge; (3) business finance refinance — the CT bridge is replaced by a revolving credit facility or business loan at a lower long-term rate. DBF assesses exit viability before recommending a bridge.
Worked cost example
- Total
- £13,233
SME, manufacturing sector. CT bill: £185,000. Due date: January 2027.
Business applied for TTP. HMRC declined: previous late payment in 2024.
Business has property (commercial unit) worth £650,000, no mortgage.
CT bridge: £185,000 at 0.78%/month (low LTV: 28.5% of property value).
6-month term. Interest: £8,658. Arrangement fee (1.5%): £2,775. Legal: £1,800.
Alternative — no payment made: HMRC enforcement, distraint risk, potential windfall.
Business credit file impact: significant — affects future bank credit.
Bridge allows: (1) CT paid in full on time. (2) No credit file impact. (3) 6 months for cashflow recovery.
Business repays bridge from Q2 2027 collections. Exit: 5 months (month ahead of schedule).
Total cost: £10,710 (5 months). Saving vs 6-month estimate: £2,523.
Rate context and outlook
HMRC Time to Pay interest rate: 7.75% p.a. (current, September 2026). This rate changes quarterly — check HMRC's website for the current rate before updating this guide. The Bank of England held its base rate at 3.75% on 30 July 2026 in a divided 6-3 vote. Three MPC members voted to raise to 4.0%. Next decision: 17 September 2026. DBF arranges corporation tax bridging loans for businesses that cannot access HMRC TTP or where the timing of the CT payment creates an acute cash pressure. The security can be any UK property — commercial, residential, or mixed-use — owned by the company or a director personally. DBF also reviews whether a business's CT payment timing can be managed through the payment on account system.
Frequently asked questions
What rate does a corporation tax bridging loan cost?
CT bridging loan rates are 0.65%–0.90%/month (annualised 7.8%–10.8%). Arrangement fees: 1.5%–2%. Legal costs: £1,500–£2,500 depending on security. Total cost over 6 months on a £200,000 bridge: approximately £11,000–£14,000.
Is a CT bridge cheaper than HMRC Time to Pay?
In most cases, HMRC TTP is cheaper — it charges 7.75% p.a. with no arrangement fee. A bridge at 0.80%/month is approximately 9.6% p.a. plus fees. Use a CT bridge when: HMRC has declined TTP, the business needs to prevent a credit file impact from an HMRC default, or the business can repay the bridge quickly from recoverable receivables making the short-term cost acceptable.
What security do I need for a CT bridging loan?
UK property — commercial, residential, or mixed-use — owned by the company or a director personally. The LTV must be within the lender's appetite (typically 65%–70% maximum). A director's personal home can be used as security, though this creates additional risk for the director and triggers regulated bridging requirements.
How quickly can a CT bridge complete?
Standard CT bridges complete in 7–14 working days. Where the CT deadline is imminent, DBF can often accelerate to 5–10 working days for straightforward security. The faster the timeline, the more important it is to have all documentation ready before approaching lenders — DBF prepares the full application pack at the start of every enquiry.
Can I use a bridging loan to pay HMRC if I have a payment plan already?
Yes — a bridge can pay off an existing HMRC payment plan in a lump sum if the business needs to remove the HMRC charge from its record (e.g. before a business sale or refinancing). DBF arranges bridges for this purpose alongside bridges for initial CT payment.
Get a personalised rate comparison for your case
Independent whole-of-market advice · FCA No. 814533