BOARD PAPER — COMMERCIAL FINANCE FOR [TAX TYPE] LIABILITY

Date: [DD MONTH YYYY]
Author: [NAME, POSITION]
For decision at: Board meeting, [MEETING DATE]
Decision required by: [DEADLINE — typically the tax due date]


1. PURPOSE

To seek board approval to enter a commercial loan facility of £[LOAN AMOUNT]
to fund the [TAX TYPE] liability of £[BILL AMOUNT] due on [DUE DATE], in
preference to (a) drawing down on existing reserves or (b) paying HMRC late.


2. BACKGROUND

The Company has a [TAX TYPE] liability of £[BILL AMOUNT] falling due on
[DUE DATE]. This is a [recurring quarterly / annual] liability arising from
[brief context — e.g. "Q3 trading at the standard 20% VAT rate on £X of
sales"]. The liability is correctly calculated and undisputed.

Cash position as at [DATE]: £[CURRENT CASH]. Forecast cash position on
[DUE DATE] (excluding any new finance): £[FORECAST CASH], driven primarily
by [the timing of customer receipts X, Y, Z / seasonal trade pattern /
inventory build for Q4].

Settling the bill in full on the due date from existing cash would reduce
working capital headroom to £[STRESS-TESTED HEADROOM], which is below the
board's stated minimum of £[MINIMUM HEADROOM].


3. OPTIONS CONSIDERED

Option A — Pay HMRC on time from cash reserves
  Cost: Nil finance cost; opportunity cost of £[BILL AMOUNT] of working capital
  Risk: Working capital stress; impact on Q[X] inventory build / supplier terms

Option B — Pay HMRC late
  Cost (30 days late): £[2% of bill] late payment penalty + £[interest at 8.25% APR]
        interest = £[TOTAL]
  Cost (60 days late): £[4% of bill] late payment penalty + £[interest] interest
  Risk: Compliance record affected; potential impact on future credit
        applications and lender pricing

Option C — Commercial finance (RECOMMENDED)
  Loan amount: £[LOAN AMOUNT]
  Term: [TERM] months
  Indicative monthly cost: £[MONTHLY REPAYMENT]
  Total cost over term: £[TOTAL COST]
  Lender: To be selected from broker panel; indicative rate confirmed at
          [RATE]% per month plus [SETUP]% setup fee
  Funded direct to HMRC: Yes — no cash flows through the Company

Option D — HMRC Time to Pay arrangement
  Cost: Interest at 8.25% APR for the agreed term (no late payment penalty
        if agreed before day 15)
  Risk: Time to Pay shows on the compliance record; may affect future
        commercial finance applications


4. RECOMMENDATION

That the board approves Option C: a commercial loan of £[LOAN AMOUNT] over
[TERM] months, funded direct to HMRC by [LENDER / via broker], at an
indicative all-in cost of £[TOTAL COST].

This option:
  • Preserves working capital headroom of £[POST-LOAN HEADROOM]
  • Costs less than Option B at any point beyond [BREAK-EVEN DAYS] days late
  • Avoids the compliance footprint of Option D
  • Is repaid against the [SPRING TRADE / NEXT QUARTERLY RECEIPTS / SUMMER
    BILLING CYCLE], aligning the cash outflow with the period of cash inflow


5. RISK SECTION

Repayment risk: Modelled monthly repayment of £[MONTHLY REPAYMENT] is
   [X.X]% of forecast monthly EBITDA across the term. Stress-tested against
   a 20% downside scenario, repayment remains affordable.

Concentration risk: This facility takes total commercial debt to £[TOTAL DEBT],
   representing [X.X]% of [filed turnover / forecast turnover]. Within
   policy limits.

Personal guarantees: [None required / Required from directors as listed below
   — please review and approve separately].


6. DECISION REQUESTED

That the board:
  (a) Approves entering a commercial loan facility of £[LOAN AMOUNT] over
      [TERM] months on the indicative terms set out above;
  (b) Authorises [NAMED DIRECTOR(S)] to sign the loan documentation on
      behalf of the Company;
  (c) Notes that the loan proceeds will be paid direct to HMRC by the lender
      and will not pass through the Company's bank account.


[NAME]
[POSITION]
[DATE]