Time to Pay Arrangements With HMRC

HMRC operates Time to Pay for individuals, sole traders, partnerships, and companies that cannot pay a tax liability in full by the due date. TTP is available for a range of taxes:

• Self-assessment income tax — including payments on account and balancing payments
• VAT — VAT arrears and amounts due on returns
• PAYE and National Insurance — employer arrears
• Corporation tax — company tax bill arrears

HMRC is more likely to agree TTP if:

• You contact them before the deadline or immediately after missing payment — not after enforcement has started
• You have a genuine reason for inability to pay (cash flow problems, unexpected loss of income, serious illness)
• You have a clear plan to meet future tax obligations on time
• You have not persistently defaulted on previous TTP arrangements

HMRC will ask about your income, outgoings, assets, and any other debts before agreeing a plan. They are a preferential creditor and generally expect repayment within 12 months, though longer periods may be agreed in complex cases.

Note that interest continues to accrue on unpaid tax throughout the TTP period. As of 2025/26, HMRC charges interest at base rate plus 2.5% on late payment of most taxes — this is not waived under TTP.

HMRC's online TTP service — called a 'payment plan' — is available for self-assessment income tax debts of up to £30,000 that are less than 60 days overdue (or for the current tax year). The online service is straightforward and does not require you to speak to an adviser.

To use the online service you must:

• Owe £30,000 or less in total self-assessment tax (including penalties and interest)
• Have no other current TTP arrangement or overdue tax returns with HMRC
• Be within 60 days of the payment deadline (or using it for the current year's liability)

How to set it up:

1. Log in to your HMRC online account via the Government Gateway (gov.uk/pay-self-assessment-tax-bill).
2. Select 'Set up a payment plan' from the options for your outstanding balance.
3. HMRC will show you the available monthly payment amounts and durations. Choose an amount you can reliably afford.
4. Confirm your bank details for direct debit and agree the schedule.

You can usually set up a plan for up to 12 months online, sometimes up to 24 months if HMRC's systems assess you as eligible based on your tax history. The plan starts immediately. You should receive a confirmation letter within a few days.

If your self-assessment debt exceeds £30,000, your debt is more than 60 days overdue, or you have VAT, PAYE, or corporation tax arrears, you must call HMRC to arrange TTP. The relevant helplines are:

• Self-assessment (individuals): 0300 200 3822
• VAT (businesses): 0300 200 3700
• PAYE and employer debts: 0300 200 3200
• Payment support (general): 0300 200 3835 (Business Payment Support Service)

What HMRC will ask you:

• Your tax reference numbers and the amounts owed
• Your income and essential outgoings (rent, utilities, loan payments)
• Your business turnover and cash flow (for business debts)
• Any assets you hold that could be used to pay the debt
• Why you cannot pay in full and what you can afford monthly

Go into the call prepared — have your bank statements, P60 or most recent accounts, and a clear monthly budget ready. HMRC officers have discretion and a well-prepared, honest call typically results in a more favourable arrangement than one where you do not have the figures to hand.

If HMRC refuses a TTP request or makes an offer you cannot meet, you can ask to speak to a technical adviser or make a complaint. In complex cases, a tax adviser or accountant experienced in HMRC negotiations can be invaluable. The Low Incomes Tax Reform Group (LITRG) provides free guidance for people on lower incomes.

Defaulting on a TTP arrangement — by missing a payment or failing to file future tax returns on time — gives HMRC the right to withdraw the arrangement immediately. Once withdrawn:

• The full outstanding balance (including interest accrued during the plan) becomes immediately payable
• HMRC can begin or resume enforcement action without further notice
• A new TTP application will be viewed less favourably

HMRC enforcement tools include:

• Distraint: HMRC officers (or their appointed bailiffs) seize and sell business or personal assets
• County Court or High Court judgment: HMRC obtains a CCJ, which can lead to charging orders on property, attachment of earnings, or third-party debt orders against bank accounts
• Winding-up petition: For company debts, HMRC can petition to wind up the company
• Bankruptcy petition: For individual debts over £5,000, HMRC can petition for your bankruptcy

If you think you are going to miss a TTP payment, call HMRC immediately — do not wait for them to contact you. In most cases, HMRC will agree a short-term modification if you explain your situation promptly and have a plan to get back on track. Proactive communication almost always produces a better outcome than silence.