HMRC Time to Pay (TTP) arrangements
A Time to Pay arrangement is an agreement with HMRC to clear company tax arrears (VAT, PAYE and Corporation Tax) in instalments rather than all at once, usually for up to 12 months, though longer terms are sometimes agreed for larger debts. HMRC will expect the instalments to be genuinely affordable and the company to keep up with new tax as it falls due. HMRC; gov.uk Time to Pay
- What it is
- Paying HMRC arrears in instalments, often for up to 12 months
- Covers
- VAT, PAYE/NIC and Corporation Tax
- HMRC expects
- You also keep up with new tax as it falls due
- Key to acceptance
- Engage early and propose a realistic, affordable figure
Talk it through, free and confidential No obligation. We review your situation and point you to the right next step.
Propose a number you can actually hit
The most common reason a Time to Pay plan fails is over-promising. Work out a sustainable monthly figure from real cash flow first, using our Time to Pay affordability calculator and cash flow runway tool, then propose that to HMRC.
The key to acceptance is engaging early, before enforcement starts, with a realistic figure backed by your actual cash flow rather than an optimistic guess. A well-prepared proposal is far more likely to be agreed. If the company cannot afford even a sensible Time to Pay plan, that is a strong signal the business needs formal rescue or an orderly closure, and a Licensed Insolvency Practitioner can advise on the alternatives.
What a Time to Pay arrangement costs
A Time to Pay arrangement is free to set up, but it isn't interest-free: HMRC charges late payment interest on the outstanding arrears at its published rate for the life of the plan, so the balance you clear is slightly more than the original bill. There is no arrangement fee and no need for an intermediary; companies can propose a plan directly through the Payment Support Service. The interest is usually a price worth paying compared with enforcement, but build it into the affordability sums, which is exactly what the Time to Pay affordability calculator does.
Related data
Our HMRC tax debt figures: The scale of tax debt owed to HMRC, from the National Audit Office. Every page on our data hub names its official source.
Common questions
How long can a Time to Pay arrangement last?
Typically up to 12 months, though HMRC sometimes agrees longer for larger debts. The term has to be realistic and affordable, and you must keep paying new tax on time.
What if I default on a Time to Pay arrangement?
HMRC can cancel the arrangement and resume enforcement, including a winding-up petition. That is why the monthly figure must be sustainable from the start.