HMRC Time to Pay (TTP) arrangements
A Time to Pay arrangement is an agreement with HMRC to clear company tax arrears in instalments rather than all at once, usually over a period of up to 12 months, though longer terms are sometimes agreed for larger debts. It covers VAT, PAYE and Corporation Tax. HMRC will expect the company to keep up with new tax as it falls due as well as paying off the arrears, and to show that the instalments are genuinely affordable. The key to acceptance is engaging early, before enforcement starts, and proposing 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. HMRC; gov.uk Time to Pay
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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.
What a TTP payment plan costs
A TTP arrangement, HMRC's name for a tax payment plan, is free to set up, but it is not 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 TTP calculator does.
The numbers behind this
See the live official figures on our HMRC tax debt and Time to Pay tracker. How many Time to Pay arrangements HMRC has live and the debt they cover. All figures come from named official sources on our UK business distress data hub.
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.