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. GOV.UK says there is no time limit: the length depends on how much the company owes and what it can afford to pay each month. HMRC will expect the instalments to be genuinely affordable, the company to keep up with new tax as it falls due, and evidence to support the payments offered. HMRC; gov.uk Time to Pay
- What it is
- Paying HMRC arrears in instalments, with no fixed time limit
- 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
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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.
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.
How to ask for Time to Pay
You can ask online or by phone. Gov.uk has an online service to "check if you're eligible for and to set up a payment plan online". For a company you will need the reference number for the tax, UK bank details you are authorised to set up a Direct Debit on, and "your company's income and spending". If you cannot use the online service, call the HMRC line for the tax you owe: the numbers are in our table on the HMRC debt collectors page, Corporation Tax first.
HMRC will expect evidence for the payments you offer, such as a cash flow forecast. Gov.uk says that if your company is in tax debt, "You must reduce your debt as much as possible before setting up a payment plan", for example by releasing assets like stock or vehicles. Our Time to Pay proposal letter sets out what to include, and the affordability calculator helps you find a figure you can keep to.
Ask early. Once a winding-up petition has been issued, HMRC will not agree a Time to Pay arrangement: it will only accept payment in full. If the debt has already gone to enforcement, or you know a petition has been issued, speak to a Licensed Insolvency Practitioner straight away.
For free, independent help before you call HMRC, Business Debtline is a debt advice charity. Its phone line is 0800 197 6026, Monday to Friday, 9am to 8pm.
Related data
Our HMRC tax debt figures: The scale of tax debt owed to HMRC, from HMRC’s annual report. Every page on our data hub names its official source.
Where to go from here
- Use the matching template: HMRC Time to Pay letter.
- If you decide to speak to a Licensed Insolvency Practitioner, choose your own: our practitioner directory lists every practitioner on the official Insolvency Service register, and how to choose an insolvency practitioner explains what to ask. Always confirm their entry on the official register before you instruct anyone.
Common questions
How long can a Time to Pay arrangement last?
GOV.UK says there is no time limit: it depends on how much you owe and what you can afford to pay each month. The term has to be realistic and affordable, and you must keep paying new tax on time.
What if HMRC refuses a Time to Pay arrangement?
Gov.uk says that if you cannot agree a payment plan, HMRC will "ask you to pay the amount you owe in full". There is no appeal: "You cannot appeal against HM Revenue and Customs' (HMRC) decision, but you can make a complaint if you're unhappy about how you were treated." You can go back with a better-supported proposal, and for VAT HMRC's guidance says "You can propose a payment plan at any time". If no plan the company can afford would be accepted, take advice from a Licensed Insolvency Practitioner.
Can I get a payment plan for a VAT bill?
Yes. HMRC's VAT guidance says "You can ask HMRC for a payment plan known as a Time to Pay arrangement", and an agreed plan "can mean lower, or no, late payment penalties". Timing matters: "You'll get a first late payment penalty if your payment is 16 or more days overdue." To avoid that first penalty, pay in full within 15 days of the due date. Late payment interest still runs from the first day the VAT is overdue. Source: How late payment penalties work if you pay VAT late, published on gov.uk (last updated 10 July 2025, checked 1 November 2026).
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.