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HMRC Time to Pay affordability calculator

The most common reason a Time to Pay proposal fails is that the director offers HMRC more than the company can actually sustain, then defaults. HMRC would generally rather agree a realistic plan than force a company under, so the trick is to propose a figure you can genuinely hit from real cash flow, over a period HMRC will accept, usually up to twelve months. This tool takes your tax arrears and the monthly surplus you can realistically commit, and shows how long the debt would take to clear and whether that sits inside HMRC\'s usual comfort zone. If the maths only works over many years, that is itself useful information: it tells you the company may need formal rescue or an orderly closure rather than a payment plan. Either way, walk into the conversation with HMRC knowing your numbers. HMRC, gov.uk

Is a Time to Pay plan realistic?

Borderline. At £3,500 per month, including HMRC late-payment interest at 7.75%, this takes about 15 months, beyond the usual 12. HMRC sometimes agrees longer for larger debts, but be ready to evidence affordability, or improve the monthly figure.

HMRC charges late-payment interest (currently 7.75%) on Time to Pay balances; this is an estimate, not a quote.

Indicative. You must also keep paying new tax as it falls due. HMRC decides each case on its facts.

Common questions

How long will HMRC give me to pay?

Time to Pay arrangements are usually up to 12 months, though HMRC sometimes agrees longer for larger debts. The plan has to be realistic and affordable, and you must keep paying new tax on time as well.

What if I cannot afford even a Time to Pay plan?

If the company cannot afford a sensible instalment, that is a strong signal it needs formal rescue or an orderly closure. A practitioner can explain the options before HMRC escalates to a petition.

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Free, confidential and no obligation. We are an independent information service and introduce directors to the right vetted expert for their situation, including licensed insolvency practitioners. This is general information, not regulated advice.

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