Time to Pay Arrangements (TTP)

A Time to Pay arrangement is an instalment plan with HMRC that lets you spread an overdue tax bill over 6 to 12 months. It is the single most effective tool for managing HMRC debt, and the single most wasted opportunity when directors leave it too late to call.

We facilitate TTP conversations between directors and HMRC every week, and the pattern in our caseload is consistent. Directors who call before the deadline, or within a few weeks of missing it, get arrangements agreed in a single phone call.

Directors who call six months late, after statutory demands have been served and field officers instructed, face a much harder negotiation with a much lower success rate from our experience. The tool is the same. The timing changes everything.

The director who calls on a Tuesday morning while the VAT is still only a fortnight late tends to come off the phone with an agreement and a payment schedule. The one who calls after the bailiff letter has arrived is starting from much further back.

Quick Answer: How HMRC Time to Pay Works

Call HMRC’s Business Payment Support Service on 0300 200 3835. Tell them you cannot pay your tax bill in full. Propose a specific monthly repayment schedule, typically 6 to 12 months. If HMRC agrees, enforcement is suspended, late-payment penalties may be frozen, and you repay the debt in instalments while continuing to meet current tax obligations.

Interest continues to accrue on the outstanding balance at the HMRC late-payment rate (Bank of England base rate plus 4%, since 6 April 2025). If you miss a payment or fall behind on current obligations, HMRC can terminate the arrangement and resume enforcement immediately.

Which Tax Debts Qualify for HMRC Time to Pay?

TTP is available for all HMRC business tax debts. The five most common are below.

• VAT: quarterly or monthly returns. The most common TTP debt by volume.
• PAYE and employee NICs: monthly payroll deductions. HMRC treats these as money you collected on its behalf and negotiates least flexibly.
• Corporation Tax: annual company tax. HMRC is more flexible here because the debt is the company’s own.
• CIS deductions: Construction Industry Scheme payments.
• Self Assessment: personal tax for directors paid through SA.

HMRC treats different tax types with different urgency, and the reason matters when you decide which TTP to ask for first.

PAYE and employee NICs are pursued hardest because HMRC treats these as money the company collected from employees and held as a fiduciary, not as a company debt. VAT sits in the middle for similar reasons: collected from customers and remitted on. Corporation Tax is the most flexible because the debt is the company’s own.

If you owe more than one tax type, request the TTP for Corporation Tax first while you sort current PAYE and VAT, not the other way round.

How to Negotiate an HMRC Time to Pay Arrangement

Before You Call HMRC

• Know exactly what you owe. Check your Business Tax Account at tax.service.gov.uk; the balance updates daily.
• Prepare a breakdown of your company’s monthly income and expenses. The HMRC adviser will ask for this.
• Have a realistic repayment proposal ready. Not what you hope to pay. What you can guarantee.
• Make sure your tax returns are filed up to date. HMRC will not agree a TTP while returns are outstanding; the adviser cannot calculate the total debt without them. If you cannot pay the tax shown on the return, file the return anyway and call about the TTP straight after. Filing first is what unlocks the conversation.

On the Call With HMRC

• Be honest about why you cannot pay. HMRC hears every excuse. Honesty builds credibility.
• Propose a specific monthly amount and duration. “I can pay £3,000 per month for 10 months” lands better than “I need help.”
• Confirm you can meet current obligations during the TTP. This is non-negotiable. If you cannot pay the old debt and keep up with new liabilities, TTP is not viable.
• Ask for the agreement in writing. HMRC will send a confirmation letter. Keep it.

The call typically takes 20 to 30 minutes. The adviser has authority to agree arrangements up to 12 months on the spot. Longer terms or larger debts may be referred to a manager, which adds a few days.

What Happens If HMRC Rejects Your Time to Pay Application

HMRC rejects TTP when they conclude the business is not viable, the proposed repayment is unrealistic, or you have a history of broken arrangements. We see rejections most commonly in the four situations below.

Reason for rejection	What it usually means
Director called too late	Enforcement has already started; HMRC has lost confidence in the company’s ability to pay.
Multiple tax types overdue	The arrears across VAT, PAYE, and CT together suggest the business is structurally insolvent, not cash-strapped.
Previous TTP broken	HMRC’s system records every prior arrangement. A broken TTP is treated as a credibility problem.
Numbers do not support the proposal	The income and expenses breakdown shows the company cannot sustain the proposed repayments.

A rejection narrows the options in a specific order. The cheapest move is to propose revised terms straight back: a lower monthly amount, a longer period, or both.

The next step is to engage a licensed insolvency practitioner to make the call, because HMRC sometimes responds differently to a regulated firm putting forward a documented assessment of viability. The third move is a formal restructuring like a CVA, which binds HMRC to a creditor-approved repayment plan through the 75% vote.

If none of those work and HMRC proceeds to enforcement, the next step is typically a statutory demand followed by a winding-up petition under section 124 of the Insolvency Act 1986. At that point the question shifts from how to pay the tax to whether to close or save the company, and the calendar is no longer yours.

What Happens During the Time to Pay Period

What stops	What carries on
Enforcement is suspended: no statutory demands, no field officers, no winding-up petitions for the agreed debt.	Interest accrues on the outstanding balance at base rate plus 4% throughout.
Most late-payment penalties freeze for the duration.	You must make every TTP payment on time. Miss one and HMRC can terminate.
HMRC will not chase the debt outside the agreed schedule.	You must meet current tax obligations: this quarter’s VAT, this month’s PAYE, this year’s CT all paid on time.

The current-obligations requirement is where most TTPs collapse. A director negotiates a TTP for last year’s VAT, then misses this quarter’s VAT because the repayments consumed the cash that was supposed to cover the new bill. The TTP terminates and the total debt is now larger than it was at the start.

We stress-test the numbers before we let a director sign. Can the business fund the TTP repayments and meet current obligations from forecast cash? If the answer is no, the TTP is a displacement exercise, not a solution, and the company needs a different conversation.

Time to Pay vs Other HMRC Debt Options

Option	Best used when	Limit
Time to Pay	Single or limited HMRC debt, business is otherwise viable, called early.	Only covers HMRC. Will not solve a broader creditor problem.
Informal creditor negotiation	You have other creditors beyond HMRC who are open to instalments.	Not legally binding. A single creditor can withdraw and force the issue.
Company Voluntary Arrangement	Multiple creditors including HMRC; business viable with restructured debt.	Requires 75% creditor vote; HMRC’s vote often decisive. Failure ends in liquidation.
Administration	HMRC has filed a winding-up petition or business needs the statutory moratorium.	Heavier process; administrator takes control; outcome depends on saleable value.
Creditors’ Voluntary Liquidation	HMRC debt is unmanageable and the business cannot be rescued.	Closes the company; preserves IP choice and timing if you act before petition.

What You Should Do Right Now About HMRC Time to Pay

If you owe HMRC any tax and cannot pay by the deadline, call 0300 200 3835 today. Not tomorrow. The acceptance rate drops measurably with every week of delay.

• Call before the deadline: highest success rate. HMRC treats this as the company managing its position responsibly.
• Call within 30 days of the deadline: still strong. The debt is recent, the file clean.
• Call after 3 months: noticeably harder. Penalties have applied; HMRC’s system flags the case.
• Call after a statutory demand: hardest of all. The case is on HMRC’s enforcement track and a TTP usually requires professional representation to be considered.

If you have already been rejected, or if the debt is too large for TTP, Company Debt connects directors with licensed insolvency practitioners who can negotiate with HMRC on your behalf or advise on alternative routes. Take our 30-second insolvency test first if you are not sure where the company actually stands. The cases that go badly are rarely the ones where the director called too soon.

Related Guides

• HMRC Tax Debt Hub: overview of the HMRC debt-collection process and the routes available at each stage.
• Cannot Pay VAT: VAT-specific TTP guidance and risks.
• Cannot Pay PAYE: why HMRC negotiates least flexibly on payroll deductions.
• Problems Paying Corporation Tax: CT-specific TTP and rescue options.
• Winding-Up Petitions: what happens if HMRC moves to enforcement.
• Company Voluntary Arrangement: the route when TTP alone cannot solve the creditor picture.
• 30-Second Insolvency Test: confirm where your company actually stands before negotiating.

Frequently Asked Questions About HMRC Time to Pay Arrangements