Time to Pay Arrangement – HMRC

Time to Pay Arrangement - HMRCHer Majesty’s Revenue and Customs’ Time to Pay Arrangements (HMRC TTP) is a system set up to help businesses and individuals who are in debt to HMRC. Under the arrangement, HMRC agrees to receive payment of the debt in installments, rather than in one lump sum. This can be a helpful way for businesses and individuals to get back on track with their tax payments, without incurring additional penalties or interest charges.

In order to be eligible for an HMRC TTP, businesses and individuals must first demonstrate that they are unable to pay their tax bill in full and on time. They will then need to enter into a formal agreement with HMRC, outlining how and when they will make the installments. Once the agreement is in place, HMRC will begin collecting the debt in accordance with the agreed schedule.

For businesses and individuals who are struggling to meet their tax obligations, an HMRC TTP can be a useful way to get back on track

What is a HMRC Time To Pay Arrangement?

A HMRC Time To Pay Arrangement (TTP) is a payment plan that allows you to spread the cost of your tax bill over a period of time. The arrangement is set up between you and HMRC, and can last for up to 12 months. During this time, you will make regular payments towards your tax bill, and will not be charged any interest or penalties.

If you are having difficulty paying your tax bill, a TTP may be an helpful option. However, it is important to note that not all taxpayers will be eligible for a TPP. You must be able to demonstrate that you are unable to pay your tax bill in full, and that you have the ability to make the agreed-upon payments. If you think a TTP may be right for you, contact HMRC to discuss your options.

How Do Time to Pay Arrangements with HMRC Work?

If you’re struggling to pay your taxes on time, you might be able to set up a Time to Pay arrangement with HMRC. This arrangement allows you to spread the cost of your tax bill over a period of time, making it more manageable. You can set up a Time to Pay arrangement online, over the phone, or in person at your local HMRC office.

To be eligible, you must be able to pay the full amount within a reasonable timeframe and you must not have any outstanding tax debts. Once you’ve set up an arrangement, you’ll need to make regular payments as agreed. If you miss a payment or default on the arrangement, HMRC can take enforcement action, which could include issuing a liability order or sending bailiffs to collect the debt.

With a Time to Pay arrangement in place, you can ensure that your tax bill is paid in full without incurring any additional penalties or interest charges

Can HMRC Refuse a Payment Plan?

There are some situations in which HMRC may refuse to accept a payment plan. For instance, if you have a history of non-payment or if you owe a large amount of money, HMRC may be unwilling to work out a payment arrangement with you. Additionally, if you have already defaulted on a previous payment plan, HMRC may be reluctant to enter into another one.

In general, HMRC will only agree to a payment plan if they believe that you will be able to make the regular payments and pay off the debt within a reasonable timeframe. If HMRC refuses your payment plan, you may still be able to negotiate a different arrangement or appeal the decision.

Only Agree to Instalments that are Manageable

It can be easy to feel pressured into agreeing to a monthly amount that you simply cannot afford when you’re trying to come to an agreement with HMRC. However, it’s important to remember that you shouldn’t agree to an amount that you can’t realistically afford to pay. Otherwise, you may find yourself in a difficult situation further down the line.

If you’re not sure how much you can afford to pay, it’s a good idea to speak to a financial advisor or accountant who can help you work out a realistic budget. Once you have an understanding of your finances, you’ll be in a much better position to negotiate an affordable payment plan with HMRC.

How to maximise your chances of agreeing a Time to Pay Plan

Before contacting HMRC, it’s a good idea to prepare by making a list of your income and expenditure over the past few months. This will help you to show HMRC how much you can afford to pay each month. It’s also important to be honest about your financial situation – if you try to underestimate your income or overestimate your expenses, HMRC is likely to reject your application.

Once you’ve gathered all the necessary information, you can contact HMRC to discuss your options. Be polite and straightforward in your dealings with them, and be prepared to negotiate – after all, the worst they can say is no. If you follow these tips, you should maximise your chances of agreeing a Time to Pay Plan with HMRC.

In addition, HMRC will assess:

  • How well you’ve complied with their rules and regulations. They are looking for reliability over any previous tax returns have your UTR number at hand and your ability to meet their terms of agreement.
  • What business niche you’re in. Certain sectors will have higher historical unreliability and hence be considered greater risk for a TTP.
  • Have you had a payment arrangement before for your tax bill? If the answer is yes it doesn’t automatically preclude you but it may be harder to arrange another one.

Is there Interest on Time to Pay Arrangements?

HMRC charge interest on time to pay arrangements, as of 2022, the rate of interest charged is 2.6% per annum.

Can I Arrange TTP Arrangements for Longer than 12 Months?

According to the HMRC website, payment for taxes is due within twelve months. If you are unable to pay within this time frame, you may be able to arrange a time to pay agreement. These agreements allow you to spread your payments over a longer period of time, typically up to twelve months. In order to qualify for a time to pay arrangement, you must be able to demonstrate that you are unable to pay your tax bill in full within the original time frame.

You will also need to show that you have made efforts to reduce your expenditure in order to free up funds for payment. While time to pay arrangements can provide some relief, it is important to remember that they will still need to be paid in full within the agreed upon time frame. If you are unable to do so, you may be subject to late fees or other penalties.

Will HMRC agree Time to Pay Arrangements for VAT, Corporation Tax or PAYE?

The short answer is yes, HMRC does agree to Time to Pay Arrangements (TTP) for businesses who owe VAT, Corporation Tax or PAYE. However, there are a few conditions that must be met in order for the arrangement to be approved. First, the business must have a genuine reason for not being able to pay the amount owed on time. Second, the business must have a realistic plan in place for how they will repay the amount owed over time.

Finally, the business must agree to cooperate fully with HMRC during the repayment period. If all of these conditions are met, then there is a good chance that HMRC will agree to a TTP. However, it is important to note that each case is considered on its own merits, so there is no guarantee that an arrangement will be approved.

What if you Fail to Keep to the Arrangement

If you don’t keep to the terms of your time to pay arrangement, this could happen:

  • Your creditor may take you to court to recover the debt and get a judgment against you.
  • If this happens, your creditor can ask the court for an order that allows them to take further action to recover the debt. This could include:
  • attaching earnings from your employment so money is deducted before you receive your wages or salary
    – instructing bailiffs to seize and sell your possessions
    – Your name could be added to a list of County Court Judgments (CCJs) which is publicly available.
  • Issue a bankruptcy petition for sole traders
  • Issue a winding up petition for Limited Companies

How to Contact HMRC about a Time to Pay Arrangement?

If you owe HMRC money and you cannot pay in full or on time, you can contact them to discuss a Time to Pay (TTP) arrangement. This is an agreement between you and HMRC that allows you to pay your debt over an agreed period of time.

You can contact HMRC by phone or online.

HMRC Business Payment Support Service (PSS) on 0300 200 3835.

HMRC Time to Pay Phone Number is 0300 200 3822

When you contact HMRC, you will need to give them some information about your financial situation. They will use this information to decide if a TTP arrangement is suitable for you. If they agree to a TTP arrangement, they will send you a letter outlining the terms of the agreement. It is important that you make the payments on time and as agreed, otherwise HMRC may withdraw the arrangement and take further action to recover the debt.

If you have any questions about TTP arrangements or other ways to pay your debt, you can contact HMRC for advice

External link

HMRC guidance: If you cannot pay your tax bill on time

HMRC guidance: How to pay a debt to HMRC with a Time to Pay Arrangement

Lee Jones profile picture
Business Finance specialist at Invoice funding

Seasoned professional with a strong passion for the world of business finance. With over twenty years of dedicated experience in the field, my journey into the world of business finance began with a relentless curiosity for understanding the intricate workings of financial systems.

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