What is a Time to Pay Arrangement?
A Time to Pay Arrangement (TTP) is an agreement with HMRC that allows your business to spread outstanding tax liabilities over a period of time, rather than paying the full amount immediately. If your company is unable to settle Corporation Tax, VAT, or PAYE when due, a TTP can provide valuable breathing space while you stabilise cash flow and avoid enforcement action.
Instead of facing escalating pressure from HMRC, you agree to repay the debt in instalments that reflect what your business can realistically afford. The key, however, is demonstrating that your proposal is both credible and sustainable.
If you are an individual or business seeking assistance with a Time to Pay (TTP) arrangement with HMRC, please contact us. Our team can provide expert guidance and support to help you manage your tax obligations effectively. Contact us today.
How long will HMRC give you?
The length of a Time to Pay Arrangement depends entirely on your financial circumstances and how well your proposal is presented. In many cases, HMRC will agree to a repayment period of between six and twelve months. However, where there is strong supporting evidence and a well-structured plan, longer terms can sometimes be negotiated.
Working with an experienced advisor can make a significant difference here. Not only do they understand what HMRC expects to see, but they also ensure that any proposal put forward is realistic, something HMRC is far more likely to accept.
What does HMRC look for?
HMRC will only agree to a Time to Pay Arrangement if they are confident your business can meet the repayments in full and on time. This means your proposal needs to go beyond a simple request, it should clearly demonstrate affordability and intent.
In practical terms, this usually involves showing how your business will generate the cash needed to meet repayments, whether through improved sales, cost reductions, or tighter financial management. Just as importantly, you must show a commitment to staying compliant with future tax obligations.
A strong proposal strikes a careful balance: it needs to be ambitious enough to satisfy HMRC, but realistic enough that you can stick to it. Overcommitting is one of the most common mistakes businesses make, and it can lead to rejection or future default.
How are payments structured?
Once agreed, payments are typically collected by Direct Debit. HMRC often requires this to be set up immediately to ensure the arrangement runs smoothly and payments are not missed. This also gives HMRC confidence that the plan will be adhered to from the outset.
VAT and Corporation Tax considerations
Time to Pay Arrangements are commonly used for VAT and Corporation Tax liabilities. Recent changes have made it easier for some businesses to set up VAT payment plans online, particularly where the debt is relatively modest and the business is otherwise compliant.
For example, businesses owing up to £50,000 in VAT may be able to arrange repayment over a period of up to 12 months, provided they are up to date with their filings and have no other payment plans in place.
Corporation Tax debts can also be included, which is often the case for businesses with fluctuating income – such as contractors or those operating in cyclical industries.
What could affect your chances?
While every case is assessed individually, there are some consistent factors that influence HMRC’s decision. A strong compliance history will always work in your favour, whereas late filings, missed payments, or penalties can raise concerns about reliability.
Your industry can also play a role, as some sectors are viewed as higher risk due to cash flow volatility. In addition, if you have previously had a Time to Pay Arrangement, HMRC may take a more cautious approach when considering a new request.
What if your application is refused?
If HMRC rejects your proposal, it’s important not to ignore the situation. At this stage, taking professional advice can significantly improve your position.
A turnaround advisor can reassess your finances, prepare detailed forecasts, and approach HMRC with a stronger, evidence-based proposal. Because advisors deal with HMRC regularly, their submissions often carry more weight and are less likely to be dismissed as unrealistic.
In some situations, where a business is viable but under sustained pressure, a formal restructuring option such as a Company Voluntary Arrangement (CVA) may also be considered. In fact, the possibility of a CVA can sometimes encourage HMRC to reconsider a Time to Pay proposal, as it may offer a better outcome than insolvency.
Don’t wait to act
The earlier you address tax arrears, the more flexibility you will have. Leaving the issue too long can limit your options and increase the risk of enforcement action.
If you are an individual or business seeking assistance with a Time to Pay (TTP) arrangement with HMRC, please contact us. Our team can provide expert guidance and support to help you manage your tax obligations effectively. Contact us today.