HMRC Time to Pay arrangements

A Time to Pay arrangement is an agreement with HMRC to clear company tax arrears in instalments rather than all at once, usually over a period of up to 12 months, though longer terms are sometimes agreed for larger debts. It covers VAT, PAYE and Corporation Tax. HMRC will expect the company to keep up with new tax as it falls due as well as paying off the arrears, and to show that the instalments are genuinely affordable. The key to acceptance is engaging early, before enforcement starts, and proposing 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. HMRC; gov.uk Time to Pay

Key facts

What it is: Paying HMRC arrears in instalments, often over up to 12 months
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

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.

Common questions

How long can a Time to Pay arrangement last?

Typically up to 12 months, though HMRC sometimes agrees longer for larger debts. The term has to be realistic and affordable, and you must keep paying new tax on time.

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.

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HMRC Time to Pay arrangements. A Time to Pay arrangement is an agreement with HMRC to clear company tax arrears in instalments rather than all at once, usually over a period of up to 12 months, though longer terms are sometimes agreed for larger debts. It covers VAT, PAYE and Corporation Tax. HMRC will expect the company to keep up with new tax as it falls due as well as paying off the arrears, and to show that the instalments are genuinely affordable. The key to acceptance is engaging early, before enforcement starts, and proposing 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.

Speak to the right expert

Tell us briefly what is happening and we will arrange a free, confidential, no obligation introduction to the right expert for your situation, whether that is a turnaround adviser, a tax specialist or a licensed insolvency practitioner. The earlier you get advice, the more options you usually have.

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