A Time to Pay Arrangement (TTP) with HMRC is a debt repayment plan for your outstanding taxes. Companies that have defaulted on their payments to settle their Corporation Tax, VAT, and/or PAYE can ask HMRC for extra time to pay.
The length of an arrangement depends on your specific circumstances. HMRC will usually agree that you can pay it back over 6–12 months. However, if you instruct a professional turnaround advisor, they can often secure longer terms, i.e., 2 years, as they provide a formal Statement of Affairs and will not put forward proposals that are destined to fail.
Before calling the Business Payment Support Service, ensure you have the following information to hand. Being unprepared can lead to an immediate rejection or a plan that is set at an unaffordable level.
HMRC will only accept a proposal if it is satisfied that you will stick to the arrangement and repay all taxes in full. It is your job to convince HMRC by putting forward a reasonable proposal supported by evidence, including:
You can set up a payment plan online (Self-Serve) if you meet the following criteria:
| Tax Type | Debt Threshold | Max Online Term |
|---|---|---|
| VAT | Up to £50,000 | 12 Months |
| PAYE | Up to £50,000 | 12 Months |
| Self-Assessment | Up to £30,000 | 12 Months |
Note: You cannot set up a VAT payment plan online if you use a cash accounting scheme, an annual accounting scheme, or make payments on account. In these cases, or if you owe more than £50,000, you must negotiate manually.
Installments for Time to Pay arrangements are taken by Direct Debit. This ensures a smoother process for both the customer and HMRC. It is likely that HMRC will want the Direct Debit set up on the day of the initial call.
Poor compliance history, such as frequent late filings and fines, suggests your company is unreliable and makes HMRC less likely to “lend” to you. They also consider your line of business; some industries are deemed higher risk due to cash flow volatility.
R&D Tax Credits: These can be taken into account when agreeing to a TTP, but they must be finalized and agreed upon first. Consequently, they are rarely a primary negotiating tactic for urgent debt.
If you have tried to establish a Time to Pay arrangement and been rejected, you should contact a turnaround advisor immediately. They can conduct a formal audit of your financial situation, which often carries more weight with HMRC.
If a Time to Pay arrangement is refused but the company remains viable, your advisor may suggest a Company Voluntary Arrangement (CVA). This is a formal insolvency tool used to restructure debts over a 3–5 year period. Sometimes, the credible threat of a CVA can push HMRC to accept a 24-month TTP agreement instead, as it ensures they recover the full amount in a shorter time frame.
Late Payment Interest: As of late 2025, HMRC charges interest on late payments at 8.0%. This is calculated daily until the balance is cleared.
For expert advice on HMRC negotiations, call us on 0800 9700539.
Written ByKeith Steven
Turnaround Director
Keith is the Turnaround Director of RMT Accountants & Business Advisors. Prior to being acquired by RMT his company KSA Group has undertaken more than 300 CVA led rescues. Read our case studies to see how.
