Businesses and self-employed taxpayers with outstanding tax liabilities may be eligible for support with their tax affairs through HMRC’s Time To Pay service.
This is a freeview 'At a glance' guide to Time to Pay arrangements.
At a glance
Under a Time to Pay (TTP) arrangement, taxpayers can set up a payment plan to spread the cost of their outstanding tax bill.
- The amount paid is based on a taxpayer's income and expenditure so there is no 'standard' Time to Pay arrangement.
- Each payment plan is specific to the taxpayer's financial circumstances based on what they can afford and how much time they need to pay.
- A Time to Pay arrangement can cover all amounts overdue, including penalties and interest.
- Time to Pay arrangements are designed to be flexible and are not a fixed, formal contract. They can be amended over time to reflect changes in circumstances.
Self-assessment taxpayers
Taxpayers can ask for Time to Pay online, without calling HMRC, if:
- The debt they owe is £30,000 or less.
- They do not have any other payment plans or debts with HMRC.
- Their tax returns are up to date.
- It's less than 60 days after the payment deadline.
- They plan to pay off your debt within 12 months
The taxpayer can choose how much to pay immediately and how much to then pay each month. Interest will be added accordingly.
HMRC's link: Set up a payment plan online
In other cases, it is necessary to call HMRC. HMRC have a dedicated helpline on 0800 200 3822.
Simple Assessment taxpayers
Taxpayers can ask for a Time to Pay online if:
- They owe between £32 and £50,000.
- Do not have any other payment plans or debts with HMRC.
The taxpayer can choose how much to pay immediately and how much to then pay each month. Interest will be added accordingly.
HMRC's link: Set up a payment plan online
VAT taxpayers
At the end of 2023, HMRC changed the eligibility requirements for a VAT Time to Pay arrangement. This means that more businesses are now eligible to use them.
Taxpayers can set up a VAT payment plan online if they:
- Have missed the deadline to pay a VAT bill
- Owe £50,000 or less
- Have a debt for an accounting period that started in 2023 or later
- Plan to pay the debt off within the next 12 months
- Do not have any other payment plans or debts with HMRC
- Have filed all their tax returns
Taxpayers cannot set up a VAT payment plan online if theyare in the Cash Accounting Scheme, Annual Accounting Scheme or make payments on account.
Employer' PAYE contributions
At the end of 2023, HMRC changed the eligibility requirements for a PAYE Time to Pay arrangement. This means that more businesses are now eligible to use them.
Taxpayers can set up an employers’ PAYE payment plan online if they:
- Have missed the deadline to pay an employer PAYE bill
- Owe £50,000 or less
- Plan to pay the debt off within the next 12 months
- Have debts that are 5 years old or less
- Do not have any other payment plans or debts with HMRC
- Have sent any employers’ PAYE submissions and Construction Industry Scheme (CIS) returns that are due
HMRC's link: Set up a payment plan online
What information do you need to agree a Time to Pay solution?
HMRC will discuss your specific circumstances to explore:
- Agreeing an instalment arrangement.
- Suspending debt collection proceedings.
- Cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately.
The rate of interest on underpaid tax has seen several changes in recent months. Currently, HMRC's late payment interest rate is 8%, see Tax Data Card 2025-26
Existing Time to Pay scheme
The key points to note with the existing Time to Pay scheme are:
- If a taxpayer knows they will have difficulties paying their tax, they should contact HMRC or make an online application as soon as possible and before the payment due date. HMRC’s systems do not allow payment arrangements to be set up too far in advance meaning that you may need to contact them 1-2 weeks before the due date for the payment.
- Taxpayers should ensure as far as possible that all returns are filed up to date. HMRC are more likely to agree to payment arrangements if there are no outstanding returns.
- HMRC may require cashflow forecasts, budgets and details of assets and liabilities to support the request for time to pay so be prepared to provide these.
- HMRC will expect the taxpayer to tell them how much they can afford. A fixed amount each month should be expected.
- Do not be overambitious, it is better to take longer to pay than to commit to something unrealistic and then not be able to meet the agreed amounts and payment schedule.
- Once an agreement is in place, future tax liabilities must be paid on time or current plans can be renegotiated to include them.
- As this is a formal agreement with HMRC, it will be made in writing.
- As long as an agreement is in place before the deadline for late payment, no penalties will be charged. Under current arrangements, interest remains due. If taxpayers default on their time to pay agreement penalties may become due.
- If a business has multiple tax debts, they may need to prioritise which are paid and which form part of the payment plan. It can be harder to negotiate arrangements for VAT, PAYE and NICs than for Income Tax and Corporation Tax so consider whether these should be paid first.
- If a taxpayer does not agree Time to Pay arrangements with HMRC and fails to pay thier tax, interest and penalties will be charged.
Useful guides on this topic
PAYE: Paying HMRC
This is a freeview 'At a glance' guide to paying HMRC.
Tax debts and insolvency
This guide summarises the treatment of tax debts to HMRC in insolvency cases.
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