What to Expect from HMRC Time to Pay Arrangements
HMRC's Time to Pay arrangements are a formal way to repay tax debt in instalments. They're designed for people and businesses who can't afford to pay their tax in full right now but are willing to cooperate and get things back on track.
Many assume it's too late once the letters have started. It isn't. Time to Pay is part of HMRC's standard process for dealing with overdue tax — provided the person is taking action. But there are steps that must be followed, and HMRC controls how the arrangement is worked out.
What Is a Time to Pay Arrangement?
Time to Pay allows tax debt to be paid off gradually, typically over 6 to 12 months. It covers most tax types, including:
- Self Assessment
- VAT
- PAYE
- Corporation Tax
Interest continues to accrue during the arrangement. Late payment penalties may be paused — but only if the arrangement is kept to. Missing payments or falling behind on future returns will usually cause the plan to be cancelled.
Returns Must Be Filed First
Before anything else, HMRC requires all outstanding returns to be submitted. They may already know roughly what's due and may send you a statement of account — but that figure must be finalised through proper filings before a plan is agreed.
If returns are still outstanding, HMRC won't approve a Time to Pay arrangement. They need to see the full liability before they'll consider how it can be repaid. This step can feel difficult, especially if several years are missing, but it's a necessary part of moving forward.
You Don't Set the Payment — HMRC Does
Once everything is up to date, the next step is to contact HMRC and go through a budget-style assessment. This is a structured review of your income and essential outgoings. For individuals, they'll ask about wages, self-employed income, rent, bills, food, fuel, childcare, and other basics. For businesses, they'll look at turnover, expenses, and operational costs.
Based on the information you provide, HMRC calculates what they think you can afford — and that becomes the proposed monthly payment. It's not up to the taxpayer or accountant to pick a figure. HMRC will suggest an amount, and if the numbers support it, they'll proceed.
If the amount is genuinely unaffordable, you can explain why — but HMRC will expect firm evidence. It's a structured process, not a negotiation.
How Long Can It Last?
Most arrangements are spread over 12 months or less. HMRC prefers debts to be cleared quickly, but longer periods may be possible in some cases — for example, if the amounts involved are large or the financial pressure is temporary. They will make the decision based on the budget you've provided.
Once the plan is agreed, payments are usually collected by monthly Direct Debit. Keeping to these payments is essential. If a payment is missed without warning, HMRC may cancel the arrangement and begin enforcement action.
Can You Do It Yourself?
Yes, individuals and businesses can call HMRC themselves to request Time to Pay. But for many people, the process feels daunting, especially if it's been some time since they were in touch, or if records are incomplete.
Using a professional can make the process far easier. A representative can:
- Help gather and prepare the figures
- Submit all outstanding returns
- Speak to HMRC on your behalf
- Go through the budget assessment with you
- Handle follow-up conversations and requests
- Keep track of the arrangement after it's agreed
Having someone manage this can reduce stress and avoid delays — especially if several issues need resolving at once.
Take Action Before Enforcement Begins
HMRC won't chase forever before escalating. If debts are ignored, they can begin enforcement — which may include taking money from bank accounts, using debt collection agencies, or applying for court orders. Once enforcement begins, Time to Pay may still be possible, but it becomes harder to arrange.
It's better to engage early, get everything filed, and start the conversation while the options are still straightforward.
Need Help Getting a Time to Pay Plan in Place?
If you need help filing overdue returns and dealing with HMRC, Regeneris Partners Ltd can manage the process for you. We handle the practical steps calmly and professionally — so you can move forward with a clear plan.