HMRC Time to Pay: Spread Your Tax Bill into Manageable Instalments
Can't afford to pay HMRC in full? An HMRC Time to Pay arrangement may allow you to spread outstanding tax into affordable monthly instalments. Discover who qualifies, how repayment plans work, what interest applies and how to apply.
Guidance from The Online Accountants. HMRC assesses and approves payment arrangements.
HMRC Time to Pay at a glance
Individuals and businesses
People owing Self Assessment and businesses owing VAT, PAYE or Corporation Tax may be able to request a plan.
Based on affordability
There is no universal repayment term. HMRC considers the shortest realistic period; longer arrangements require stronger justification.
Usually still payable
Interest normally continues on overdue tax even when HMRC agrees instalments. Penalty treatment depends on the tax and timing.
Online or by speaking to HMRC
Some taxpayers qualify for HMRC's online service. Others must discuss their circumstances directly with HMRC.
Which tax bills can be included?
| Tax | Typical situation | What to do |
|---|---|---|
| Self Assessment | Cannot pay a January or July tax bill | File the return, check the online payment-plan service and contact HMRC if ineligible. |
| VAT | Quarterly VAT liability exceeds available cash | Submit outstanding returns and check online eligibility or contact HMRC. |
| Employers' PAYE / NIC | Payroll taxes have fallen into arrears | Bring required payroll submissions up to date and discuss affordable instalments. |
| Corporation Tax | A limited company cannot meet its payment deadline | Prepare a business cash-flow forecast and contact HMRC to discuss a plan. |
HMRC also offers support for certain other debts. Whether several liabilities can be included depends on your circumstances and HMRC's assessment.
HMRC Time to Pay repayment calculator
Estimate monthly instalments and illustrative interest before speaking to HMRC. The calculator assumes a constant annual interest rate and equal monthly payments that clear the debt over your selected term.
The rate shown is an editable example, not a live HMRC rate. Actual HMRC interest is calculated using applicable rates and dates, which can change. This model uses monthly compounding as a planning approximation; HMRC's daily calculations may differ. A 12-, 24- or 36-month option does not mean HMRC will approve that term. The available monthly amount is a planning input, not HMRC's eligibility formula.
How to apply for HMRC Time to Pay
Check your tax account, statements, assessments and due dates. Correct errors before agreeing a repayment figure.
List monthly income, essential expenses, savings, business cash flow, existing borrowing and upcoming taxes. Do not promise more than you can pay.
Visit HMRC's payment-plan service. Online eligibility varies by tax type, balance and circumstances.
Explain why you cannot pay in full, what you can pay now, the monthly amount you can afford and how you will meet future tax liabilities.
Make payments on time, file future returns and contact HMRC immediately if your finances change.
How much can you afford to offer HMRC?
HMRC looks at what remains after reasonable essential living or business costs. It may ask about available savings and assets. A convincing proposal demonstrates both how the arrears will be cleared and how new tax bills will be paid as they arise.
Example: sole trader
A sole trader owes £4,800 and has £600 per month left after necessary expenses. A proposal of £400 monthly towards the arrears, with a separate allowance for future tax, could provide a starting point for discussion. HMRC decides what is acceptable.
Example: limited company
A company owes £15,000 in Corporation Tax but expects regular customer receipts. Directors should prepare a rolling cash-flow forecast covering wages, suppliers, VAT, PAYE and the proposed tax repayments. If the business cannot pay debts as they fall due, insolvency advice may be necessary.
Does HMRC Time to Pay stop penalties and interest?
Interest: Late-payment interest generally continues until the outstanding tax is fully paid, including during an agreed plan.
Penalties: An arrangement can prevent or reduce certain late-payment penalties, depending on the tax regime, when you contacted HMRC and whether you maintain the plan. It does not automatically cancel penalties already incurred, and it does not remove separate late-filing obligations.
What if HMRC refuses your proposal?
HMRC may decline a plan if repayments appear unaffordable, information is missing, there are repeated defaults, the business is not viable, or it believes you can pay using available funds or assets. You can ask what concerns HMRC has, supply better cash-flow evidence and put forward a revised realistic proposal.
For a company facing serious cash-flow pressure, obtain professional advice promptly. A Time to Pay agreement is not a substitute for dealing with insolvency.
Frequently asked questions about HMRC Time to Pay
Can I set up HMRC Time to Pay online?
Sometimes. HMRC offers online arrangements for eligible Self Assessment, VAT and PAYE debts, subject to changing conditions. Use its official online checker to find out whether you qualify.
Can I get 12 or 24 months to pay HMRC?
Possibly, but there is no automatic entitlement. HMRC assesses affordability and expects the debt to be cleared as quickly as reasonably possible. Longer business arrangements can be harder to obtain.
Can I apply before the tax payment deadline?
Contact HMRC early if you expect difficulties. A formal Time to Pay arrangement relates to tax that cannot be paid by the due date; if you are simply saving towards a future Self Assessment bill, a Budget Payment Plan may be more appropriate.
Can I include VAT and Corporation Tax together?
HMRC may consider multiple debts when assessing your overall position. Tell HMRC about every outstanding tax liability and forthcoming payment rather than assuming one arrangement automatically covers them all.
Does Time to Pay affect my credit score?
An HMRC arrangement is not itself the same as taking out a credit product. However, enforcement action, court judgments or insolvency proceedings may have wider financial consequences. Seek tailored advice if this is a concern.
What happens if I miss a monthly instalment?
Contact HMRC immediately. It may be possible to renegotiate the plan, but missed payments can cause the arrangement to be cancelled and collection action to resume.
Will HMRC write off some of my tax debt?
Time to Pay is designed to collect tax over time, not reduce the underlying amount owed. Separate remedies and reliefs may exist in particular circumstances, but they are not part of an ordinary TTP agreement.
Can an accountant negotiate with HMRC for me?
An appropriately authorised accountant can help reconcile liabilities, prepare forecasts, propose affordable repayments and communicate with HMRC. Approval remains HMRC's decision.
Related UK tax guidance
What is a CT600?
Understand the Corporation Tax return and company filing responsibilities.
HMRC business tax account
Learn how to check business tax liabilities and online records.
Late filing company accounts
Understand Companies House deadlines and penalties, which are separate from HMRC tax payment arrangements.
Self Assessment tax returns
Explore filing requirements before seeking a payment arrangement.
Need help getting your tax position under control?
The Online Accountants can help you review outstanding tax liabilities, prepare reliable accounts and understand your next steps. HMRC decides whether to accept any payment proposal.
Contact The Online Accountants View accountancy feesReviewed October 2026. General UK tax information, not a guarantee of acceptance or personalised debt advice. Eligibility, interest rates and penalty rules can change. Check the official HMRC service before applying. If you face urgent enforcement or insolvency, seek specialist advice.