HMRC Time to Pay

Published: 13/01/2021 By Jane Price

HMRC Time to Pay arrangements are structured payment plans for debt repayment over an agreed time period. HMRC do not agree to these payments plans lightly but equally they do recognise that in certain circumstances businesses need help in order to survive. Especially in the current climate.

The government is doing everything to help businesses get through this pandemic and are currently more accommodating when approving Time to Pay requests.  

If your business is struggling or you cannot pay your HMRC debts because of Coronavirus visit the HMRC website here where you will find help and advice. You can even sign up to get emails when any new coronavirus business support information is added.

A new HMRC Coronavirus helpline has been set up for business owners, with 2,000 staff ready to offer advice and support. If you're concerned about not being able to pay HMRC because of the Coronavirus, this should be your first port of call.

HMRC Coronavirus Helpline
 Telephone: 0800 015 9559
 Monday to Friday, 8am to 8pm
 Saturday, 8am to 4pm

In normal circumstances these agreements come with a 3.5% penalty charge but according to a recent budget the penalty will be waived for the duration of the pandemic.
A typical HMRC time to pay arrangement will last twelve months and all other taxes must be paid when they are due or any HMRC time to pay arrangement will be in default. If there is a default, you are likely to lose the confidence of HMRC, which in turn considerably reduces the company’s options to settle with HMRC

Tips for success with a HMRC ‘’time to pay’’ arrangement:
  • Establish clear lines of communication with HMRC straight away.
  • Debts under £250k can be dealt with in the first instance over the phone.
  • For debts over £250k a written proposal is required and sent to the specialist HMRC team.
 A proposal should include: 
  • How has Covid had an impact on the business – include financial projections. (Include plenty of headroom in your projections - it’s far more difficult to agree a new TTP with HMRC if the first one fails).
  • What has the business done to alleviate the impact.  Explain all areas where this has been successful or where plans have failed explaining why it has failed.  
  • What cost savings has the business been able to make?  (redundancies; release of properties not required, sell-off stock or unutilised assets etc). 
  • Has the business attempted to raise equity finance from 3rd parties or owner/directors?   
  • Are there strong credit control measures in place to bring in cash from trade debtors? 
  • Has the business used all the appropriate government schemes including BBLs/CBILS, any grants which are available?  
  • Can you show that all stakeholders are supporting the recovery of the business? (Also include support of other lenders, trade creditors etc).
  • If there is a strong business case to stretch payments over more than 12 months, then you could attempt to propose up to 18 - 24 months but it will depend on the strength of the proposal.
  • Are you able to put down a significant down payment at an early stage of the prepayment plan?  This would demonstrate commitment and intent to fulfill the repayment proposal. 
  • Do what you say you will and ensure that you provide any information requested within the agreed timescale.  Always be upfront and honest.  Credibility is an important issue in the eyes on HMRC!
If your debts are not related to Coronavirus you should contact Payment Support Service (PSS) if you cannot pay in full before your payment deadline. Anyone can use this service, not just businesses.
 Telephone: 0300 200 3835
 Opening times:  Monday to Friday: 8am to 6pm