Negotiate an affordable monthly payment plan with HMRC before enforcement action begins. Our specialists know HMRC's internal thresholds and will secure terms that genuinely fit your cash flow.
A Time to Pay (TTP) arrangement is the single most common route out of HMRC tax arrears. It is a formal agreement between your company and HMRC to pay outstanding PAYE, VAT, Corporation Tax, or Self-Assessment debt in instalments — typically over 6 to 12 months, though longer arrangements are possible with supporting evidence. A properly negotiated TTP stops enforcement action in its tracks: no distraint visits, no Statutory Demand, no Winding Up Petition, and critically, no frozen bank accounts.
But TTP is not automatic. HMRC will not offer you the best terms on the first call. The arrangement you get depends heavily on how the case is presented: the cash-flow evidence, the affordability calculation, the compliance history, and the narrative around why the arrears accrued and what has changed. This is where specialist advice pays for itself several times over.
HMRC's online self-service Time to Pay tool now covers Self-Assessment debts up to £30,000 (previously £10,000) and PAYE arrears up to £15,000, in both cases up to a 12-month schedule. For directors with smaller debts and clean compliance histories, this is a fast, no-friction route. Eligibility is narrow — one missed payment or one late return and you'll be routed to a caseworker — but where it applies it is by far the quickest option.
HMRC can now recover established tax debts above £1,000 directly from a taxpayer's bank and building society accounts, including ISAs, without a court order. A £5,000 minimum buffer must remain. DRD only applies to debts that have been established and where multiple warnings have been ignored — but it is a powerful new tool, and it does not apply where a valid Time to Pay arrangement is in place. In practical terms: getting a TTP signed off before DRD triggers is now a priority.
HMRC late-payment interest continues to track the Bank of England base rate plus 2.5 percentage points, which as of early 2026 means interest accruing at a meaningful cost over the life of any TTP. This makes the length of the arrangement a real commercial decision, not just a cash-flow one: longer plans cost materially more in interest.
The gap between first warning letter and a Statutory Demand or Winding Up Petition has compressed significantly in 2025–2026. Where two years ago directors had months to react, many cases now move from first warning to formal enforcement in a matter of weeks. The practical takeaway: start the TTP conversation before you receive a Statutory Demand — not after.
Before HMRC is contacted, we build a 13-week cash-flow forecast showing what the business can realistically afford to pay each month while continuing to meet ongoing PAYE, VAT, and Corporation Tax liabilities. HMRC will not approve a TTP that merely parks one debt while another accrues. The forecast is the foundation of the whole negotiation.
We contact HMRC's Debt Management team (Time to Pay Helpline or the caseworker assigned to your file) and present the affordability evidence alongside the narrative: what happened, why, and what is different now. Compliance history matters here — a company with clean filings gets materially better treatment than one with repeat defaults.
HMRC's opening offer is rarely the best offer. We negotiate the monthly amount, the length of the arrangement, any upfront payment requirement, and the treatment of penalties and interest. For larger or more complex cases, this can involve multiple rounds of discussion and escalation to a senior caseworker.
Once agreed in writing, the TTP stops all enforcement action. From that point on, the directors' job is straightforward but non-negotiable: every instalment on time, every future return filed on time, every future liability paid on time. A single breach and HMRC can, and often will, cancel the arrangement and resume enforcement from where it left off.
TTP isn't a universal solution. For some companies the honest assessment is that the underlying business model no longer supports the debt even with a 12-month schedule. In those cases we look at alternatives: a Company Voluntary Arrangement (CVA) that writes down a portion of the debt; a restructuring plan where there is a viable core business; or, where the company is genuinely insolvent and unrescuable, an orderly Creditors' Voluntary Liquidation (CVL) that protects directors from the additional risks of wrongful trading.
Choosing between these is a judgement call that turns on specific numbers and specific circumstances. Our initial free consultation exists precisely so directors can reach an honest assessment without pressure. If a TTP is right for you, we will tell you. If it isn't, we will tell you that too — and walk you through the alternatives.
Yes — HMRC's Time to Pay Helpline exists precisely for direct-from-director calls. For smaller Self-Assessment or PAYE debts with clean compliance, self-service will often work. For larger amounts, multi-tax-stream debts, or any case with a patchy compliance history, the terms you secure with professional representation are materially better.
Typical arrangements are 6 to 12 months. 18- and 24-month plans are achievable with evidence. Anything longer is unusual and usually signals that a CVA or other formal procedure is more appropriate.
Not routinely. HMRC may ask for evidence of assets and a compliance commitment, but personal guarantees are rare in standard TTP arrangements. They become more likely where the debt is large relative to turnover or where prior arrangements have failed.
Miss one and the arrangement is usually at risk. HMRC will typically contact you first; miss a second and the arrangement will normally be cancelled and the full remaining balance becomes due. At that point enforcement resumes from where it was paused.
A TTP is not a public record and is not reported to credit agencies by HMRC. It does not appear on your Companies House filings. It is a confidential commercial arrangement.
