A guide, not advice. This explains how things generally work. A licensed insolvency practitioner will tell you what applies to your company or to you.
What Is a Time to Pay Arrangement?
A Time to Pay (TTP) arrangement is an agreement with HMRC that allows a business to spread its tax payments - VAT, PAYE, Corporation Tax, or Construction Industry Scheme deductions - over an agreed period, rather than paying the full amount immediately.
For a company experiencing short-term cash-flow pressure but with a fundamentally viable business, a TTP can be an effective way to avoid formal insolvency. HMRC is generally willing to agree arrangements where the company can show it can meet both future liabilities and the agreed repayments.
When HMRC Will Agree
HMRC assesses each case on its merits. They are more likely to agree a TTP where:
- You contact them early, before enforcement action begins
- The company can pay future liabilities as they fall due
- You can offer a realistic, affordable repayment plan
- The underlying business is viable
- You have filed all returns and kept records up to date
HMRC is less likely to agree where the debt is large, the company has a history of broken arrangements, or there is no credible plan to meet future liabilities.
How to Negotiate
You can contact HMRC directly, but many directors find it easier and more effective to work with an adviser who understands HMRC's processes and can present a credible plan. We can help you prepare a realistic cash-flow forecast and repayment proposal.
What to Watch For
- A TTP only helps if the underlying problem is temporary. If the company cannot pay future tax on time, a TTP just delays the inevitable.
- If you break a TTP, HMRC is unlikely to agree another and may escalate to enforcement.
- HMRC can use distraint, county court action, or a winding-up petition if the arrangement fails.
Alternatives
Where the debt is too large for a TTP, consider a Company Voluntary Arrangement (which binds all creditors), administration (which provides a moratorium), or - if the business is not viable - a Creditors' Voluntary Liquidation.
Speak to a Licensed IP
We have extensive experience negotiating with HMRC. We'll assess whether a TTP is realistic for your company, help you prepare a credible proposal, and tell you honestly whether a formal insolvency procedure would serve you better.