Can I arrange Time To Pay my HMRC debt?

Can I arrange Time To Pay my HMRC debt?

Business owner asks:

I have a few outstanding liabilities with HMRC for VAT and PAYE. Can I arrange time to pay this with HMRC?

Acumenica answers:

Yes, you can.

If you’re finding it difficult to make a tax payment you can speak to HMRC and set up a Time to Pay (TTP) arrangement. HMRC will create a monthly plan which suits your needs by looking at what you can afford to pay and then use that to work out how much time you need to pay. The arrangement can be amended over time, so it can be shortened if your earnings rise or if you wish to make a one off payment to clear the debt.

  • There are a few things you need to be aware of before entering into a TTP with HMRC:
  • Your tax affairs needs to be up-to-date before HMRC will consider a TTP. This means all VAT returns, PAYE returns etc need to have been filed.
  • Your compliance record needs to be kept up to date throughout the TTP arrangement.
  • If you miss a payment, the TTP will be void.
  • HMRC needs to be satisfied that you will not have the ability to meet the tax due date without a TTP arrangement in place. It’s designed to a solution of last resort
  • Repayments need to be made over as short a time period as reasonable. Generally speaking, HMRC will allow payment over 6-12 months although, in extremis, this can be extended to 24 months or beyond.

How do I arrange a TTP?

You can set up a payment plan online with HMRC if the debt meets certain criteria: 

  • For self assessment, the amount outstanding needs to be less than £30,000, you have no other HMRC debts or TTPs, and you are proposing to pay over twelve months or less
  • For PAYE/CIS, the limit is £15,000 and the repayment term needs to be 6 months or less.
  • For VAT, it’s £20,000 and six months.

For all other taxes, you need to call the Debt Management Unit of HMRC and discuss it with them. 

Need further advice?

The Acumenica team are on hand to help business owners with HMRC negotiations, budget planning as well as on other matters. To arrange a no-obligation confidential chat, please complete the form on our Contact Us page or call 03330 166559.