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Time To Pay

A Time to Pay (TTP) agreement is a legal agreement where a company that owes money to HMRC agrees to pay regular instalments on an agreed timescale.

A TTP is usually between six and 24 months but they will waive late
payment penalties for the amounts if the repayment schedule is kept up.

What is a Time To Pay (TTP) agreement?

If your business owes money to HMRC through VAT, PAYE or corporation tax arrears then this could be a worrying time, especially if you are receiving payment demands.

Time To Pay (TTP) is an initiative designed to offer a viable temporary solution. It’s an agreement between HMRC and the company that owes the arrears.

Directors or business owners will propose an instalment repayment plan that spreads the arrears into repayments over a pre-agreed and manageable timescale.

What does a TTP agreement contain?

Each agreement is judged by HMRC on its own merits but there are some common elements that each contains:

  • Duration is usually six months or less although in rare and exceptional circumstances, HMRC have allowed them up to 24 months. Any overdue tax debts alongside any current debts are expected to be repaid within any agreed timeframe.
  • Interest will still be paid on any owed arrears but any penalties or surcharges HMRC would usually levy for late payments will not be applied.
  • Any business can apply for a TTP with HMRC being the sole arbiter on whether they will accept, reject or negotiate an offer depending on their own internal criteria.

What criteria does HMRC judge applications by?

While no explicit criteria is available, experience tells us that there are several commonalities to accepted agreements.

They are best thought of as a temporary, one-off solution not a regular means to keep a company solvent.

Any director or business owner applying for a TTP has to be able to convince HMRC that their company is viable and profitable in the medium or long term but experiencing temporary cash flow issues.

They should also be able to satisfy HMRC that they would be able to stick to any arrangement made.

Key Considerations

Some common key elements that HMRC will give the highest consideration to before agreeing to a TTP are:

  • Compliance record – HMRC will look at the recent record of repaying and paying due tax within the past 12 months. If a business is lax or regularly defaults then it’s unlikely that HMRC will support an arrangement if they aren’t even trying
  • Communications – How often have they been in touch with HMRC about these issues? If they have kept these channels open at all stages then this will be more beneficial to their case than if a TTP request is the first HMRC have heard of any difficulties
  • Truth and trust – It’s often taken for granted that a business should be honest and accurate in its representations to HMRC but to reiterate this point – any false statements or under declarations of assets or income will see any proposal rejected out of hand
  • Clarity – a clear, explanatory narrative that explains what has happened to lead to the situation and what steps will be taken to spur future growth and avoid future defaults
  • Evidence – genuine clear financial statements and information including profit & loss accounts, balance sheets and cash flow projections will be far more compelling than promises. This could also include letters of support from their accountants and/or any potential future investors to testify to the accuracy of these statements and assuage fears about future funding shortfalls

Realism – understand that this is a one-time, special offer deal that will not be repeated so make absolutely sure that the proposal is realistic and deliverable.

If you are behind on your tax payments or are about to be then we can help if you need to negotiate a solution with HMRC – which is always better than waiting for them to contact you.

Get in touch with us today to arrange a free discussion and we will give you our unbiased, expert opinion on your available options and likely success.

The earlier in the process, the better as you will generally have more room to manoeuvre at the start of any negotiations and procedures than later.

Frequently Asked Questions about Time To Pay
Can I automatically get an agreement from HMRC?


Even if you have an exemplary record of contacting HMRC and repaying arrears, you still have to request one and provide evidence.

Can I skip a TTP payment?

You could but it would be foolish to do so without informing HMRC in advance of the reasons.

If there is a genuine reason why you cannot make a payment then you should get in touch with HMRC to explain at the earliest opportunity.

Can I repay over a longer period?

The usual length of a TTP agreement is usually six months but if there are compelling circumstances then this might be extended but is entirely down to HMRC.

What debts can I apply for a TTP agreement for?

Debts that are due to HMRC which will be either VAT; PAYE or outstanding corporation tax.

Why do I need to provide evidence to HMRC that I can make TTP payments?

A Time To Pay agreement is not an automatic right and is entirely up to HMRC whether one is granted or not.

Supplying clear, accurate evidence to create a compelling case of why one is required and show why you can be trusted to repay it is the sensible and professional way to approach gaining one.

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