What is HMRC Time to Pay?

HM Revenue and Customs (HMRC) can be owed tax from individuals and businesses for several different reasons and sometimes the tax that is due cannot be paid on time.

For those who are unable to pay the tax they owe on or before their tax deadline HMRC can consider setting up a Time to Pay arrangement.

A time to pay arrangement is an agreement between HMRC and an individual or business to pay back the tax they owe in instalments instead of a payment in full.

The Time to Pay payment plan gives the opportunity to spread the cost of a tax bill at an arranged figure over an agreed period of time.

With Time to Pay HMRC are supporting individuals and businesses by minimising the financial impact of repaying a tax debt through a sensible agreement.

HMRC successfully approve over 90% of Time to Pay arrangements so its definitely worth considering if you have a tax bill that you can’t pay in full and on time.

Who can apply for Time to Pay?

Time to Pay is available to businesses and individuals and is agreed by HMRC based on the individual circumstances of each applicant.

Because of the different financial structures of businesses and individuals HMRC uses different methods to work out what is agreeable.

What are the terms of a Time to Pay arrangement?

HMRC looks at what you can afford and then makes a decision which means that there isn’t a normal Time to Pay arrangement.

There is no standard Time to Pay arrangement and any agreement is flexible with no fixed or permanent contract available.

Time to Pay for Businesses

HMRC recognises that business finances are seldom simple and request a proposal of what you think your business can afford to pay back.

The proposal will be reviewed and questions will be asked to ensure the tax owed is being paid back in the quickest time possible and the payments proposed are achievable.

How long you will be given depends on how much tax is owed and the financial health of your business.

A business time to pay arrangement will be reviewed periodically and is flexible so adjustments can be made.

Time to Pay for Individuals

HMRC uses an income and expenditure assessment form for individuals which reviews your income, expenditure and any disposable assets.

From your assessment a disposable income figure is calculated of which HMRC will generally expect you to pay back no more than 50% of that disposable income total.

The time given is variable with there being no higher limit in a time to pay arrangement.

What will HMRC ask me for to set up Time to Pay?

To set up your Time to Pay arrangement HMRC will need information from you about your financial circumstances.

Being prepared for what you may be asked for will help you get everything sorted as easily as possible so we have listed below many of the details that HMRC could ask you for:

Time to Pay for Businesses:

• Your tax bill reference number.
• Are you expecting a repayment of tax from HMRC?
• Do you have other HMRC debts?
• What have you done so far to raise funds to pay your tax bill?
• A projection of your businesses future finances.
• Your business bank account name, sort code and account number to set up your time to pay direct debit payment.

Time to Pay for Individuals:

• Your national insurance number and UTR number if you have one.
• Your marital status.
• The number of dependents you have.
• Your employers PAYE tax reference number (you find this in your online personal tax account).
• The cost of your mortgage or rent.
• The cost of your household bills like electricity, gas, water broadband etc.
• Details of any personal debt like credit cards and loans.
• A breakdown of your average monthly income including any benefits received.
• The value of any assets including your own home and car.
• Details of any investments or savings.

How do I set up a Time to Pay agreement with HMRC?

The way in which you apply for a Time to Pay arrangement depends on your circumstances with most cases being managed online and or over the phone.

HMRC payment support service:

The HMRC payment support service is open to all individuals and businesses and can be contacted initially online through an HMRC digital chat service.

You can also call the payment support service on:

0300 200 3835 open Monday to Friday 8am to 6pm.

Time to Pay for Self Assessment tax bills:

To arrange time to pay for a self assessment tax bill you can call the HMRC self assessment payment support service on:

0300 200 3822 open Monday to Friday 8am to 6pm.

You can also try and set up Time to Pay online without needing to speak to HMRC on the phone. To be able to pay your self assessment bill through Time to Pay you must:

• Owe £30,000 or less.
• Have no other current payment plans or debts with HMRC.
• Not have any outstanding self assessment tax returns.
• Apply for Time to Pay within 60 days of your payment deadline.

HMRC Time to Pay summary

HMRC Time to Pay is a practical option for both the individual or business that owes tax and HMRC who’s job it is to collect what is owed in the quickest time possible.

The key is to get in touch with HMRC as soon as you can because late payment penalties and interest will only get worse over time.

With Time to Pay HMRC is saying we understand that you can’t pay all of what you owe now and will support you by spreading the bill over time.