Falling behind with VAT, PAYE or Corporation Tax can be one of the most stressful situations a company director faces. The good news is that if your business is experiencing temporary cash flow difficulties, HM Revenue & Customs (HMRC) may agree to a Time to Pay (TTP) Arrangement.

A Time to Pay Arrangement allows your business to repay outstanding tax debts over an agreed period, rather than in one lump sum. While approval is never guaranteed, many businesses successfully negotiate payment plans that give them valuable breathing space to recover.

At Parker Walsh, we help directors assess whether a Time to Pay Arrangement is likely to be accepted and, where appropriate, support negotiations with HMRC.

What Is a Time to Pay Arrangement?

A Time to Pay Arrangement is an agreement between your business and HMRC that allows outstanding tax liabilities to be paid in monthly instalments instead of immediately.

It is designed for businesses that:

• Are experiencing temporary cash flow problems.
• Cannot pay their tax bill in full by the due date.
• Have a realistic prospect of clearing the debt over time.
• Can continue meeting future tax obligations while repaying arrears.

HMRC considers each application individually. They will look at whether your business remains viable and whether the proposed repayment plan is affordable.

Which Taxes Can Be Included?

A Time to Pay Arrangement may be available for:

• VAT arrears
• PAYE and National Insurance
• Corporation Tax
• Self Assessment tax (for eligible individuals)
• Some other HMRC liabilities

For limited companies, the most common arrangements involve VAT, PAYE and Corporation Tax debts.

Who Can Apply?

Time to Pay Arrangements are suitable for businesses experiencing short-term financial pressure, rather than businesses that are no longer viable.

You may be eligible if:

• Your company is still trading.
• Cash flow problems are temporary.
• You can demonstrate future profitability.
• You have realistic cash flow forecasts.
• You are willing to engage with HMRC early.
• Your tax returns have been submitted.

The earlier you seek advice, the more options are usually available.

How Long Does a Time to Pay Arrangement Last?

Every agreement is different. Many arrangements last between 6 and 12 months, although longer repayment periods can sometimes be agreed where supported by detailed financial evidence and where doing so offers HMRC a better outcome than formal insolvency.