What is a Time to Pay (TTP) arrangement?
A Time to Pay agreement is a payment plan between you and HMRC. It allows you to make modest monthly installments toward your tax obligation if you cannot pay it on time.
If you cannot fulfill your tax payment deadline or believe you will struggle to do so, please get in touch with HMRC as soon as possible. The concept may seem overwhelming, but no one likes to see you suffer. If setting up an agreement increases the likelihood of the tax being paid, HMRC will likely consider it.
Do I need to pay interest?
Yes, HMRC will charge you interest on the tax you owe, even if you set up a Time to Pay plan. Interest will start to accrue from the original payment date until the end of the agreement.
How may I get a Time to Pay agreement?
If it’s fewer than 60 days after the payment deadline, and you:
- You have filed your tax return
- owe £30,000 or less
- Do not have any other outstanding debts or payment plans with HMRC
For everything else, contact HMRC and chat with an adviser. They’ll ask for the reference number of the bill you wish to discuss and your (or your business’s) UTR number so these are accessible before the call.
What amount will I have to pay?
The payment plan covers the entire amount owed plus any interest. Still, what you or the business can reasonably afford determines your pay for each installment.
Individuals requesting a payment plan pay no more than 50% of their disposable income. HMRC will perform an ‘income and expenditure’ assessment to determine this.
You will be required to supply your personal information and that of any dependents, as well as information regarding your and your household’s monthly income and spending.
How long may a Time to Pay arrangement last?
This is determined by the amount owed and what you or the business can pay monthly. These agreements are intended to be flexible, allowing the payment schedule to be adjusted if circumstances change.
If your income improves, you can make more outstanding payments over a shorter period, make a lump sum payment, or request extra time if your costs rise or your income falls.
Will my house be protected if I make a Time to Pay arrangement?
HMRC states that they will not require someone to sell their family home to pay their tax obligation; however, if you have other assets, such as a second house or savings, HMRC may discuss them with you. Your pension pot is also secure.
