HMRC payment plan (Time to Pay)
If you cannot pay a tax bill on time, HMRC may agree a payment plan so you can pay it off in monthly instalments instead of all at once.
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How it works
A payment plan (often called Time to Pay) lets you spread an overdue tax bill over monthly Direct Debit payments.
- You may be able to set one up online. If not, you contact HMRC and explain what you can pay, your income and spending, and any savings or assets.
- HMRC checks the plan is affordable. You are usually asked to pay around half of what you have left each month after essential outgoings.
- There is no set time limit. It depends on how much you owe and what you can afford.
- Interest is charged, so paying faster costs less overall.
If your company owes tax, HMRC will want to see how you will pay as quickly as you can. You may be expected to release assets such as stock, vehicles or shares first, and HMRC may ask directors to put in personal funds or arrange lending.
Upsides and downsides
Upsides
- Avoids enforcement action if HMRC agrees a plan
- No arrangement fees
- Flexible length, based on what you can afford
- Can sometimes be set up online
Downsides
- Interest is charged on the overdue tax
- HMRC will expect you to use savings or sell assets first
- Company directors may be asked to put in personal money
- You cannot appeal if HMRC refuses a plan, though you can complain about how you were treated
Risks
- If you miss payments or do not agree a plan, HMRC can use debt collectors, take money from bank accounts, take you to court, or close your company
- New tax bills on top of the plan can make it unaffordable
What it costs
- How it is priced
- Interest on the overdue tax until it is paid
- Costs that are easy to miss
- Interest keeps building while the plan runs
- You may be expected to sell assets or use savings to reduce the debt first
The overdue tax you owe. Some plans can be set up online, others need you to contact HMRC.
Does it fit?
Could fit when
- You owe tax that you cannot pay in full by the deadline
- Your business is viable and can pay over time
Unlikely to fit when
- The business cannot afford even reduced payments (get debt advice first)
- You do not owe tax that you are struggling to pay (Time to Pay only spreads tax you already owe)
Who can use it
- Business types: Sole trader, Partnership, Private limited company, LLP, Public limited company, Community interest company, Co-operative or community benefit society, Charity
- You owe tax that you cannot pay in full
- HMRC must agree that the plan is affordable
- You need the tax reference number, UK bank account details and details of income and spending
Am I ready?
What a provider is likely to ask for. Tick what you have. Your ticks stay in this browser and nothing is stored. Checklist for all own cash and no-cost
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- Tax reference number
- Income and spending figures
- A realistic proposal
Regulation and protections
An arrangement with HMRC. You cannot appeal against HMRC's decision on a payment plan, but you can complain about how you were treated. Free debt advice is available from MoneyHelper (England and Wales), Scotland Debt Solutions and Advice NI.
Types of provider: HMRC.
Also consider
Sources
- GOV.UK: If you cannot pay your tax bill on time (printable guide) · checked 7 October 2026