Time to Pay Arrangements

What Is Time to Pay?

A Time to Pay (TTP) arrangement is an agreement with HMRC to pay your tax bill in monthly instalments instead of a lump sum. It’s available for most taxes including Self Assessment, PAYE, VAT, and Corporation Tax.^[1]

Setting Up Online (Self Assessment)

For Self Assessment debts up to £30,000, you can set up a payment plan online without calling HMRC. You must:^[2]

Owe £30,000 or less
Have filed your latest return
Be within 60 days of the payment deadline
Have no other outstanding debts or payment plans with HMRC

The online plan lets you spread payments over up to 12 months. If you haven’t filed yet, you’ll need to submit your return first before a plan can be set up.

Larger Debts or Complex Situations

If you owe more than £30,000 or don’t meet the online criteria, call HMRC’s Payment Support Service. They’ll discuss your circumstances and may agree a longer payment plan.^[1]

Have these ready when you call:

Your Self Assessment UTR or PAYE reference
Details of your income and outgoings
How much you can afford to pay each month
Your bank account details

Interest Still Applies

Even with a Time to Pay arrangement, HMRC charges interest on the outstanding amount from the original due date until the debt is cleared. The interest rate is updated regularly and is published on GOV.UK.^[3]

Penalties May Be Avoided

If you set up a TTP arrangement before the payment deadline, you can avoid late payment penalties. HMRC generally won’t charge the initial 5% late payment surcharge if you have a plan in place.^[4]

Don’t wait: Contact HMRC as soon as you know you can’t pay. The earlier you reach out, the more options you’ll have and the better HMRC’s response will be.

If You Miss an Instalment

If you miss a payment, HMRC may cancel the arrangement and demand the full remaining balance. If this happens, contact them immediately to discuss your options.^[1]

Frequently Asked Questions

What is a Time to Pay arrangement with HMRC?

A Time to Pay (TTP) arrangement is an agreement with HMRC to pay your tax bill in monthly instalments instead of a lump sum, typically over up to 12 months.

Can I set up a Time to Pay arrangement online?

Yes, for Self Assessment debts of £30,000 or less. You must have filed your latest return, be within 60 days of the payment deadline, and have no other outstanding HMRC debts or payment plans.

Does a Time to Pay arrangement stop interest charges?

No. HMRC still charges interest on the outstanding amount from the original due date until the debt is fully cleared. However, setting up a plan before the deadline can help you avoid late payment penalties.

What happens if I miss a Time to Pay instalment?

HMRC may cancel the arrangement and demand the full remaining balance. If this happens, contact HMRC immediately to discuss your options.

Sources

If you cannot pay your tax bill on time — GOV.UK
Set up a Self Assessment payment plan — GOV.UK
Interest rates for late and early payments — GOV.UK
Self Assessment penalties — GOV.UK