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Introduction to HMRC Time to Pay Arrangements

The HMRC Time to Pay Arrangement (TTP) is a vital financial relief option for UK businesses and individuals facing temporary cash flow difficulties. This enables them to stagger their tax payments over an agreed period and minimise late payment penalties. 

This article offers a look at how Time to Pay Arrangements work, who can apply, and the steps involved in securing an agreement.  

A TTP arrangement can ensure your business stays compliant while managing its tax obligations effectively. 

HMRC Time to Pay Arrangement (TTP)

What Is a Time to Pay Arrangement?

A Time to Pay Arrangement with HMRC is a debt repayment plan for your tax liabilities.  

It’s designed to spread the cost over a more manageable timeframe.  

This arrangement is particularly beneficial for businesses who are temporarily unable to settle their tax bills in full by the due date. 

This provides businesses with the flexibility they need when facing financial challenges without incurring further penalties. 

At present, as of 22nd August 2023, late payment interest rate is 7.75% which as a business you’d really want to avoid.  

Benefits of Securing a Time to Pay Arrangement

Securing a Time to Pay Arrangement can offer quite a few benefits. These include  

  • Avoiding legal action from HMRC,  
  • Preventing late payment penalties, 
  • Protecting your business’s credit rating.  
  • It also allows for better cash flow management, giving your business the breathing space  needed to recover financially. 

How to Apply for a Time to Pay Arrangement

There are several key steps you’ll need to take when applying for a Time to Pay Arrangement. 

  • Preparation: Make sure you gather detailed financial information before applying. These should include outstanding tax liabilities, cash flow forecasts, and a proposed repayment schedule. 
  • Contact HMRC: Reach out to HMRC and discuss your situation with them. You can phone them on 0300 300 2820. You can also now chat online which makes it even easier still. 
  • Negotiation: Be prepared to negotiate the terms of the arrangement, including the duration and monthly payment amounts. So, make sure you know your numbers and how much you think you can afford to pay.  
  • Agreement: Once an agreement is reached, ensure you stick rigidly to the payment schedule to avoid nullifying the arrangement. It is worth noting the arrangements are reviewed regularly and can be shortened or lengthened depending on how the business is doing with repayments.  

Agreements with HMRC are agreed on a case-by-case basis. 

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Maintaining Compliance After an Agreement

After you’ve secured a Time to Pay Arrangement, it’s crucial to meet all payments promptly.  

Failure to comply can result in the arrangement being cancelled and the full debt becoming immediately due, along with potential penalties.  

After you’ve spent the time and energy negotiating a TTP arrangement the last thing you want to do is default on your payments.  

Keep in contact with HMRC and let them know of any changes in circumstances.  

Conclusion: The Importance of Proactive Financial Management

Time to Pay Arrangements can offer a lifeline for businesses and individuals struggling with their tax liabilities.  

However, they should not be viewed as a first resort.  

Proactive financial management and early engagement with HMRC when you recognise potential difficulties in payments is crucial.  

By understanding and utilising Time to Pay Arrangements, when they are necessary, businesses can maintain compliance, protect their financial health, and focus on sustainable growth. 

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    Andy Slinger

    Andy is Head of Marketing for Business Helpline with a wealth of experience Marketing in the financial sector. He has a passion for helping business owners struggling with debts.

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