Time to Pay Arrangements: How to Deal With Tax You Can’t Pay on Time

This guidance is for self-employed individuals and sole traders who are struggling to pay a tax bill on time and want to know whether they qualify for a Time to Pay arrangement with HMRC.

Time to Pay can allow tax to be settled in instalments, but it is not automatic and eligibility depends on your circumstances and timing. Applying when you do not qualify, or applying too late, can lead to interest, penalties, or enforcement action. This page explains how Time to Pay works and when it may be appropriate.

How HMRC Time to Pay Works for Self-Assessment Taxpayers Who Cannot Pay on Time

If you are having trouble paying your tax on time you may be eligible to receive support from HMRC. An online payment plan for Self-Assessment tax bills can be used to set up instalment arrangements for paying tax liabilities of up to £30,000, something many taxpayers explore alongside a tax payment service in London for additional guidance.

Taxpayers that want to use the online option must have filed their latest tax return within 60 days of the payment deadline and intend to pay their debt within the following 12 months or less. Taxpayers that qualify for a Time to Pay arrangement using the self-serve Time to Pay facility can do so without speaking to an HMRC adviser.

Taxpayers with Self-Assessment tax payments that do not meet the above requirements need to contact HMRC to formally request a Time To Pay arrangement. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

HMRC will only offer taxpayers the option of extra time to pay if they think they genuinely cannot pay in full but will be able to pay in the future. If HMRC do not think that more time will help, they can require immediate payment of a tax bill and start enforcement action if no payment is forthcoming.

Risks of Getting Time to Pay Wrong

If you assume that Time to Pay will be granted and delay action, HMRC may treat the tax as overdue. This can result in late payment interest and, in some cases, penalties being charged.

Where tax remains unpaid and no arrangement is agreed, HMRC may move towards debt collection or enforcement action. Once enforcement begins, securing a Time to Pay arrangement can become more difficult, whether handled directly or with support from a tax consultant in London.

In Practice – Why Some Time to Pay Requests Are Refused

In practice, we often see Time to Pay requests refused where HMRC is contacted too late or where the taxpayer cannot demonstrate that the tax will be affordable under an instalment plan. Applications are also commonly rejected where other tax returns are outstanding.

For practical guidance, experienced accountants based in Hammersmith support self-employed taxpayers across nearby areas such as Brook Green and Ravenscourt Park when considering Time to Pay arrangements. At CIGMA Accounting, we help clients judge whether an agreement with HMRC is achievable and advise on how to raise the discussion in a clear, realistic way.

Find out more about our accounting support in London

HMRC explains who may be eligible for a Time to Pay arrangement and how to apply in its official guidance on GOV.UK.

Check Whether You Qualify for a Time to Pay Arrangement

Time to Pay can help spread the cost of a tax bill, but it is only available in certain circumstances. A short review now can help confirm whether you are likely to qualify and what HMRC may expect before you apply.