Tax owing?

HMRC offers Time to Pay (TTP) where a business or individual is struggling to make a tax payment because of genuine financial hardship or personal difficulties.

TTP can be used for business taxes, such as VAT and employers’ PAYE, as well as self assessment liabilities. It can cover all outstanding amounts overdue, including penalties and interest.

You can set up a repayment plan online, without any need to phone HMRC, where the total debt is below a particular threshold. Businesses can apply online where up to £100,000 is owing and individuals owing up to £30,000. To use the online application service, there are also certain other conditions. These can be found on gov.uk, on the page ‘If you cannot pay your tax bill on time’. If you fall outside these criteria, it may still be possible to arrange TTP, but a phone call to HMRC will be needed.

There is no standard TTP arrangement. Monthly repayments are always worked out on an individual basis, with reference to specific financial circumstances. They can be varied over time, again based on individual circumstances. The length of the arrangement depends on how much is owed, though the aim is always to repay as quickly as possible. HMRC generally expects repayment within 12 months. Anything longer than this is viewed as ‘exceptional’.

Interest still runs on any overdue tax, even where there is a TTP arrangement.

Note, too, that HMRC normally expects any new debt to be paid in full and on time.