Can a Time to Pay arrangement help my cashflow?

We’re sorry to hear your business is experiencing a temporary cashflow challenge.

You are not alone as other businesses are also struggling with cashflow right now and staying on top of their monthly tax bills.

In your case, entering into a Time to Pay (TTP) arrangement with HMRC may help.

Time to Pay arrangements are based on the specific financial circumstances of your business and can be tailored for your circumstances. Time to Pay can allow your arrears or future liabilities to be paid over an agreed period of time, most commonly in equal monthly instalments.

Time to Pay can potentially allow the business to avoid late payment penalties, although interest will still be charged at HMRC's official interest rate, which is currently 6.75% per annum.

We would recommend that you contact HMRC as soon as possible if you believe you will be late paying tax. The good news with PAYE debt is that HMRC may allow you to apply for a Time to Pay agreement online using the link in your Business Tax Account. This can speed up the HMRC decision but the following conditions must be met to apply online:

• owe less than £15,000
• are within 35 days of the payment deadline
• plan to pay your debt off within the next six months
• do not have any other payment plans or debts with HMRC
• have submitted any employers’ PAYE submissions and Construction Industry Scheme (CIS) returns that are due

Where the conditions are not met, you will need to contact HMRC and speak with an adviser.

Date published 12 May 2023 | Last updated 11 Jul 2023

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

---