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What to do if you cannot pay your tax on time

HMRC’s ‘Time to Pay’ arrangement for settling tax debts

HMRC has published a briefing explaining what individuals and businesses need to do if they have problems paying tax bills.

HMRC say that those facing financial difficulties, through business setbacks or a life event that temporarily affects their ability to pay tax should tell HMRC immediately as they may be eligible for a ‘Time to Pay’ arrangement.

‘Time to Pay’ is an agreement between HMRC and a taxpayer that allows fixed repayments of a tax debt to be made over an agreed period and can be considered for all types of tax debt. To ensure that they will recover all payments due in full, HMRC will consider certain criteria, including the taxpayer’s previous payment history and their plan for repayment, before agreeing to this arrangement.

‘Time to Pay’ is not an automatic right and should ideally be sought before a debt becomes due, although a possible arrangement can still be considered after a due date. Penalties can be avoided if ‘Time to Pay’ is agreed before the due date.

Once in place, the arrangement will be monitored and if it is not kept, HMRC may resort to other options, such as enforcement action, to collect the debt.

The issue briefing is available at


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