Time to Pay Arrangements (TTP): A guide to
managing tax
liabilities

What is a TTP arrangement?

A Time to Pay (TTP) arrangement is a collaborative agreement between the taxpayer and HMRC, allowing for the gradual settlement of a tax liability over an agreed period. While the typical duration spans six to twelve months, exceptional cases may warrant a more extended period based on the unique circumstances involved.

HMRC assesses each case individually, taking into consideration:

• The financial standing of the individual or company, with a thorough exploration of fund-raising avenues;
• The taxpayer’s history, including any past or current TTP arrangements; and
• The initial upfront payment and the anticipated completion period, factoring in forward interest set at 1% above the current Bank of England interest rate.

It’s crucial to note that non-compliance, missed payments, or late filing of returns during the TTP arrangement may lead to its withdrawal, subjecting the taxpayer to heightened scrutiny throughout the arrangement period.

How to apply for a TTP arrangement?

Self-assessment

Taxpayers meeting the following criteria can conveniently set up a TTP arrangement online:

• Filed and up-to-date tax returns;
• Liability less than £30,000;
• No existing payment plans or debts with HMRC; and
• Application within 60 days after the payment deadline.

PAYE

For those meeting the specified conditions, online setup is possible:

• Missed deadline to pay an employer PAYE bill;
• Debt less than £50,000;
• Payment plan within 12 months and debt less than five years old;
• No other payment plans or debts with HMRC; and
• Submission of employers’ PAYE and Construction Industry Scheme (CIS) returns.

VAT

Online TTP setup is available for taxpayers meeting these requirements:

• Missed deadline to pay a VAT bill;
• Debt less than £50,000;
• Ability to pay the debt in less than 12 months;
• Debt for an accounting period starting in 2023 or later; and
• All VAT returns filed.

TTP arrangements requiring professional assistance

For Corporation Tax liabilities, mixed-tax liabilities, or those exceeding online limits, taxpayers should contact HMRC to discuss TTP arrangements. Proactive communication with HMRC before the payment deadline is recommended. Although interest continues during this period, surcharges won’t apply if a TTP arrangement is formally agreed with HMRC beforehand.

For expert assistance in navigating TTP arrangements with HMRC, contact us today and speak with our Tax Disputes & Resolutions team, who can provide tailored support to your individual circumstances. You can also visit the HMRC website for further information.