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Does HMRC always allow time to pay before other action is taken?

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Does HMRC always allow time to pay before other action is taken?

We’ve been behind on PAYE for several months now and we’re concerned about the possibility of actions being taken against our company. We would like to resolve this issue by catching up on our taxes as quickly as possible, however we don’t feel that will be possible unless HMRC gives us extra time to pay our debt. Being that we’ve never negotiated with HMRC before, we’re unsure about the likelihood of being granted leniency, especially considering how long we’ve owed taxes. Is a ‘Time to Pay’ instalment plan an ideal option for our business? What do we have to do to qualify and obtain approval for such an arrangement?


It is good that you recognise HMRC’s ability to penalise your company for filing and submitting late taxes but unfortunately, there are a great number of variables which could affect our advice to you. The first consideration would be to look at why you have been submitting taxes monthly and what kind of taxes you are talking about. We are assuming you are referring to PAYE taxes which you have previously been paying on the monthly scheme. Going forward, we would need to assess how much you should have been paying in the previous months. It just might be possible to set you up with an alternative payment plan.

To explain further, companies which are not paying at least £1,500 per month in PAYE taxes and NICs for their employees may be eligible to submit payment quarterly and in some cases even annually! Smaller employers can be set up with a quarterly plan and sometimes when employees are paid taxable income in a single month the payments can be made to HMRC once a year as well.

Now then, the easy answer would have simply been to say no, HMRC does not always allow companies to participate in the Time to Pay (TTP) Scheme. They will first seek to determine whether a company is unable to pay on time or just unwilling to pay. Another factor would be your willingness to communicate with them as soon as you know you will not be making those payments timely. If the taxman sees that you are making an effort to act responsibly, your chances of getting time to pay are much better.

Having said all of this, it is unfortunate that you have already let several months slip by. Contact us at your very first convenience so that we can provide a free consultation to help you understand your options. HMRC may be willing to negotiate with you, but if you let it slide any longer it may not work in your favour. Can they take further actions? Indeed they can, so don’t hesitate to speak with one of our expert insolvency practitioners who can help you resolve the problem before HMRC imposes penalties up to and including distraint.

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Jonathan Munnery
Andrew MacKenzie
Julie Palmer
Jenn Stewart
Keith Tully
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