What to do if you can't pay your company's tax bills

Affected by Covid-19? Immediate Rescue Or Closure Options Available

FAST Free Director Advice & Support, With 100+ offices Nationwide our Licensed Insolvency Practitioners can Help Today.

Updated: 9th September 2021

Can I get extra time to pay business tax debts?

If you’re struggling to pay business tax debts, it may be possible to negotiate with HMRC for extra time to pay. Their Time to Pay (TTP) arrangement is a valuable facility offering a financial breathing space, and helps to avoid hefty penalties for late or non-payment.

Not all businesses can successfully negotiate extra time to pay, however, and some must find other ways to repay their arrears. So what exactly is a Time to Pay arrangement, and how should you approach negotiations with HMRC?

Extra time to pay business tax arrears

Time to Pay arrangements are generally offered to businesses with good payment records, and that are proactive when contacting HMRC. You should get in touch as soon as you know you won’t be able to pay, as this demonstrates commitment to solving the problem.

Unfortunately, getting into debt with HMRC is a serious issue as they pursue late payers relentlessly, particularly if they believe the financial problems are not short-term. HMRC have the power to quickly close down insolvent businesses, which makes negotiating for extra time to pay a crucial part of the process.

How does TTP work?

A Time to Pay arrangement is an instalment plan that repays tax arrears, generally over a period of up to 12 months, but potentially longer. You negotiate with HMRC for an affordable amount whilst continuing to pay your current tax liabilities, so it’s important to establish what exactly is affordable for your business.

This is where professional help is crucial as HMRC focus on the time it takes to repay the debt, and are likely to press for higher monthly repayments so they can recover their money quickly. If you can’t afford to maintain the repayments and the arrangement subsequently fails, HMRC are likely to close down your business using a winding up petition.

  • Negotiating with HMRC for 35 Years
  • 1000’s Successful TTP Arrangements
  • Full Support from Start to Finish
Visit Time To Pay Experts
Expert HMRC Time To Pay Support
60 Second Online Assessment Available

Negotiating for extra time to pay your tax debts

When putting together a proposal for more time to pay, you need to be sure the company can meet this new obligation on a monthly basis over the full term of the agreement. You also need to provide supporting evidence to HMRC.

Supporting documentation could include:

  • Cash flow forecasts for the following six months at least
  • Projections of sales over the same period
  • Plans for cost-cutting, and how much cash this would release each month
  • A statement detailing the background to your current financial situation, and your commitment to meeting both your tax arrears and ongoing tax liabilities

What can influence HMRC’s decision on extra time to pay?

  • Whether there have been any issues with your business in the past - if it has a good record of payment, for example, or if they believe you’re deliberately avoiding payment.
  • Your overall financial position and the outlook for the future – if they believe your problems are not temporary, they may take legal action to recover the debt.
  • The speed with which you contact them initially - we cannot stress enough the importance of being proactive in this way if you fall behind with tax payments.
  • The level of repayment you’re offering – this dictates the speed with which they recover their money.
  • The risk they face of not recovering the arrears by offering you extra time to pay.

If you’re not offered extra time to pay your tax arrears

If negotiations are unsuccessful and you aren’t offered extra time to pay, there may be other options that would help you out of financial difficulty. Depending on your circumstances, these could include:

Additional finance

Poor cash flow is at the heart of insolvency, so seeking an additional source of finance is a good option. A number of alternative business financing solutions are available that offer flexibility, and aren’t necessarily dependant on good credit ratings.

  • Invoice finance may be a viable choice if your business operates a strong sales ledger and you have minimal bad debts. It’s a flexible way to secure regular working capital, with a fast application process compared with more traditional types of lending.
  • If your business is asset-rich but cash-poor, leveraging the value of your business assets would introduce a cash lump sum to repay HMRC and potentially other creditors.

  • Low-cost Finance for UK Businesses
  • Funding 1,000+ Limited Companies Since 1989
  • Broad Range of Financial Products
Visit UK Business Finance
Refused a CBILs or Bounce Back Loan?
Alternative Finance Options Available

Company Voluntary Arrangement (CVA)

A Company Voluntary Arrangement is a formal insolvency solution whereby you make a single affordable monthly repayment, which is distributed to creditors according to the agreement. If structured correctly, HMRC may be willing to include their debt in such an arrangement.

For more information on extra time to pay HMRC arrears, call one of our licensed insolvency practitioners. Real Business Rescue is the UK’s leading business recovery practice and can assist you in your dealings with HMRC. We offer free same day consultations With 100 offices stretching from Inverness down to Exeter, Real Business Rescue can offer unparalleled director advice across the UK.

Jonathan Munnery


0800 644 6080
Director Support - Business suffering from Cash-Flow Problems?
If your company is financially distressed, we also offer the below services:
Business debt recovery

  • Recover Unpaid Invoices of £5k+
  • Expert Credit Control Services
  • Stop Late Payers & Bad Debts
Visit Site
Time to pay experts

  • Get Breathing Space with HMRC
  • Support with Business Tax Arrears
  • 35 Years HMRC Negotiation
Visit Site
UK Business Finance

  • Rejected for a CBILS Loan?
  • Get Emergency Business Funding
  • Supporting 1000+ UK Companies
Visit Site
Who we help
  • Company Directors
  • Finance Directors
  • Sole Traders
  • Accountants
  • Small Businesses
  • Large Businesses
  • Partnerships
Contact our team
Jonathan Munnery
Gillian Sayburn
Julie Palmer
or Find your Nearest Office

Here at Real Business Rescue we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See PRIVACY POLICY

Business Rescue Advice for Directors
Free Guide for Limited Company Directors
Business Rescue Advice for Directors
  • How to manage company cash flow problems
  • Advice on dealing with HMRC
  • Understanding rescue and closure options
  • And much more...
Free Guide Download
Dealing with your Insolvent Clients
Business Rescue Guide for Accountants
Dealing with your Insolvent Clients
  • Helping you advise insolvent clients
  • Spotting signs of client distress
  • Exploring business rescue options
  • And much more...
Free Guide Download
Our numbers speak for themselves
Number of UK Offices
Directors Helped
Licensed Insolvency Practitioners

This site uses cookies to monitor site performance and provide a more responsive and personalised experience. You must agree to our use of certain cookies. For more information on how we use and manage cookies please read our PRIVACY POLICY