Debt can be owed to HMRC for a variety of reasons, the best payment solution is different for each individual and business.
HMRC takes its responsibility seriously to make sure that individuals and businesses who can pay, do so on time. We provide extra, bespoke support to those facing financial hardship or who have personal difficulties.
If you’re finding it difficult to make a tax payment you should ask us about affordable monthly payment options, called a Time to Pay arrangement. We’ll always try to work with you to negotiate time to pay what you owe based on your income and expenditure.
Time to Pay arrangements are based on the specific financial circumstances of whoever owes a debt, so there is no ‘standard’ Time to Pay arrangement. We look at what you can afford to pay and then use that to work out how much time you need to pay.
A Time to Pay arrangement can cover all outstanding amounts overdue, including penalties and interest. Check HMRC interest rates for late and early payments.
The arrangement is designed to be flexible and is not a fixed, formal contract. It can be amended over time, so it can be shortened if your earnings rise or if you receive a cash windfall (for example, an inheritance). It can also be lengthened if your essential expenses increase, or your income reduces.
Over 90% of our Time to Pay arrangements are completed successfully.
How we work out debt repayments
Individuals
We’ll decide your ability to pay using an ‘income and expenditure assessment’ form. This looks at your income, disposable assets and expenditure to help us work out your disposable income. You can find more information about this in the ‘how we work out what you can afford to pay’ section.
HMRC typically expects you to pay no more than 50% of your disposable income. This may be higher if you have a very high disposable income. There’s no upper limit on the amount of time that someone can have to pay.
Businesses
Business finances are often complex, so we’ll ask you to tell us what you think the business can afford to pay.
After we have looked at your proposal, we’ll ask you questions about it to make sure it’s affordable and pays off the debt as quickly as possible.
The length of the arrangement will depend on:
- how much your business owes
- the business’ financial circumstances
The arrangement will be reviewed regularly and can be adjusted over time.
If you cannot pay your tax bill and need help you should contact HMRC as soon as possible.
For Self Assessment bills, you may be able to set up a payment plan online. This will let you pay your Self Assessment tax bill in instalments without contacting HMRC.
You can set up a payment plan to spread the cost of your latest Self Assessment bill online without calling us if:
- you owe £30,000 or less
- you do not have any other payment plans or debts with HMRC
- your tax returns are up to date
- it’s less than 60 days after the payment deadline
What to expect during a call
When you phone us we’ll ask you some questions, so make sure you have the following information when you call.
Individuals
We may ask you:
- the reference number relating to the bill that you want to discuss
- details of the amount of tax that you cannot pay, covering all debts outstanding to HMRC
- why you’re not able to pay, and what your current financial circumstances are — outlined in the ‘how we work out what you can afford to pay’ section
- what you have done to try to pay your bill on time and in full
- about your current financial position (including income and expenditure, savings, investments and other assets)
- how you expect your finances to change in future
- questions to check if a Time to Pay arrangement would be the best payment solution
- for your bank account details, so you can set up a Direct Debit for your arrangement
Businesses
We may ask you:
- for the reference number relating to the bill that you want to discuss
- about any other debts the business owes HMRC
- about any tax repayments owed to the business
- for information about the business’ financial position — including how you expect the business’ finances to change in the future
- what efforts have been made to raise the funds against the business’ debt
- what has been done to try to pay the tax bill
- what the business has done or is doing to get its tax affairs back on track and to afford repayments
- for the business’ bank account details, so that a Direct Debit can be set up (the caller will need the authority to set up a Direct Debit on that account)
How we work out what you can afford to pay
Individuals
We’ll use an ‘income and expenditure assessment’ form to record details of how much money you receive and spend, we’ll ask you:
- for your personal details (including your marital status and if you have any dependants)
- for your employment details (including your VAT registration number if you’re VAT-registered and your employer’s PAYE reference number if you’re an employee)
- if you own or rent your home and the cost of your mortgage or rent
- for details of your household’s average monthly income (including any rental income and any benefits you receive)
- for details of any assets you hold (such as the value of all of your property, if you own any motor vehicles and how much you paid for them and when)
- for information about any savings and investments you have (including saving certificates, Premium Bonds, Individual Savings Accounts and stocks and shares)
- how much you spend each month on household bills (including gas, electricity, water and Council Tax payments) and commuting, petrol, food, clothing and any television packages you might have
- for details of any other debt you have (including loans, hire purchase and credit cards)
- for information about any creditors you may owe money to (including debt that’s outstanding to them and the payments you make)
- how you plan to pay off your tax debt
If you have discussed what you can afford with an independent debt adviser (such as Citizens Advice) we’ll accept their income and expenditure figures if they are shown on their Standard Financial Statement. You should send the completed statement to the HMRC address shown on the latest letter we have sent you about your debt. Make sure the statement includes your:
- National Insurance number
- Self Assessment Unique Taxpayer Reference (if you have one)
Based on the information you give, we’ll work out your monthly disposable income. This is your monthly surplus income after deducting your monthly spending.
Usually, we’d expect 50% of your disposable income to be paid into your Time to Pay arrangement. We expect you to pay 50% rather than 100% because we want:
- your arrangement to be sustainable
- for you to be able to manage any unexpected changes in expenditure
You may wish to pay more than 50% to reduce the amount of interest you pay.
If you have a high disposable income but still need more time to pay, we’ll work with you to agree a level of payment that balances clearing the debt quickly with your reasonable monthly expenses. This may mean that you pay more than 50% of your disposable income.
If your income and expenditure information shows that you do not have enough disposable income, we’ll pause our collection activity until your circumstances change.
The length of the arrangement will depend upon how much you owe. There’s no upper limit on the length of an arrangement.
Your time to pay will be based on the information you have shared with us. We’ll make sure that your monthly payment reflects what you can afford to pay so that it’s sustainable over the length of the agreement. To help us support you in doing this:
- be open and honest during the payment plan discussion
- be ready to explain unusual or large items of expenditure
- provide all the information we ask for
We’ll usually accept what you tell us without asking for more details, but we may need more detail or evidence if your debt is large or complex.
Businesses
We’ll review the information you have given us in your phone call.
We may ask questions about your proposal, to make sure it:
- is affordable
- pays off the debt as quickly as possible
The length of the arrangement will depend upon how much your business owes and its financial circumstances. It will be reviewed regularly and can be adjusted over time.
The arrangement can either be:
- shortened if the business’ financial position improves
- lengthened if the business’ financial position worsens but remains in a position to recover
How assets are treated when we agree a Time to Pay arrangement
Individuals
If you have the means to pay your HMRC liabilities by realising assets (for example, savings, shares, or a second home) then we’ll discuss this with you.
If you have assets that both you and HMRC agree can be realised (including equity in a property), then we expect you to do so to reduce the debt as much as possible before we agree an arrangement.
We’ll not ask you to sell your family home. We may consider taking a charge on your home to secure the debt payable to HMRC if:
- it’s not possible to agree a Time to Pay arrangement with you
- you’re not able to pay by any other means
We’ll not expect you to access pension funds early to pay your debt. If you receive a pension this will be taken into account as part of your income and expenditure position.
Businesses
If your business can pay its HMRC liabilities by releasing assets, then we will discuss this with you. Assets can include:
- stock
- vehicles or shares
- directors putting personal funds into the business
- business lending
- extending credit lines
If we agree with you that there are assets your business can release (including equity in a business property) then we would expect them to be used to reduce the debt as much as possible before we agree a Time to Pay arrangement.
Debts that can be included in a Time to Pay arrangement
Any tax, duty, penalties or surcharges that you cannot afford to pay can be included.
Interest charged on Time to Pay arrangements
Interest accrues from the due date to the end of the Time to Pay arrangement.
The interest payable will be included in overall debt covered by the arrangement.
You can find out information about interest payable on tax debts and charges in HMRC interest rates for late and early payments.
After a Time to Pay arrangement has been agreed
If payment instalments are made on time
No further action will be needed and future time to pay requests will be considered.
If you have a change in circumstances
You should contact us if your situation:
- improves and you can pay the bill quicker, to increase your monthly payment
- worsens, to check how we can reduce your monthly payments
If you cancel your Direct Debit or if a payment fails
If you cancel your monthly payments or payments fail, we’ll contact you. We’ll ask why the monthly payment was not paid. We may be able to restore the payment arrangement or renegotiate it if appropriate.
If we cannot contact you, or we’re not able to renegotiate how much you should pay, we may decide to use our tax debt enforcement powers to collect what you owe. We only use these powers as a last resort.
If you have another new debt to HMRC
We expect new debt to be paid in full, and on time. You should contact us as soon as possible if you cannot pay your tax bill in full.
If you’re already making monthly payments into a Time to Pay arrangement, then this can be amended to include this new debt. Before we can do this, we’ll need to talk to you about your:
- income
- expenditure
- asset position
Published 20 January 2020
Last updated 4 November 2021 +show all updates
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Welsh translation added.
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The guidance has been updated to cover businesses as well as individuals.
(Video) HMRC Time to Pay -
How to contact HMRC to discuss a time to pay arrangement has been updated to add when you can set up a payment plan online.
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First published.
FAQs
Will HMRC let me pay in installments? ›
If you can't afford to pay your tax bill in one go then HMRC can offer tailored support that takes account of a person's individual needs. Debt Management (DM) at HMRC may agree to payment by instalments.
How do I pay HMRC directly? ›Send your payslip and cheque, both unfolded and not fastened together, to HMRC. You can make a transfer from your bank account by Faster Payments, CHAPS or BACS. Your bill will tell you which account to pay in to. If you do not have a bill, or you're not sure, use HMRC Cumbernauld.
What is the debt balance of the HMRC? ›At £39 billion in November 2021, tax debt is more than double the £16 billion it was before the pandemic. HMRC must also manage an additional 2.4 million taxpayers who, on average, owe more money and require longer to pay.
What number is 0300 200 3823? ›If the debt is still outstanding on the SA statement and the customer wants to pay or discuss time to pay, you should refer them to the DMTC contact number 0300 200 3823. For anything else related to coding out debts, you should contact Worcester by WAM or email if you have no access to WAM.
Will HMRC waive penalties? ›HMRC penalties can be expensive and stressful – but, thankfully, sometimes they can be appealed. If you have a reasonable excuse, your penalty may be amended or waived after an appeal.
Can you pay tax you owe in installments? ›Your specific tax situation will determine which payment options are available to you. Payment options include full payment, short-term payment plan (paying in 180 days or less) or a long-term payment plan (installment agreement) (paying monthly).
How do I pay off my tax debt? ›- Set up an installment agreement with the IRS. Taxpayers can set up IRS payment plans, called installment agreements. ...
- Request a short-term extension to pay the full balance. ...
- Apply for a hardship extension to pay taxes. ...
- Get a personal loan. ...
- Borrow from your 401(k). ...
- Use a debit/credit card.
Bank details for online or telephone banking, CHAPS, Bacs
Use sort code 08-32-10, account number 12001020 and account name 'HMRC Shipley'. Your payment reference is 1076007138A00101A.
If you find that you cannot pay the full amount by the filing deadline, you should file your return and pay as much as you can by the due date. To see if you qualify for an installment payment plan, attach a Form 9465, “Installment Agreement Request,” to the front of your tax return.
What happens to HMRC debt? ›The answer to the question can you write off HMRC debts is generally you do not get your HMRC debt written off. However, if you can't afford to pay HMRC then they will in effect write the debt off if you go into insolvency such as Bankruptcy, IVA, or in the case of a company Liquidation.
Does tax debt affect credit score? ›
Does the IRS Report to Credit Bureaus? The IRS does not report your tax debt directly to consumer credit bureaus now or in the past. In fact, laws protect your tax return information from disclosure by the IRS to third parties (see the Taxpayer Bill of Rights).
Who is the UK national debt owed too? ›The British government's debt is owned by a wide variety of investors, most notably pension funds. These funds are on deposit, mainly in the form of Treasury bonds at the Bank of England. The pension funds, therefore, have an asset which has to be offset by a liability, or a debt, of the government.
How do I call a 0300 number from the US to the UK? ›Calling these numbers from outside the UK
To do so, you will need to drop the 0 from the start of the number and instead dial +44 followed by the rest of the number.
mailbox.sdrt@hmrc.gsi.gov.uk for stamp duty reserve tax queries. optiontotaxnationalunit@hmrc.gsi.gov.uk for queries on opting to tax properties.
What is this number 02086654953? ›Who Called Me from 02086654953? 🛑 The company who called you from 02086654953 is CCS Collect Debt Collectors. The company has over 40 years of experience and assist customers throughout the UK who are in financial difficulty.
Do I have to pay all my taxes at once? ›Do I Have To Pay My Taxes All at Once? No, you don't. If you can pay your taxes, but just not quite at the tax due date, here's what you should do. File your return and pay whatever you can.