HM Treasury has announced a stepping up of resource and a specific COVID-19 helpline that businesses can call. TTP allows a business to defer current (as opposed to prospective) tax debts (principally corporation / income tax, payroll taxes and VAT – but theoretically any other tax or duty) by paying in instalments over a 3-12 months period.

As part of the process, directors are expected to provide written confirmation that each instalment will be made.  Further details on the TTP process set out below.

HMRC have made it clear that they see themselves in this instance as lender of last resort (and not of first resort).  Therefore, the taxpayer must demonstrate that all other sources of finance have been pursued and exhausted. It is, however, critical to ensure supporting facts (and documentation) are available to evidence cashflow concerns.

Businesses with a Customer Compliance Manager should discuss this with them in the first instance.  All others are encouraged to contact HMRC’s helpline on 0800 0159 559.  The process can take less than an hour in a simple situation where the amount to be deferred is less than £750K.  Agreement for deferral of larger sums will take longer.


Time to Pay “TTP” is designed to assist all businesses (large and small) and individuals that are unable to pay their tax. It covers most taxes and duties including income tax, corporation tax, VAT, PAYE and National Insurance.

In order to qualify, the business/client must be in genuine difficulty and unable to pay their tax on time and likely to be able to pay if HMRC allowed them more time.

HMRC will look to be flexible and agree TTP arrangements on a case-by-case basis to bring the business's/client's tax back up-to-date on a timescale that is reasonable and appropriate to the situation.

1.         Reviewing Proposals

HMRC can only allow TTP where the taxpayer meets the following conditions:

•           they cannot pay the tax in full by the due date;

•           they have the means to make the agreed payments;

•           they have the means to pay other liabilities that fall due during the TTP period; and

•           the TTP period is as short as possible.

In deciding whether to agree proposals, HMRC need to consider all of the areas below to see if the taxpayer meets the conditions above. The extent to which HMRC consider each of these areas will vary depending upon the amount outstanding and the timescale requested.

2.         HMRC initial considerations

a.         “Can’t pay” or “won’t pay”

The first stage of considering any proposals is deciding whether the taxpayer “can’t pay” or “won’t pay”.

b.         What they have done to raise money

HMRC is not a source of working capital for businesses and HMRC expect taxpayers to have tried to raise funds themselves through normal commercial means before approaching HMRC for a TTP.

c.         Previous compliance

When looking at TTP requests, HMRC need to consider the taxpayer’s past behaviour as this may be indicative of their future behaviour.

d.         Outstanding returns

HMRC need to know how much the taxpayer owes HMRC, and without all of their returns HMRC won’t have an accurate picture.  Where a taxpayer has outstanding returns, HMRC will scrutinize their request and find out why returns have not been submitted.

e.         Ongoing viability

Taxpayers must be able to demonstrate that they are able to meet their repayments and keep up to date with ongoing liabilities. They need to have a plan to avoid repeating the issue that has caused them to fall into debt and HMRC will consider how realistic their plan is.

f.          Assets

Sometimes taxpayers will have assets that they should realise to pay their debts and HMRC may refuse TTP when the taxpayer can easily make payment. In other cases, it will not be reasonable to refuse TTP solely because the taxpayer has assets.

3.         Additional documentary evidence

In some cases, HMRC will need the taxpayer to provide documentary evidence in order to fully consider their request for TTP.  Below is a list of the documents that HMRC may request.

a.         Cash Flow forecasts

HMRC need any cash flow forecast which covers from the current month to a period extending to three months beyond the end of the TTP that the taxpayer has requested. The cash-flow forecast should be provided in a receipts/payments format.

In most cases the taxpayer should be able to provide a cash-flow forecast almost immediately after the phone call as they will need to have prepared a cash-flow forecast to formulate their proposals.

b.         Letter from the bank

HMRC need a letter from the bank showing their current banking facilities. This must

•           be dated - check that it is recent

•           relate to the taxpayer or (if the taxpayer is a company) the group requesting the TTP

•           show the facilities available to the taxpayer (overdrafts, loans etc)

c.         Annual accounts

HMRC need the latest set of annual accounts. If the taxpayer is a company, these should be the full financial statements and include the detailed Trading and Profit & Loss Account, which is usually on the last two pages of a full set of accounts. The taxpayer will need to make sure that this is included.

d.         Management Accounts

If available, HMRC need to see any recent management accounts that the taxpayer has prepared.

e.         Forecast profit and loss account and balance sheet

If available, HMRC need to see a forecast profit and loss account and balance sheet for each month of the TTP request

f.          Other information

If the taxpayer has any other information that they feel supports their request for TTP, then they should send it to HMRC. When TTP is agreed with a taxpayer, the arrangement is subject to a number of conditions that the taxpayer must adhere to. If they do not stick to these terms, HMRC can cancel the arrangement and take legal action to recover any outstanding debt.

4.         HMRC Conditions

a.         The taxpayer must have told HMRC about all of its HMRC debts. If HMRC later discover that the taxpayer has another HMRC debt that they did not tell HMRC about when the TTP was agreed, the arrangement is likely to be cancelled, or exceptionally, reviewed.

b.         The taxpayer must have been honest with HMRC when requesting TTP. If HMRC discover that the taxpayer has been less than truthful with HMRC about their need for TTP and their ability to pay, HMRC can cancel the arrangement.

c.         All future HMRC returns must be filed on time.

d.         All future liabilities must be paid in full and on time. Exceptionally if the taxpayer contacts HMRC before the due date of payment and advises that they cannot pay, HMRC can consider amending the arrangement. For longer self-assessment arrangements that span due dates, future liabilities should be included in the arrangement. The case must be reviewed when payments on account and balancing payments are due to make sure the debt is decreasing.

e.         HMRC expect any repayments due from HMRC to be offset against the debt. If a repayment is made to a taxpayer whilst a TTP arrangement is in place, HMRC may cancel the arrangement.

f.          The taxpayer must inform HMRC of any change in their circumstances and their ability to pay. If HMRC discover that the taxpayer is in position to clear a debt but had a TTP in place HMRC must cancel the arrangement.

g.         In larger cases, the Compliance Accountant may recommend that specific conditions are attached to the TTP arrangement. If there are any special conditions in addition to those above, the taxpayer will be notified in writing

h.         If it becomes clear at any point that HMRC must cancel the arrangement to protect the interests of the Exchequer then HMRC should do so.

 i.          Applicable interest will be charged in all cases where payment is made after the due date irrespective of whether TTP has been agreed or not.