An HMRC Time to Pay refused decision means HMRC has looked at your proposal and decided not to agree it — usually because of affordability concerns, a poor payment history, or missing information, not because no further options exist.
It can feel like the end of the road, but directors in this position usually still have choices: ask HMRC to reconsider, submit a stronger second proposal, or explore formal options with a regulated insolvency practitioner if a payment plan genuinely isn't achievable.
This article explains why Time to Pay (TTP) requests are refused, whether you can reapply, and what tends to happen if HMRC won't agree a payment plan.
HMRC Time to Pay Refused: Common Reasons
HMRC assesses every Time to Pay request against affordability, compliance history and the company's ability to meet future tax on top of the arrears. A Time to Pay rejected decision usually comes down to one or more of the following:
- Poor compliance history — late filing, missed payments, or a previous arrangement that broke down.
- Unrealistic instalments — the proposal doesn't match what the company's own figures show it can afford.
- No clear source of repayment — HMRC can't see where the cash to fund instalments will come from.
- Repeat requests — this isn't the first Time to Pay arrangement for the same debt, or arrears keep recurring.
- Incomplete information — missing management accounts, cash flow forecasts, or bank statements.
- Signs of underlying insolvency — the figures suggest the company can't pay its debts as they fall due, regardless of a plan.
If you're unsure how HMRC Time to Pay Arrangements Explained work in the first place, it's worth understanding the standard criteria before working out why a specific request was refused.
Can you appeal or ask HMRC to reconsider?
There's no formal statutory right of appeal against a refused Time to Pay request — it's a discretionary decision by HMRC's Debt Management team, not a tax assessment with tribunal appeal rights.
That doesn't mean the decision is final. You can:
- Ask the case officer to explain exactly why it was refused, and what evidence would change the outcome.
- Request that a more senior officer reviews the case, particularly if new financial information has come to light.
- Raise a formal complaint through HMRC's complaints process if the decision seems to have ignored relevant facts.
- Submit a revised proposal addressing the specific reasons given, rather than repeating the original request.
In practice, a stronger second proposal tends to get further than a straight challenge to the first refusal.
How to strengthen a second proposal
HMRC is more likely to agree a payment plan when the proposal is evidenced, realistic and clearly affordable. Before you reapply for Time to Pay, it helps to:
- Prepare an up-to-date cash flow forecast showing how instalments will be funded month by month.
- Show what's changed — cost reductions, new contracts, or a director's own additional support, for example.
- Offer a shorter repayment period with higher instalments if the company can genuinely sustain it.
- Include management accounts and bank statements so HMRC isn't asking for missing detail again.
- Get an accountant or adviser to check the figures stand up before you submit.
For a step-by-step approach, see How to Negotiate a Time to Pay With HMRC, which covers how to frame a proposal HMRC is more likely to accept.
What HMRC may do if no plan is agreed
If HMRC won't agree a payment plan and the debt remains unpaid, enforcement action can follow. This can include:
- Debt collection contact, including from a dedicated Debt Management officer.
- Taking control of goods (distraint) to recover the value of company assets.
- A County Court Judgment against the company.
- A winding-up petition, which is advertised in The Gazette and can lead to compulsory liquidation if unresolved.
HMRC's own guidance on what happens when a business can't pay sets out the general process it follows before enforcement escalates — see HMRC's guidance on paying what you owe.
Not every refused request leads straight to enforcement — but the risk increases the longer the debt sits with no agreed plan and no contact from the company.
When refusal signals the company is insolvent
Sometimes a Time to Pay refusal isn't really about the proposal — it's a signal that the underlying figures don't add up. This is worth taking seriously if the company is cash flow insolvent (it can't pay debts as they fall due) or balance sheet insolvent (liabilities exceed assets).
Directors have duties under the Insolvency Act 1986 once they know, or ought to know, that insolvency is likely — continuing to trade without regard to creditors' interests can expose directors personally. This is why a second or third TTP refusal is often the point to get independent advice rather than keep trying the same route.
When HMRC Arrears Mean Insolvency looks at how to tell the difference between a temporary cash flow problem and genuine insolvency.
Formal options when Time to Pay isn't available
If Time to Pay genuinely isn't achievable, there are still formal, structured routes a regulated insolvency practitioner can advise on, including:
- A Company Voluntary Arrangement (CVA) — a formal agreement to repay creditors, including HMRC, over an agreed period.
- Administration — a court-backed process giving the company protection from creditor action while a rescue or restructure is worked out.
- Creditors' Voluntary Liquidation (CVL) — a director-led, orderly closure when the company can't continue to trade.
Each of these is a formal legal process with different implications for directors, employees and creditors, and none of them is right for every situation. If you're still weighing up whether HMRC arrears mean it's time to look beyond Time to Pay, Owe HMRC and Can't Pay? Your Options sets out the wider range of options available to directors.
Frequently asked questions
Can I reapply for Time to Pay after being refused?
Yes. There's no rule against reapplying, but a second request needs to address the specific reasons the first was refused — updated figures, a more realistic instalment amount, or missing evidence — rather than simply repeating it.
How long does HMRC take to decide on a Time to Pay request?
Simpler cases handled through HMRC's automated or telephone process can be decided quickly, sometimes within a call. Larger or more complex arrears usually go to a dedicated case officer, which can take longer, particularly if further information is requested.
Will HMRC issue a winding-up petition straight after a refusal?
Not usually straight away. Enforcement typically escalates in stages, and HMRC generally expects some engagement first. But a petition becomes more likely the longer a debt goes unpaid with no contact or agreed plan.
Does a refused Time to Pay affect my company's credit rating?
The refusal itself isn't reported, but any resulting enforcement action — such as a County Court Judgment or a winding-up petition — can be visible publicly and may affect how suppliers and lenders view the company.
What if the company can't afford any instalment plan at all?
This is often the clearest sign that Time to Pay isn't the right tool, and that it's worth speaking to a regulated insolvency practitioner about formal options rather than submitting further proposals HMRC is unlikely to accept.
This article is general information, not legal, financial or insolvency advice. Every company's position is different, and directors should speak to a regulated specialist about their own circumstances.
If you'd like to talk it through, Harbourfirst can introduce you to a regulated insolvency practitioner or solicitor who can look at your specific situation — start an enquiry.