To negotiate a Time to Pay with HMRC, you contact the Business Payment Support Service or the Debt Management line before your bill falls further behind, explain what you can genuinely afford, and offer a realistic monthly instalment backed by numbers. HMRC agrees an arrangement, not a discount — the debt is still paid in full, just spread over time. Getting the call right matters, because a vague or over-optimistic proposal is the most common reason an offer gets refused.
This guide sets out what to prepare, what HMRC will ask, and how to put together a proposal that stands a realistic chance of being accepted first time.
Before you call: the numbers HMRC will want
HMRC will not agree a payment plan on a promise alone. Before you pick up the phone, gather the figures that show your company's position clearly.
- The exact debt. Which tax (PAYE, VAT, corporation tax), the reference number, and the amount currently outstanding, including any interest already added.
- Cash flow forecast. A simple month-by-month view of money coming in and going out for the next three to six months.
- Bank balance and reserves. What the company holds now, and what buffer it needs to keep trading.
- Other creditors. Suppliers, landlords, or lenders you also owe, so HMRC can see the full picture.
- Reason for the arrears. A short, honest explanation — a lost contract, a late-paying customer, a seasonal dip — rather than no explanation at all.
If you're unsure how the arrears built up or what your wider options look like, it can help to read through Owe HMRC and Can't Pay? Your Options before you call.
How to build a realistic instalment proposal
The strongest way to negotiate a Time to Pay with HMRC is to arrive with a specific, affordable number rather than asking HMRC to name a figure. Work backwards from what the business can genuinely spare each month once wages, rent, and essential suppliers are covered.
A realistic proposal usually includes:
- A monthly amount you can commit to without missing future tax deadlines.
- A proposed length — most arrangements run from three to twelve months, occasionally longer for larger debts.
- A start date, ideally close to the call itself.
- Confirmation that ongoing tax (this quarter's VAT, this month's PAYE) will still be paid on time alongside the instalments.
Avoid over-promising to get the call over with. HMRC checks affordability against your bank statements and forecast, and a plan that later fails puts you back at square one — often with less goodwill next time. For background on how these arrangements work day to day, see HMRC Time to Pay Arrangements Explained.
Contacting HMRC: who to speak to and how
Most companies reach HMRC's Time to Pay team through the Business Payment Support Service, which handles businesses struggling to pay tax on time. If a debt has already reached the enforcement stage, you may instead be dealing with HMRC's Debt Management and Banking team, whose number appears on any letter they've sent you.
- Call before the due date where possible. Contacting HMRC ahead of a missed payment is treated more favourably than calling after enforcement action has started.
- Have your figures ready. The adviser will ask for the numbers above during the call — there's no separate written application for most arrangements.
- Be the person who knows the business. A director or the person managing finances should make the call, not a junior member of staff who can't answer detailed questions.
HMRC's own guidance on contacting them if you cannot pay on time is set out at gov.uk: if you cannot pay your tax bill on time.
Questions HMRC will ask and how to answer
Expect the call to feel like a short financial review rather than a negotiation in the traditional sense. Typical questions include:
- What caused the arrears, and is it a one-off or an ongoing issue?
- What is the company's current bank balance and expected income over the next few months?
- Has the company tried other ways to raise funds — a loan, an overdraft, or director support?
- Can the company still afford to pay ongoing tax on time while repaying the arrears?
- Are there other pressing debts, such as supplier arrears or a bounce back loan?
Answer honestly and specifically. Vague answers ("we're not sure yet" or "it depends") slow the call down and can lead to a shorter arrangement than you actually need. If you don't yet know an answer, it's better to say so and follow up than to guess.
Getting the arrangement confirmed in writing
Once HMRC agrees a proposal, ask for written confirmation of the terms — the total, the instalment amount, the dates, and what happens if a payment is missed. This isn't always sent automatically, so it's worth requesting it during the call.
Keep this confirmation somewhere the whole finance team can find it, and set calendar reminders ahead of each instalment date. Missing even one payment can cause HMRC to cancel the arrangement and demand the full balance immediately, so treat the dates as fixed once agreed.
What to do if the amount offered is unaffordable
Sometimes HMRC offers a shorter arrangement or higher monthly instalment than the business can realistically manage. Pushing back with your own forecast is reasonable — explain, with figures, why the proposed amount isn't sustainable and suggest an alternative.
If HMRC still won't agree a plan the company can afford, or refuses a Time to Pay altogether, it's worth understanding the next steps rather than letting the debt sit unresolved. HMRC Time to Pay Refused? Next Steps covers what typically happens after a refusal and the options that follow.
At this point, many directors find it useful to speak to a regulated insolvency practitioner or solicitor, who can look at the company's full financial position — not just the HMRC debt — and set out the realistic choices available.
Frequently asked questions
Can I set up a Time to Pay arrangement online?
Some smaller, straightforward debts can be arranged through HMRC's online Time to Pay service, generally for self-assessment or for VAT debts under certain thresholds. Larger or more complex company debts, or arrangements that need a longer repayment period, are usually agreed by phone with the Business Payment Support Service.
Is there a minimum or maximum debt size for Time to Pay?
There's no fixed minimum. There's also no hard maximum, but the larger the debt, the more detail HMRC will want on affordability, and the more likely it is to involve a senior officer rather than the general phone line. Thresholds and online eligibility can change, so it's worth checking current figures before you call.
How long can an HMRC Time to Pay arrangement last?
Most arrangements run between three and twelve months. Longer arrangements are sometimes agreed for larger debts, but HMRC will expect stronger evidence that the company can sustain payments over that period.
Will HMRC negotiate the amount I owe, or just when I pay it?
Time to Pay changes the timing of payment, not the amount owed. Interest continues to accrue on the outstanding balance during the arrangement, so the total paid will be slightly more than the original debt.
What happens if I miss a Time to Pay instalment?
HMRC can cancel the arrangement and demand the remaining balance in full, sometimes moving straight to enforcement action. If you know a payment will be missed, contact HMRC before the date, not after — they're generally more flexible when told in advance.
This article is general information, not legal, financial or insolvency advice, and every company's circumstances are different. If you'd like to talk it through, Harbourfirst can introduce you to a regulated insolvency specialist — start an enquiry.