UK-wide tax debt • enforcement differs by nation • figures checked 8 Aug 2026
This is general legal information, not legal advice.

HMRC Time to Pay — Checklist & What to Prepare (UK)

What HMRC actually tests • the online conditions • interest that keeps running • what your proposal must contain • what happens if you do nothing
Quick summary: a Time to Pay arrangement lets you pay a tax debt over a period you can afford instead of on the due date. HMRC agrees it on your means, not on your preference — so the work is in the affordability picture, not in the wording of the letter.
HMRC’s own Debt Management and Banking Manual describes Time to Pay as an arrangement that allows viable customers who cannot pay on the due date to make payments over a period they can afford. HMRC only agrees where it is satisfied you cannot pay on the actual due date, and it expects the best proposal you can realistically afford.
Specialty: preparing a Time to Pay proposal that meets HMRC’s stated criteria — a realistic first payment, a monthly figure you can hold, and a plan that also covers the taxes falling due while the arrangement runs.
If a Self Assessment, VAT or PAYE bill has landed and the money is not there, this page tells you what HMRC is measuring, what to gather before you contact them, and what escalates if you leave it.
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Affordability figures
Proposal structure
Interest & penalties
Enforcement risk
Best for people saying:
  • “I can’t pay my tax bill this month.”
  • “Can I spread it, and how do I ask?”
  • “Do I have to file the return first?”
  • “Does a payment plan stop the interest?”
  • “What do I put in the proposal?”
  • “What can HMRC do if I ignore it?”
You can start with one paragraph. We’ll ask only what’s needed.

How this guide helps

Three steps — clear, practical, risk-aware.
1) File first, then ask
An arrangement is calculated from a known liability. HMRC’s Self Assessment payment plan service requires you to be up to date with your tax returns.
Example: “Return not filed — file it today, then propose.”
2) Build the affordability picture
HMRC states it can only agree Time to Pay based on your means to pay, and cannot base it on other factors. Numbers persuade; explanations do not.
First payment, monthly amount, and what funds the next tax bill.
3) Put it in writing before you call
There is no prescribed form, but a written proposal means you are not doing arithmetic live on the phone against a figure you cannot sustain.
That written page is your Time to Pay proposal.

What a Time to Pay arrangement is — and the test HMRC applies

From HMRC’s own Debt Management and Banking Manual.
  • The purpose. Time to Pay arrangements allow viable customers who cannot pay on the due date to make payments over a period they can afford.
  • The threshold question. HMRC only agrees Time to Pay where it is satisfied the customer cannot pay the liability on the actual due date, and it expects the customer to offer the best payment proposals they can realistically afford.
  • Means, not preference. HMRC states it can only agree Time to Pay based on the customer’s means to pay, and cannot base it on other factors. A proposal built on “I would rather keep the cash in the business” is refused on its own terms.
  • “Viable” looks forward. HMRC must be satisfied you will have the means to pay the taxes inside the arrangement and any other taxes outside it that fall due during the Time to Pay period. A plan that consumes every spare pound and leaves nothing for the next VAT or PAYE payment fails this test.
  • Staying on track is a condition. HMRC warns that you must keep up with the payments or it could ask you to pay the whole amount in full.

Setting one up: online, or by phone

The published self-serve conditions below are the Self Assessment ones. Check the relevant HMRC service page for VAT and for Employers’ PAYE — they have their own rules.
HMRC’s Self Assessment payment plan service lets you set a plan up without phoning, but only if you meet all of these:
Returns up to date
You must be up to date with your tax returns. Filing is a precondition, not a formality.
£30,000 or less
The amount owed must be £30,000 or less.
No other tax debts
And no other HMRC payment plans already set up.
Direct Debit authority
You must be able to authorise a Direct Debit without a signature from any other account holder, and be named on the UK bank account used. A joint account needing a second signature stops the online route.
If you do not meet those conditions you are not shut out — you phone instead. HMRC says to call and find out whether a plan can be set up over the phone. The Self Assessment payment helpline is 0300 123 1813 (from outside the UK, +44 2890 538 192), Monday to Friday, 8am to 6pm.

A payment plan buys time — it does not stop the meter

Rates below were checked on 8 August 2026 and change with the Bank of England base rate. Re-check the HMRC rates page before you rely on a number.
  • Interest runs through the arrangement. HMRC’s Self Assessment payment plan service states that payments include interest charged at the Bank of England base rate plus 4% per year. Spreading the debt does not freeze the interest on it.
  • Current rates. As at 8 August 2026, HMRC late payment interest is 7.75% and repayment interest is 2.75%, both effective from 9 January 2026. Late payment interest has been set at base rate plus 4% since 6 April 2025; repayment interest is base rate minus 1%, with a 0.5% floor.
  • Self Assessment late payment penalties are separate, and on top. GOV.UK states you get penalties of 5% of the tax unpaid at 30 days, at 6 months and at 12 months, and that you are also charged interest on the amount owed. The cost of doing nothing escalates on a calendar, not gradually.
We deliberately do not tell you that agreeing a plan by a particular day avoids a particular penalty. That is widely repeated online, but the official penalties guidance we checked does not say it. Ask HMRC directly what your penalty position will be if a plan is agreed.

What your Time to Pay proposal must contain

Each item below is tied to a criterion HMRC has published — not to practice folklore.
  • The amount owed and which tax it relates to. Plans run per liability, and having no other tax debts is a condition of the online route.
  • Confirmation your filing is up to date. Without it there is nothing to arrange.
  • What you can pay today as a first payment, and the monthly amount after that. HMRC wants the best you can realistically afford, so a token offer is measured against your own figures.
  • How you will meet the taxes falling due during the plan. This is the item most proposals leave out, and it is an express part of HMRC’s viability test.
  • Why you cannot pay on the due date — stated as a means position (income received, income lost, money committed elsewhere), because that is the only basis on which HMRC can agree.
  • Bank details in your own name with single-signature Direct Debit authority.
Formalities: a Time to Pay proposal has no statutory form, needs no witness, no notary and no registration. Nothing we checked prescribes a layout or a signature block. The one real formality is the Direct Debit authority. What makes a proposal acceptable is the affordability picture behind it, not how it is laid out.
This is general legal information, not legal advice.

Four things people get wrong

Each of these costs money, and all four are avoidable.
“I’ll ring once I’ve got the money together.”
HMRC’s test is whether you can pay on the due date. Interest at base plus 4%, and the fixed 5% Self Assessment penalties at 30 days, 6 months and 12 months, all run while you wait. Delay makes the arrangement bigger, not easier.
“I can’t ask for time until I’ve filed.”
Half right, and the wrong half gets acted on. You must file first — but filing is the thing to do immediately, not the thing to postpone. There is no version of this where an unfiled return helps you.
“A payment plan stops the interest.”
It does not. Interest is charged at Bank of England base rate plus 4% per year across the plan. Time to Pay buys time, not a discount.
“I’ll offer the smallest instalment they’ll take.”
HMRC expects the best proposal you can realistically afford, and tests whether you can also meet the next taxes falling due during the plan. An artificially low offer that ignores the next VAT quarter fails on HMRC’s own stated criterion.

What HMRC can do if you do not contact them

This is HMRC’s own published list, not a worst case we invented.
GOV.UK sets out seven things HMRC can do if you do not contact it or refuse to pay: instruct a debt collection agency; collect what you owe directly from wages or monthly pension payments; take and sell things you own (if you live in England, Wales or Northern Ireland); take money directly from your bank or building society savings (same three nations); take you to court; make you bankrupt; or close down your company if the tax is a business tax. It adds that costs such as auction fees are normally added to your debt.
  • You get a warning first. GOV.UK states HMRC will tell you before it takes enforcement action, and explain your rights, the costs and your options.
  • Goods: written notice plus seven clear days. HMRC’s manual states goods must not be taken control of unless the debtor has been given notice in writing of the debt, and that an enforcement agent cannot take control until seven clear days have passed since that notice — the legal minimum.
  • A controlled goods agreement ties your hands. GOV.UK states you can continue to use the items but cannot sell them or give them away while the agreement is in force.
  • Collection can be forceful. GOV.UK states that whoever is collecting the goods can use a locksmith to enter premises to remove them if necessary, without needing a warrant from the courts or giving you any notice first.
If HMRC has already moved towards insolvency — bankruptcy for an individual, winding up for a company — that is a different and more urgent problem. See our statutory demand and director duties pages below, and take advice quickly.

The tax debt is UK-wide. The enforcement is not.

Where you live changes which powers HMRC uses against an unpaid debt.
  • England & Wales. Enforcement is by taking control of goods under the Taking Control of Goods Regulations 2013.
  • Northern Ireland. The equivalent process is distraint, operated under HMRC’s Debt Management and Banking Manual, using a walking possession agreement rather than a controlled goods agreement.
  • Scotland. Neither of the above applies. HMRC applies for a summary warrant through the sheriff court under section 128 of the Finance Act 2008. GOV.UK also limits two of its enforcement descriptions — taking and selling goods, and taking money directly from a bank or building society account — to people living in England, Wales or Northern Ireland.
  • Ireland, the United States, Australia and Canada. HMRC is a UK tax authority only. None of this page — the £30,000 online threshold, the base-plus-4% interest, the 5% Self Assessment penalties, the seven clear days’ notice — has any application to Revenue in Ireland, the IRS or any US state revenue department, the ATO or the CRA.
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Long FAQ (HMRC Time to Pay)

Tap to expand. Plain English, UK-wide, with the enforcement differences flagged.
1) What is a Time to Pay arrangement?
An arrangement with HMRC that lets a viable customer who cannot pay on the due date make payments over a period they can afford. It is HMRC’s own description in its Debt Management and Banking Manual.
2) Can I set one up without phoning?
For Self Assessment, yes — if you are up to date with your tax returns, owe £30,000 or less, have no other tax debts, have no other HMRC payment plans, and can authorise a Direct Debit on an account in your name without another signature. VAT and Employers’ PAYE have their own service pages and their own rules; check those directly.
3) Do I have to file the return first?
Yes. Being up to date with your tax returns is a stated condition, and the arrangement is calculated from a known liability. File, then propose.
4) Does a plan stop interest?
No. HMRC’s service states payments include interest at the Bank of England base rate plus 4% per year. As at 8 August 2026, HMRC late payment interest is 7.75%, effective from 9 January 2026.
5) What penalties am I facing on Self Assessment?
GOV.UK states penalties of 5% of the tax unpaid at 30 days, at 6 months and at 12 months, with interest charged on the amount owed as well. We do not repeat the common claim that agreeing a plan by a set day avoids the first 5% — the official penalties guidance we checked does not say that. Ask HMRC.
6) How much should I offer?
The best you can realistically afford, tested against a second requirement: that you can also pay the taxes falling due while the plan runs. Work out both figures before you contact HMRC.
7) Is there an official Time to Pay form?
No statutory form, no witness, no notary and no registration. The one real formality is the Direct Debit authority. What decides the outcome is the affordability picture, not the layout.
8) What if I miss a payment under the plan?
HMRC warns that you must keep up with the payments or it could ask you to pay the whole amount in full. Contact HMRC before a payment is missed rather than after.
9) Can HMRC take money from my bank account?
GOV.UK lists taking money directly from bank or building society savings among the things HMRC can do, and states that this applies if you live in England, Wales or Northern Ireland.
10) How much notice do I get before goods are taken?
HMRC’s manual states goods must not be taken control of without written notice of the debt, and that an enforcement agent cannot take control until seven clear days have passed since that notice.
11) Is it different in Scotland?
Yes. Taking control of goods and distraint do not apply. HMRC applies for a summary warrant through the sheriff court under section 128 of the Finance Act 2008.
12) Can Dogetlawyer draft the proposal?
Yes — AI Lawyer can turn your figures into a written Time to Pay proposal with an affordability summary, using your one free document build. It is a starting point, not legal or tax advice, and it does not contact HMRC for you.
13) When should I get professional help instead?
If enforcement has started, if HMRC is talking about bankruptcy or winding up, if you are a director worried about personal exposure, or if the debt is large relative to the business, get advice from a qualified accountant or an insolvency practitioner quickly.

 

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This is general legal information, not legal advice.