Taxpayers that cannot pay their tax bill can apply online to set up a time to pay arrangement with HMRC. This includes individuals with self assessment (SA) liabilities, employers with pay as you earn (PAYE) debts and businesses with outstanding VAT bills.
The criteria for applying for a payment plan online, as set out in HMRC’s guidance, are summarised below:
| SA | Employer's PAYE | VAT | |
|---|---|---|---|
| Maximum liability |
£30,000 |
£50,000 | £50,000 |
| Timing | Within 60 days of the payment deadline | Missed deadline to pay employer PAYE bill | Missed deadline to pay a VAT bill |
| Nature of debt | n/a | Debts are five years old or less | Debt for an accounting period that started in 2023 or later |
| Tax return filing | Has filed latest SA return | Has filed employer PAYE and construction industry scheme returns | Has filed all tax returns |
| Other considerations | n/a | n/a | Not if in cash accounting or annual accounting schemes or make payments on account |
In all cases, the debt must be paid off within 12 months and the applicant must have no other payment plans or debts with HMRC.
If the criteria are not met or a longer period is required, it may still be possible to make a time to pay arrangement by phoning HMRC. HMRC requires a direct debit mandate to be set up. To satisfy banking regulations, only taxpayers can arrange time to pay. However, agents may be able to help where negotiations are required.
For further information, see HMRC’s guidance on time to pay arrangements and on how to set up a payment plan.
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