HMRC Time to Pay — Key Facts
- HMRC TTP interest rate: Bank of England base rate + 2.5% p.a. (approx 7.75% in 2026)
- Online self-service: SA debts ≤ £30,000 only, within 60 days of deadline
- For VAT, PAYE, Corporation Tax: contact HMRC Business Payment Support Service
- Payments calculated on reducing balance — early repayment saves interest
- HMRC phone number: 0300 200 3835
Time to Pay Calculator
Enter your total HMRC debt, repayment period, and any upfront payment to calculate monthly instalments and total interest cost.
Interest rate used: 7.75% p.a. (Bank of England base rate approx 5.25% + 2.5%). Actual HMRC rate changes with base rate movements.
What is a Time to Pay Arrangement?
A Time to Pay (TTP) arrangement is a formal agreement with HMRC to spread outstanding tax debt over a period of time, usually in equal monthly instalments. TTP is available for most UK taxes including Self Assessment income tax, VAT, PAYE, and Corporation Tax. HMRC's standard position is that tax should be paid in full by the due date, but TTP recognises that businesses and individuals can face genuine temporary cash flow difficulties.
Interest accrues on the outstanding balance throughout the arrangement at the HMRC late payment interest rate, which is set at the Bank of England base rate plus 2.5% per annum. As of early 2026, with the base rate around 5.25%, this means an effective rate of approximately 7.75% per annum. This is charged daily on the reducing balance — so the sooner you pay down the debt, the less total interest you pay.
It is important to understand that a TTP arrangement is not automatic. You must apply, and HMRC assesses whether you genuinely cannot pay in full immediately, whether you have explored other options (such as borrowing from a bank), and whether the arrangement is realistic based on your financial position.
Online Self-Service TTP for Self Assessment
For Self Assessment taxpayers, HMRC offers an online self-service TTP facility. This allows you to set up an arrangement without needing to phone. The online service is available if you meet all of the following criteria: your SA debt is £30,000 or less in total; you have filed your most recent Self Assessment return; you are within 60 days of the payment deadline; and you do not already have a TTP arrangement or direct debit in place with HMRC.
If you meet these criteria, you can log into your Personal Tax Account at gov.uk and set up the arrangement directly. The system allows you to choose a repayment period of up to 12 months and calculates your monthly payment automatically. Payments are collected by direct debit.
If your SA debt exceeds £30,000 or you are outside the 60-day window, you need to contact HMRC's Business Payment Support Service (BPSS) on 0300 200 3835 to discuss a bespoke arrangement.
TTP for VAT, PAYE and Corporation Tax
There is no equivalent online self-service facility for VAT, PAYE, or Corporation Tax debts. For these, you must contact HMRC directly. HMRC expects prompt contact — ideally before the payment deadline rather than after enforcement action has started. Calling early demonstrates good faith and gives HMRC more flexibility to agree a longer arrangement.
For businesses with ongoing VAT or PAYE obligations, HMRC also expects current liabilities to be met on time while the TTP covers historical arrears. An arrangement that covers past debt while allowing new debt to build is not typically sustainable and HMRC will not usually agree to it.
Corporation Tax TTP requests should be made to HMRC's Corporation Tax department. The principles are the same — interest accrues throughout, the arrangement must be realistic, and HMRC may ask for evidence of the business's financial position.
What Happens if You Miss a TTP Payment?
If you miss a payment, HMRC may cancel the arrangement and treat the full outstanding balance as immediately due. This can lead to enforcement action including county court proceedings, distraint of goods, or referral to a debt collection agency.
If you anticipate difficulty making a payment, you should contact HMRC proactively before the payment date. HMRC generally prefers to modify an arrangement rather than cancel it entirely, as this results in better debt recovery outcomes for both parties. However, HMRC has limited patience for repeated missed payments or arrangements that were unrealistic from the start.
Frequently Asked Questions
What is a Time to Pay arrangement with HMRC?
A TTP arrangement is an agreement with HMRC to spread outstanding tax payments over an agreed period. Interest accrues at Bank of England base rate plus 2.5% per annum on the outstanding balance throughout the arrangement.
Who can use the HMRC online Time to Pay service?
Online self-service TTP is available for Self Assessment debts up to £30,000, where you have filed your most recent tax return, are within 60 days of the payment deadline, and have no existing TTP arrangement or direct debit in place.
What interest rate does HMRC charge on TTP?
HMRC charges interest at Bank of England base rate plus 2.5% per annum. With the base rate at approximately 5.25% in early 2026, the TTP interest rate is approximately 7.75% p.a. The rate changes when the Bank of England adjusts rates.
Can I set up a TTP for VAT or PAYE debts?
Yes, TTP can be set up for VAT, PAYE, Corporation Tax, and Self Assessment. For VAT and PAYE you must phone HMRC's Business Payment Support Service (0300 200 3835) as online self-service is only available for Self Assessment.
Does a TTP arrangement stop penalties?
A TTP agreed with HMRC stops further late payment surcharges from the date it is set up. Interest on the outstanding balance continues to accrue throughout the arrangement period until fully paid.
What happens if I miss a TTP payment?
Missing a payment may cause HMRC to cancel the arrangement, making the full outstanding balance immediately payable. Contact HMRC before missing a payment if you anticipate difficulty — they generally prefer to modify arrangements rather than cancel them.
Can I pay a lump sum upfront and spread the rest?
Yes. You can pay any portion upfront and arrange TTP for the remaining balance. Paying a larger upfront sum reduces the outstanding balance on which interest accrues, reducing total interest cost.
Does HMRC TTP affect my credit rating?
HMRC TTP arrangements are not reported to credit reference agencies. However, if HMRC debt proceeds to enforcement action such as county court judgments, those can affect credit records.
Can TTP be set up for more than 12 months?
The online self-service facility typically allows up to 12 months. Longer arrangements can sometimes be agreed by phone for genuine hardship cases, but HMRC's preference is repayment within 12 months where possible.
How does HMRC assess whether I can afford a TTP?
For online SA self-service TTPs within the qualifying thresholds, affordability is not individually assessed. For phone-based arrangements, HMRC may ask about income, expenditure, and assets to set a realistic monthly payment.
Is there a minimum TTP debt threshold?
There is no published minimum. HMRC generally expects payment in full if you can afford it. TTP is for genuine temporary cash flow difficulties, not a preference to defer payment.
What is the HMRC Business Payment Support Service phone number?
The HMRC Business Payment Support Service can be reached on 0300 200 3835. For Self Assessment TTP enquiries, you can also call 0300 200 3822. Lines are open Monday to Friday.