Can You Pay Your Income Tax In Instalments?
- MAZ
- 2 days ago
- 18 min read
The Audio Summary of the Key Points of the Article:
Can You Pay Your Income Tax In Instalments? A Complete Guide to HMRC’s Time to Pay Plan for 2025-26
Can You Really Spread Your Tax Bill Over Time?
Yes, you absolutely can pay your income tax in instalments in the UK through HMRC’s Time to Pay (TTP) arrangement, a lifeline for taxpayers struggling to settle their tax bill in one go. If you’re a self-employed freelancer, a small business owner, or just someone hit with an unexpected tax demand, a TTP lets you spread payments over months—sometimes even years—without racking up late payment penalties. For the 2025/26 tax year, this option is more relevant than ever, with HMRC recovering £22.7 billion in unpaid taxes in 2024/25, according to their latest annual report, and cracking down harder on late payments. But it’s not a free pass—interest still applies, and HMRC’s terms can be strict. Let’s break down how it works, who qualifies, and what you need to know to make it work for you.
The TTP arrangement is designed for individuals and businesses facing financial difficulty, covering taxes like Self Assessment income tax, VAT, PAYE, and Corporation Tax. For 2025, the personal allowance remains frozen at £12,570, and income tax bands are 20% (£12,571–£50,270), 40% (£50,271–£125,140), and 45% (over £125,140). If your Self Assessment bill, due by 31 January 2026, is more than you can handle, a TTP could spread that burden over 6–12 months, or longer in exceptional cases.
Tax Band (2025/26) | Income Range | Tax Rate |
Personal Allowance | Up to £12,570 | 0% |
Basic Rate | £12,571–£50,270 | 20% |
Higher Rate | £50,271–£125,140 | 40% |
Additional Rate | Over £125,140 | 45% |
Source: GOV.UK Income Tax Rates
Who’s Eligible for a Time to Pay Arrangement?
Now, not everyone can just waltz into a TTP agreement. HMRC has clear criteria to ensure you’re genuinely unable to pay in full and can stick to the plan. For individuals, you can apply online if you owe £30,000 or less, have filed all your tax returns, and are within 60 days of the payment deadline (e.g., 31 January 2026 for 2024/25 Self Assessment). Businesses seeking TTP for VAT or PAYE face tighter rules: debts must be under £50,001, less than five years old, and all returns must be filed. If you’re in the Cash Accounting Scheme or make payments on account, online applications may not be available, so you’ll need to call HMRC’s helpline at 0300 200 3820.
Here’s a quick example: Meet Aisha, a freelance graphic designer in Manchester. Her 2024/25 tax bill is £8,000, but a slow quarter left her short. She files her return by 30 December 2025 and applies for a TTP online, proposing £800 monthly payments over 10 months. HMRC agrees because she’s up-to-date with filings and her proposal aligns with her disposable income. Interest accrues at 8.5% (as of April 2025) on the outstanding balance, but she avoids penalties.
What Information Does HMRC Need?
So, what does HMRC want from you? They’ll dig into your financial situation to ensure your TTP plan is realistic. You’ll need to provide:
Your Unique Taxpayer Reference (UTR) or other tax reference number.
Details of missed payments or amounts you can’t pay.
Monthly income from all sources (e.g., self-employment, dividends).
Monthly outgoings (rent, utilities, etc.).
Assets or savings that could reduce the debt (excluding pension savings).
HMRC calculates your disposable income (what’s left after essential expenses) and expects up to 50% of it to go toward repayments. Be honest—HMRC doesn’t require proof upfront, but if they later find you’ve understated your income, they can cancel the plan and pursue enforcement action, like seizing assets or wages.
Consider Gareth, a Bristol café owner. His 2024/25 Corporation Tax bill is £15,000, but a supplier dispute drained his cash flow. He calls HMRC, providing a detailed breakdown of his £3,000 monthly income and £2,200 in expenses, leaving £800 disposable income. HMRC agrees to a 12-month TTP of £1,300 monthly, expecting him to use £2,000 from savings to reduce the debt. No penalties, but interest ticks on the unpaid balance.
How Do Interest and Penalties Work?
Be careful! Interest on late tax payments is no small matter. For 2025/26, HMRC’s late payment interest rate is 8.5% per annum, starting from the day the payment was due (e.g., 1 February 2026 for 2024/25 Self Assessment). The good news? A TTP arrangement usually prevents late payment penalties (e.g., 5% of the unpaid tax at 30 days late, another 5% at 6 months) if set up before penalties kick in. Miss a TTP payment, though, and HMRC may demand the full amount, plus penalties.
Let’s say Priya, a London-based consultant, owes £10,000 for 2024/25. She sets up a TTP for £1,000 monthly over 10 months, starting 1 February 2026. Interest accrues on the outstanding balance daily—roughly £2.33 per day (£10,000 × 8.5% ÷ 365). By paying £1,000 monthly, she reduces the balance steadily, cutting the total interest compared to paying nothing until penalties hit.
Month | Balance (£) | Interest/Day (£) | Monthly Payment (£) | New Balance (£) |
Feb 2026 | 10,000 | 2.33 | 1,000 | 9,000 |
Mar 2026 | 9,000 | 2.10 | 1,000 | 8,000 |
Apr 2026 | 8,000 | 1.86 | 1,000 | 7,000 |
Note: Interest is illustrative, assuming constant 8.5% rate.
Can You Set Up a TTP Online or Over the Phone?
Now, setting up a TTP is easier than you might think, especially if your debt is under £30,000. You can use HMRC’s online tool via your Government Gateway account. Log in, select “Set up a payment plan,” and input your financial details. You’ll propose a monthly payment and duration (typically 6–12 months), and HMRC will confirm in writing if approved. For debts over £30,000 or complex cases (e.g., multiple tax types), call the helpline at 0300 200 3820, ideally between 8–11am on weekdays to avoid long waits.
Take Sanjay, a Cardiff IT contractor. His £25,000 tax bill is due 31 January 2026, but a client delayed payment. He uses the online tool, proposing £2,500 monthly for 10 months. HMRC accepts, and he sets up a Direct Debit. If Sanjay owed £35,000, he’d need to call HMRC, as the online tool caps at £30,000, and provide a detailed financial breakdown.
How to Set Up Your Tax Payments with HMRC: A Step-by-Step Process for 2025-26
Step 1: Understand Your Tax Bill and Payment Options
First things first, you need to know exactly what you owe HMRC and what payment options are available. Whether it’s your Self Assessment bill (due 31 January 2026 for 2024/25), VAT, PAYE, or Corporation Tax, HMRC expects payment on time. For 2025/26, the personal allowance is frozen at £12,570, with income tax rates at 20% (£12,571–£50,270), 40% (£50,271–£125,140), and 45% (over £125,140). If you can’t pay in full, HMRC offers a Time to Pay (TTP) arrangement to spread payments, a Budget Payment Plan for advance payments, or a standard Direct Debit for ongoing taxes like VAT.
Take Zara, a Bristol-based freelance photographer. Her 2024/25 Self Assessment bill is £9,000, due 31 January 2026. She can’t pay it all at once due to a slow quarter, so she explores a TTP to spread it over 12 months. To start, she checks her bill on her Government Gateway account at GOV.UK. Knowing your exact liability—down to the penny—is crucial before contacting HMRC.
Tax Type | Payment Deadline | Payment Options |
Self Assessment | 31 Jan 2026 (2024/25) | TTP, Budget Payment Plan, Direct Debit |
VAT | Quarterly or monthly | TTP, Direct Debit |
PAYE | Monthly (by 22nd) | TTP, Direct Debit |
Corporation Tax | 9 months after accounting period | TTP, Direct Debit |
Source: GOV.UK Tax Payment Options
Step 2: Check Your Eligibility for a Time to Pay Arrangement
Now, not everyone qualifies for a TTP, so let’s make sure you’re eligible. For individuals, you can apply if you owe £30,000 or less, have filed all tax returns, and are within 60 days of the payment deadline. Businesses can apply for TTP on VAT or PAYE debts up to £50,001, with all returns filed and debts less than five years old. If you’re on the Cash Accounting Scheme or owe payments on account, you’ll need to call HMRC (0300 200 3820) rather than use the online tool.
Consider Ewan, a Cardiff café owner with a £15,000 VAT bill. He’s filed all returns and is within 60 days of the due date. He qualifies for an online TTP application but needs to gather financial details first. If your debt exceeds £30,000 (or £50,001 for businesses), you’ll need to negotiate over the phone, often with a down payment of 10–20%.
Step 3: Gather Your Financial Information
So, what does HMRC need to know? They’ll want a clear picture of your finances to ensure your TTP plan is affordable. You’ll need:
Your Unique Taxpayer Reference (UTR) or other tax reference number.
Total amount you owe (check via Government Gateway).
Monthly income (e.g., self-employment, wages, dividends).
Essential monthly expenses (rent, utilities, food).
Assets or savings (excluding pensions) that could reduce the debt.
HMRC uses this to calculate your disposable income—what’s left after essentials—and typically expects 50% of it for repayments. Be honest, as HMRC can cancel your plan if you misreport. For example, Meera, a London-based consultant, owes £12,000 in Self Assessment tax. She lists her £3,500 monthly income and £2,800 expenses, leaving £700 disposable income. She proposes £600 monthly payments to show commitment.
Step 4: Apply for a Time to Pay Arrangement
Right, here’s where you take action. If your debt is £30,000 or less, use HMRC’s online TTP tool via your Government Gateway account. Log in, select “Set up a payment plan,” input your financial details, and propose a monthly payment and duration (typically 6–12 months). HMRC will review and confirm in writing. For debts over £30,000 or complex cases (e.g., payments on account), call the Payment Support Service at 0300 200 3820, ideally 8–11am weekdays to avoid long waits.
Let’s say Tariq, a Sheffield Uber driver, owes £10,000. He logs into GOV.UK, proposes £1,000 monthly for 10 months, and sets up a Direct Debit. HMRC approves, adding 8.5% interest (2025/26 rate) on the unpaid balance, roughly £2.33 daily on £10,000. If he owed £35,000, he’d call HMRC with a detailed financial breakdown and a proposed down payment.
Step 5: Set Up a Direct Debit or Budget Payment Plan
Once approved, you’ll need to set up a Direct Debit to ensure payments are automatic and on time. You can do this online via your Government Gateway account or during your phone call with HMRC. Alternatively, consider a Budget Payment Plan to pay future taxes weekly or monthly in advance, reducing the risk of another big bill. For example, Zara (our photographer) sets up a Budget Payment Plan, paying £200 monthly toward her estimated £12,000 2025/26 bill, halving her January 2026 payment.
To set up a Direct Debit, go to GOV.UK’s payment page, select your tax type, and enter your bank details. Double-check the payment dates—missing a TTP payment can cancel your plan, triggering penalties (5% at 30 days) and enforcement actions.
Step 6: Monitor Your Plan and Communicate with HMRC
Be careful! Once your TTP or Budget Payment Plan is running, you need to stay on top of it. Check your Government Gateway account monthly to confirm payments are processed and your balance is decreasing. If your circumstances change—say, your income drops—contact HMRC immediately to adjust your plan. Missing payments risks penalties, debt collection, or even a County Court Judgment (CCJ) for debts over £5,000, which can tank your credit score by 250 points.
Take Nia, a Glasgow hairdresser with a £20,000 TTP. A slow month means she can’t pay £2,000 as agreed. She calls HMRC, explains her situation, and negotiates £1,500 monthly for three months until her income recovers. Proactive communication prevents cancellation and penalties.
What If You Face Challenges During Setup?
Now, things don’t always go smoothly. Common issues include HMRC rejecting your TTP proposal (e.g., if payments are too low), technical glitches with the online tool, or delays in phone responses. If rejected, revise your proposal with higher monthly payments or a down payment and reapply. For technical issues, try a different browser or call HMRC for manual setup. If you’re dealing with fluctuating income, like Owain, a Pembrokeshire tour guide, propose variable payments (e.g., £500 in winter, £2,500 in summer) with supporting income projections.
In 2024, a Nottingham bakery faced a £40,000 Corporation Tax debt. Their initial TTP proposal (£2,000 monthly) was rejected as too low. They called HMRC, offered a £6,000 down payment, and proposed £3,000 monthly, backed by a cash flow forecast. HMRC approved, adding 8.5% interest but no penalties. Persistence and clear documentation are key.
Advanced Considerations for Setting Up a Time to Pay Plan in the UK
What Happens If You’re Already Making Payments on Account?
Now, if you’re self-employed or have income outside PAYE, you might already be making payments on account toward your next tax bill. These are HMRC’s way of spreading your tax liability, requiring you to pay half your previous year’s tax bill by 31 January and 31 July. For the 2025/26 tax year, if your 2024/25 Self Assessment bill was £20,000, you’d pay £10,000 on account by 31 January 2026 and another £10,000 by 31 July 2026, plus any balancing payment for 2025/26. But what if you can’t afford these? Can you include them in a Time to Pay (TTP) plan? The answer is yes, but it’s trickier.
HMRC allows TTP arrangements to cover payments on account, but you’ll need to justify why you can’t pay them alongside your current bill. For example, if your income dropped significantly—say, due to losing a major client—HMRC may let you spread both the balancing payment and payments on account. You’ll need to call the helpline (0300 200 3820), as online TTP applications don’t typically handle payments on account. Be ready with evidence, like bank statements or client contracts, showing your reduced income.
Consider Fiona, a Leeds-based freelance writer. Her 2024/25 tax bill was £12,000, so she owes £6,000 on account by 31 January 2026. A quiet year means she can’t pay this plus her £4,000 balancing payment. She calls HMRC, explaining her income fell 30% in 2025. They agree to a TTP of £900 monthly for 12 months, covering both, with 8.5% interest on the unpaid balance. Fiona avoids penalties but must stick to the plan to prevent HMRC escalating to debt collection.
Can You Negotiate a TTP for Large Debts Over £30,000?
So, what if your tax debt exceeds £30,000? The online TTP tool won’t work—you’ll need to negotiate directly with HMRC’s Payment Support Service. Larger debts require a deeper dive into your finances, and HMRC may ask for proof of income, expenses, or even asset sales (like a second car) to reduce the debt. They’ll also expect a down payment—often 10–20% of the debt—before agreeing to a plan. For businesses, HMRC may scrutinise cash flow forecasts or trading accounts to ensure you can sustain payments.
Take Idris, a Birmingham construction firm owner. His 2024/25 Corporation Tax and VAT debts total £45,000 after a project delay. He calls HMRC, offering a £9,000 down payment (20%) and £3,000 monthly over 12 months, backed by a cash flow forecast showing improved revenue in 2026. HMRC agrees but requires quarterly reviews to ensure his business stays on track. Interest at 8.5% adds roughly £2,200 to the total cost, but Idris avoids bailiff action and keeps his business running.
Debt Type | Max TTP Debt (Online) | Max TTP Debt (Phone) | Down Payment Required? | Typical Plan Duration |
Self Assessment | £30,000 | No upper limit | Yes, for debts >£30,000 | 6–12 months |
VAT | £50,001 | No upper limit | Yes, for debts >£50,001 | 6–24 months |
Corporation Tax | £50,001 | No upper limit | Yes, for debts >£50,001 | 6–24 months |
Source: Adapted from GOV.UK Payment Plans
How Does a TTP Affect Your Credit Score?
Now, here’s something many don’t consider: does a TTP mess with your credit score? The good news is that HMRC doesn’t directly report TTP arrangements to credit agencies like Experian or Equifax. However, if you miss TTP payments and HMRC pursues enforcement—like a County Court Judgment (CCJ) for debts over £5,000—your credit score will take a hit, potentially dropping by 250 points and lingering on your file for six years. Even without a CCJ, late tax payments can indirectly affect your credit if you fall behind on other bills while prioritising HMRC.
For instance, Nia, a Glasgow-based hairdresser, set up a TTP for a £15,000 VAT bill in 2024. She missed two payments due to a family emergency, and HMRC issued a demand for the full amount. Struggling to catch up, she defaulted on a credit card, dinging her credit score by 100 points. Had she contacted HMRC immediately to renegotiate, she could’ve avoided the ripple effect. Pro tip: if you’re struggling, call HMRC early to adjust your plan.
Can You Combine a TTP with a Budget Payment Plan?
Here’s a clever trick: you can pair a TTP with HMRC’s Budget Payment Plan to smooth out future tax bills. A Budget Payment Plan lets you pay your Self Assessment tax weekly or monthly in advance via Direct Debit, reducing the shock of a big bill on 31 January. If you’re already on a TTP for a past debt, you can set this up separately to cover your 2025/26 tax year, especially if you expect steady income.
Let’s look at Tariq, a Sheffield Uber driver. He’s on a TTP for a £10,000 2024/25 bill, paying £1,000 monthly. To avoid another big bill in 2026, he sets up a Budget Payment Plan, paying £200 monthly toward his estimated £12,000 2025/26 tax liability. By July 2026, he’s paid £6,000, halving his final bill. He manages both plans through his Government Gateway account, ensuring he stays penalty-free. You can start a Budget Payment Plan via GOV.UK’s Budget Payment Plan page.
What Are the Risks of Missing TTP Payments?
Be careful! Missing a TTP payment can unravel the whole deal. HMRC may cancel your plan, demand the full balance plus interest, and slap on late payment penalties—5% at 30 days, another 5% at 6 months, and 5% at 12 months for Self Assessment, per HMRC’s 2025/26 rules. Worse, they could escalate to enforcement actions like direct recovery from your wages (for PAYE debts), bank account seizures, or even bankruptcy proceedings for debts over £5,000.
Take Elowen, a Cornwall-based florist. Her £20,000 VAT TTP required £2,000 monthly payments. A supplier issue meant she missed two payments in 2025. HMRC cancelled her plan, added a 5% penalty (£1,000), and threatened to freeze her business account. She renegotiated a new TTP with a £5,000 down payment, but the penalty stuck. Always contact HMRC before missing a payment—they’re often more flexible if you’re proactive.
A Real-Life Lesson from 2024
In 2024, a Nottingham-based IT consultancy faced a £60,000 Corporation Tax debt after a client went bust. They negotiated a TTP over 18 months, paying £3,500 monthly. Halfway through, a cash flow hiccup led to a missed payment. Instead of ignoring HMRC’s letters, they called immediately, providing updated financials. HMRC adjusted the plan to £2,800 monthly for 18 months, adding £1,200 in interest but waiving penalties. The lesson? Communication is key—HMRC’s enforcement team is tough, but their Payment Support Service is often willing to work with you.
How Do You Handle Fluctuating Income in a TTP?
Now, if your income swings wildly—like many freelancers or seasonal businesses—you might worry a TTP’s rigid schedule won’t work. HMRC can tailor plans to your cash flow, but you’ll need to provide detailed projections. For example, a seasonal business might pay smaller amounts in lean months (e.g., winter for a tourism business) and larger sums during peak seasons. You’ll need to negotiate this over the phone, as the online tool assumes steady payments.
Consider Owain, a Pembrokeshire tour guide. His £18,000 2024/25 tax bill is tough to pay in winter, when income drops to £1,500 monthly, but he earns £5,000 monthly in summer. He proposes a TTP of £500 monthly from November to April and £2,500 from May to October. HMRC agrees after reviewing his income patterns, adding 8.5% interest but keeping penalties at bay. If your income is unpredictable, tools like HMRC’s Self Assessment calculator can help estimate your bill and plan payments.
Can You Pay Your Income Tax In Instalments: Summary of the Most Important Points
Now, let’s wrap up everything you need to know about setting up a Time to Pay (TTP) plan in the UK with a clear, concise rundown of the critical points. These are the essentials for UK taxpayers and business owners looking to manage their tax bills effectively in the 2025/26 tax year, drawn from the latest HMRC guidance and real-world scenarios.
% at 30 days), and enforcement actions like wage garnishment or bankruptcy for debts over £5,000.
Online marketplaces like eBay and Etsy report your sales to HMRC if you make 30+ transactions or earn over £1,740 annually, starting from 2024.
The £1,000 trading allowance lets you earn up to £1,000 tax-free from side hustles without reporting, but you must register for self-assessment if you exceed it.
Selling personal items is usually tax-free unless the sale price exceeds £6,000, which may trigger Capital Gains Tax on profits above the £3,000 allowance.
Trading (buying/making goods for profit) requires separating personal and business sales to avoid HMRC confusion.
Keep detailed records of sales, expenses, and original purchase prices for at least five years to support tax filings or audits.
Claim allowable expenses like stock, fees, and postage to reduce your taxable profit, or opt for the £1,000 trading allowance if expenses are low.
Register as self-employed by 5 October following the tax year if your trading income exceeds £1,000, and file by 31 January to avoid penalties.
HMRC’s compliance checks are increasing, with platforms sharing your name, National Insurance number, and transaction details, making under-reporting risky.
Use HMRC’s online tools or helplines to check your tax status and file disclosures to minimise penalties if you’ve made errors.
Plan sales strategically to stay under the £1,000 threshold or maximise deductions to lower your tax bill.
FAQs
Q1: Can you pay other types of taxes besides income tax in instalments through a Time to Pay plan?
A1: Yes, a Time to Pay plan can cover taxes like VAT, PAYE, and Corporation Tax, in addition to Self Assessment income tax, provided the eligibility criteria are met.
Q2: What happens if you fail to provide accurate financial information when applying for a Time to Pay plan?
A2: Providing inaccurate financial information can lead to HMRC cancelling the Time to Pay plan, demanding the full tax amount immediately, and potentially imposing penalties or enforcement actions.
Q3: Can you include future tax liabilities in a Time to Pay arrangement?
A3: Future tax liabilities, like upcoming payments on account, can sometimes be included in a Time to Pay plan, but HMRC requires evidence of financial difficulty and negotiation over the phone.
Q4: Is there a limit to how long a Time to Pay plan can last?
A4: There’s no strict limit, but HMRC typically agrees to 6–12 months for individuals and up to 24 months for businesses, depending on the debt size and financial circumstances.
Q5: Can you set up a Time to Pay plan if you’re already under HMRC investigation?
A5: It’s possible, but HMRC may impose stricter conditions or deny the plan if the investigation suggests deliberate non-compliance or tax avoidance.
Q6: Does setting up a Time to Pay plan affect your ability to get a mortgage?
A6: A Time to Pay plan itself isn’t reported to credit agencies, but missed payments leading to enforcement actions like a County Court Judgment could impact mortgage applications.
Q7: Can you appeal if HMRC rejects your Time to Pay proposal?
A7: There’s no formal appeal process, but you can resubmit a revised proposal with higher payments or additional financial evidence, or contact HMRC to discuss alternatives.
Q8: Are there any fees for setting up a Time to Pay arrangement?
A8: No, HMRC doesn’t charge fees for setting up a Time to Pay plan, but interest at 8.5% per annum applies to the outstanding tax balance.
Q9: Can you set up a Time to Pay plan for a joint tax debt with a business partner?
A9: Yes, but all parties responsible for the debt must agree to the plan, and HMRC will assess the combined financial situation of the partners.
Q10: What documentation is needed for a Time to Pay plan for debts over £30,000?
A10: HMRC may request bank statements, cash flow forecasts, trading accounts, or proof of asset sales to verify your ability to meet the proposed payment schedule.
Q11: Can you pause a Time to Pay plan if you face a temporary financial setback?
A11: HMRC doesn’t typically allow pauses, but you can request a temporary reduction in payments by contacting them immediately with updated financial details.
Q12: Does a Time to Pay plan cover penalties already incurred?
A12: Yes, existing penalties can be included in a Time to Pay plan, but you must negotiate this with HMRC, and interest will still accrue on the penalties.
Q13: Can you set up a Time to Pay plan if you’re unemployed?
A13: Yes, if you owe taxes and meet eligibility criteria, but HMRC will closely scrutinise your income sources and may require minimal payments based on available assets.
Q14: Can a Time to Pay plan be set up for a deceased person’s tax debt?
A14: The executor of the estate can negotiate a Time to Pay plan with HMRC, provided they provide financial details of the estate and meet eligibility requirements.
Q15: Can you use a Time to Pay plan if you’re self-employed but not registered for Self Assessment?
A15: No, you must be registered for Self Assessment and have filed all returns to qualify for a Time to Pay plan for income tax debts.
Q16: Can you negotiate a Time to Pay plan through an accountant or tax advisor?
A16: Yes, an authorised accountant or tax advisor can negotiate a Time to Pay plan on your behalf, provided they have your permission and access to your financial details.
Q17: What happens to a Time to Pay plan if you move abroad?
A17: You can maintain a Time to Pay plan if you move abroad, but you must inform HMRC, provide updated contact details, and ensure payments continue from a UK bank account or equivalent.
Q18: Can you combine a Time to Pay plan with other HMRC debt relief options?
A18: In rare cases, HMRC may consider alternative relief like debt remission, but this is separate from a Time to Pay plan and requires proof of extreme financial hardship.
Q19: Does a Time to Pay plan affect your ability to claim tax refunds?
A19: A Time to Pay plan doesn’t directly affect tax refund eligibility, but HMRC may offset any refunds against your outstanding tax debt.
Q20: Can you set up a Time to Pay plan for tax debts older than five years?
A20: HMRC may allow a Time to Pay plan for debts over five years, but they’ll require detailed justification and may prioritise enforcement if the debt is significantly aged.
About the Author
Mr. Maz Zaheer, FCA, AFA, MAAT, MBA, is the CEO and Chief Accountant of My Tax Accountant and Total Tax Accountants—two of the UK’s leading tax advisory firms. With over 14 years of hands-on experience in UK taxation, Maz is a seasoned expert in advising individuals, SMEs, and corporations on complex tax matters. A Fellow Chartered Accountant and a prolific tax writer, he is widely respected for simplifying intricate tax concepts through his popular articles. His professional insights empower UK taxpayers to navigate their financial obligations with clarity and confidence.
Disclaimer:
The information provided in our articles is for general informational purposes only and is not intended as professional advice. While we strive to keep the information up-to-date and correct, My Tax Accountant makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained in the articles for any purpose. Any reliance you place on such information is therefore strictly at your own risk. The graphs may also not be 100% reliable.
We encourage all readers to consult with a qualified professional before making any decisions based on the information provided. The tax and accounting rules in the UK are subject to change and can vary depending on individual circumstances. Therefore, My Tax Accountant cannot be held liable for any errors, omissions, or inaccuracies published. The firm is not responsible for any losses, injuries, or damages arising from the display or use of this information.
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