--- title: "What is a HMRC Time to Pay (TPP) Arrangement? A Guide to Securing a TPP Agreement" url: https://taxdisputes.co.uk/2025/04/what-is-a-hmrc-time-to-pay-tpp-arrangement-a-guide-to-securing-a-tpp-agreement/ date: 2025-04-07 modified: 2026-06-02 author: "H Shahab Alvi" description: "Facing HMRC tax debt? Our expert guide simplifies Time to Pay (TTP) arrangements. 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A Guide to Securing a TPP Agreement Navigating [tax](https://lexlaw.co.uk/practice-areas/taxation-solicitors-london/) matters and negotiating with HMRC when tax is owing can be tricky, but choosing the right legal and accounting advisers and understanding your obligations and responsibilities can prevent future issues with [HMRC](https://www.gov.uk/government/organisations/hm-revenue-customs). If HMRC are threatening [enforcement action](https://lexlaw.co.uk/hmrc-debt-enforcement-defence-statutory-demand-winding-up-peititon-solicitor-london/) such as by issuing a [statutory demand](https://taxdisputes.co.uk/hmrc-statutory-demand/) or by commencing [winding up](https://lexlaw.co.uk/practice-areas/winding-up-petitions-solicitors-london/hmrc-petition-winding-up/) or [bankruptcy](https://lexlaw.co.uk/bankruptcy-petition-insolvency-annulment-debt-lawyers-london/) proceedings, you can seek to negotiate a repayment plan to stop nuclear action being taken by the Revenue. This guide will help you understand how to manage your tax repayment obligations effectively and avoid potential pitfalls. If you are in dispute with HMRC [our team of ex-HMRC tax professionals](https://lexlaw.co.uk/practice-areas/taxation-solicitors-london/) can help navigate you out of any problems with the taxman. ## What Is Time to Pay (TTP) Arrangement? [Time to Pay (TTP)](https://taxdisputes.co.uk/2023/10/obtaining-hmrc-time-to-pay-agreements-ttp/) is a discretionary arrangement offered by [HM Revenue & Customs (HMRC)](https://www.gov.uk/government/organisations/hm-revenue-customs) that allows taxpayers who are unable to pay their tax liabilities in full by the due date to spread payments over an agreed period. It is designed to assist individuals and businesses facing temporary financial difficulties while ensuring [HMRC](https://www.gov.uk/government/organisations/hm-revenue-customs) collects taxes efficiently. However, [TTP agreements](https://taxdisputes.co.uk/2023/04/understanding-the-importance-of-settling-tax-bills-with-hmrc/) are not automatic and must meet specific conditions laid out by HMRC. ## Who Is Eligible for a TTP Arrangement? [HMRC](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm800000) considers [TTP requests](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm800510) on a case-by-case basis, applying objective criteria to determine eligibility. The key conditions for approval include: - **Financial Hardship**: The taxpayer must demonstrate that they genuinely cannot pay their tax liability on the due date but can afford instalments. - **Means to Pay**: The taxpayer must show they have the means to make regular payments during the TTP period and pay other tax liabilities that arise during this time. - **Short Duration**: [TTP arrangements](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm800040) are typically short-term, often lasting a few months. Agreements exceeding 12 months are rare and require managerial approval. - **Realistic Payment Proposals**: The taxpayer must offer the best payment terms they can realistically afford, with the expectation of increasing payments if their financial situation improves during the TTP period. ## Which Unpaid Taxes Are Covered Under a TTP Agreement? While most taxes can be included in a [TTP arrangement](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm800510), there are specific cases where taxpayers have a statutory right to pay by instalments under legislation. These include: - Tax due on lease premiums under the [Income and Corporation Taxes Act 1988](https://taxdisputes.co.uk/wp-content/uploads/2025/04/Income-and-Corporation-Taxes-Act-1988.pdf). - Employment income net underpayments under [ICTA88/S137(4)](https://taxdisputes.co.uk/wp-content/uploads/2025/04/Income-and-Corporation-Taxes-Act-1988.pdf). - Tax on chargeable gains paid by instalments under the [Taxation of Chargeable Gains Act 1992](https://taxdisputes.co.uk/wp-content/uploads/2025/04/Taxation-of-Chargeable-Gains-Act-1992_compressed.pdf). For all other taxes, TTP is discretionary and must be negotiated directly with HMRC. ## How Does HMRC Assess "Can't Pay" vs "Won't Pay"? HMRC distinguishes between taxpayers who genuinely cannot pay ("can't pay") and those who simply want to delay payment ("won't pay"). This assessment involves reviewing the [taxpayer's financial circumstances](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm518500), including: - Income, expenses, assets, and liabilities. - Whether other tax liabilities can be paid during the TTP period. - Whether the taxpayer has provided truthful information. HMRC will reject applications if it finds evidence of deliberate non-payment or misleading information. ## What Needs to be Shown to Get a TTP Arrangement? The principles governing [TTP arrangements](https://www.gov.uk/guidance/find-out-how-to-pay-a-debt-to-hmrc-with-a-time-to-pay-arrangement) ensure fairness and consistency across all cases (according to HMRC): - **Case-by-Case Basis**: Each application is assessed individually. - **Best Payment Proposals**: Taxpayers must offer realistic instalment plans based on their financial capacity. - **Short Duration**: The repayment period should be as brief as possible. - **Interest Charges**: Interest accrues on late payments, even when a TTP agreement is in place. - **No Reduction in Tax Liability**: [HMRC](https://taxdisputes.co.uk/repayment-fraud/) cannot reduce the amount of tax owed as part of a TTP agreement. ## How Can You Apply for a TTP Arrangement? To request a TTP arrangement: - **Contact HMRC Early**: Reach out as soon as you realise you cannot meet your tax obligations. - **Provide Financial Information**: Submit detailed records of your income, expenses, assets, and liabilities. - **Propose a Payment Plan**: Offer realistic instalment terms that align with your financial situation. Once approved, you must adhere strictly to the agreed terms and notify HMRC if your financial circumstances improve. ## What are the Consequences If You Default on a TTP Agreement? HMRC may cancel a [TTP](https://taxdisputes.co.uk/paye-tax-investigation-disputes/) agreement under certain circumstances, including: - Discovery of new facts that invalidate the arrangement. - Evidence of misleading or untruthful information from the taxpayer. - Failure to comply with payment terms or conditions. - Any other reason that puts tax collection at risk. In cases where Universal Credit is claimed during an ongoing TTP arrangement, [HMRC](https://taxdisputes.co.uk/2024/06/injunction-success-abusive-hmrc-winding-up-petition-dismissed/) will transfer any remaining debt to the [Department for Work and Pensions (DWP)](https://www.gov.uk/government/organisations/department-for-work-pensions). ## Expert HMRC Tax Lawyers Navigating HMRC’s Time to Pay process can be daunting, especially when dealing with complex financial situations or large tax liabilities. Our law firm specialises in assisting individuals and businesses with tax disputes and negotiations with HMRC. We provide: - Expert advice on eligibility for TTP arrangements. - Preparation of detailed applications supported by robust financial evidence. - Negotiation of favourable terms tailored to your unique circumstances. - Representation in disputes or appeals if your application is rejected. With our extensive experience in tax law, we ensure your rights are protected while helping you achieve manageable repayment solutions. ### FAQ: HMRC Time to Pay Arrangements Q: What are the main conditions for HMRC to agree to a Time To Pay (TTP) arrangement? A: For [HMRC](https://taxdisputes.co.uk/2024/06/injunction-success-abusive-hmrc-winding-up-petition-dismissed/) to allow a TTP arrangement, the customer must meet specific conditions. These include: They must have the means to make the agreed payments. They must have the means to pay other tax liabilities that become due during the TTP period. The TTP period must be as short as possible. Q: Will HMRC reduce the amount of tax I owe if I get a TTP agreement? A: No, HMRC will not reduce the amount of tax owed as part of a TTP agreement [(DMBM800040)](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm800040). Q: What happens if my financial situation improves during the TTP period? A: If your ability to pay improves during the TTP period, you must contact HMRC and increase your payments or clear the debt [(DMBM800040)](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm800040). Q: Can I get a TTP arrangement for more than 12 months? A: TTP arrangements exceeding 12 months are exceptional and must be authorised by a manager, with the exception of tax credit cases [(DMBM800040)](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm800040). Q: What if I have a statutory right to pay my taxes in installments? A: If you have a statutory right to pay by installments, you must advise HMRC that you wish to exercise that right [(DMBM800030)](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm800030). Q: What should I do if I can’t specify the exact amount I can pay in the future? A: If you are unable to specify the future increased amount, and HMRC considers the proposal to be acceptable, a TTP based on the initial payment amount (and for the whole of the debt) should be set up. You should be advised to contact HMRC by a specific agreed date to renegotiate the arrangement [(DMBM800040)](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm800040). Q: Will I have to pay interest on the outstanding tax debt if I have a TTP arrangement? A: Yes, applicable interest will always be charged when payments are received after the due date, irrespective of whether a TTP has been agreed or not. When a TTP is agreed, HMRC will usually look to include the interest in the arrangement. Q: What happens if I miss a payment under a TTP arrangement? A: If you do not stick to the terms of the TTP arrangement, HMRC can cancel the arrangement and take legal action to recover any outstanding debt. If a payment is missed, HMRC will usually issue a reminder letter advising you to pay the overdue amount immediately to continue with the arrangement. If the overdue amount is not paid, HMRC will cancel the [TTP arrangement in writing](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm804210). Q: Can HMRC refuse a TTP request? A: Yes, HMRC can reject TTP requests for a number of reasons. Any request that does not meet the conditions of TTP will be rejected. If it is discovered that the customer can pay or that their request is unacceptable, HMRC will reject the request. Repeat requests will also be closely scrutinised. Q: What if I have multiple tax debts? A: When considering a TTP request, HMRC will usually want to know about all of your HMRC debts. If you have debts across different HMRC departments, different specialist offices within [Debt Management and Banking (DMB)](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking) may be responsible for dealing with the request depending on the type and amount of debt. Q: Can a TTP arrangement include future tax liabilities? A: Yes, in [Self Assessment (SA)](https://www.gov.uk/browse/tax/self-assessment) cases, future amounts becoming due should be considered when setting up a TTP arrangement that spans future payment due dates. Customers should be encouraged to include both the existing debt and future liabilities in the arrangement.