Time to pay arrangements for tax due under self assessment

By Tolley

(Updated for Budget 2020)

The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

Time to pay arrangements for tax due under self assessment
Can the taxpayer pay?
Is the time to pay arrangement binding on HMRC?
Interaction of time to pay and universal credit
Time to pay and the Spring Budget 2020
Provisional time to pay arrangements
Negotiating the arrangements

A time to pay arrangement is a negotiated agreement between HMRC and the taxpayer to allow for tax to be paid after its due date.

The guidance in this note applies to individuals under self assessment, and for companies paying corporation tax. It does not apply to VAT liabilities or where there is a statutory right to pay by instalments (eg for large companies).

For further details on paying VAT or corporation tax by instalments, see the following guidance notes:

•Paying VAT

•Payment of corporation tax

If a taxpayer becomes aware that they will not be able to pay their tax liability by the due date, then they, or their appointed agent, may be able to negotiate a time to pay arrangement with HMRC. Anecdotal experience from practitioners indicates that the ease with which a time to pay arrangement is agreed can vary, with some arrangements being agreed with little or no questioning, and some taking significantly more negotiation. The amount of tax at stake and the taxpayer’s previous payment history can influence this. A taxpayer with a history of delinquency is less likely to be able to secure an agreement.

HMRC guidance on time to pay arrangements can be found in their manuals from DMBM80000 onwards.

Can the taxpayer pay?

Time to pay is arranged at the discretion of HMRC and it looks to the ‘viability’ of taxpayer in terms of their ability to pay. The taxpayer has no right to be granted time to pay. Each request will be considered on its merits on a case by case basis. The taxpayer will be assessed to determine if they:

DMBM800020

•have the means to make the agreed payments

•have the means to pay other tax liab