Unable to settle PAYE bill? Making the most of HMRC’s Time to Pay service

There can inevitably be times when a business might struggle to cover its regular PAYE payments to HMRC.

In such situations, understanding HMRC’s Time to Pay (TTP) service can greatly benefit and alleviate any pressures and stress that come with late payments.

How to use TTP to cover PAYE bills

A TTP is an arrangement between a business and HMRC to spread out the cost of PAYE liabilities over a period of time.

This can be particularly helpful if your business is facing cash flow issues or other financial difficulties.

Rather than facing penalties or accumulating debt, a payment plan allows you to manage your obligations without fear of repercussions.

How does HMRC’s TTP service work?

The Time to Pay service is designed to help businesses experiencing temporary financial challenges.

It allows businesses to pay their outstanding tax liabilities, including PAYE, in instalments rather than a lump sum.

This can alleviate immediate financial pressure and provide breathing room to get finances back on track.

Steps to set up a TTP agreement

Before approaching HMRC, it is important to have a clear understanding of your current financial status. Gather all relevant information about your income, expenses, and any existing debts.

You should also ensure you have accurate calculations of your PAYE liabilities. This includes all deductions for Income Tax and NICs.

Eligibility criteria for a TTP agreement

Once you have the relevant details and confirmed that they are accurate, you must make sure that you are eligible to apply for the service.

HMRC has recently expanded the criteria for the service. You can apply for the service if you:

  • Have missed the deadline to pay an employer PAYE bill
  • Are registered for digital services
  • Owe £50,000 or less
  • Have debts that are five years old or less
  • Do not have any other payment plans or debts with HMRC
  • Have sent any employers’ PAYE submissions and Construction Industry Scheme (CIS) returns that are due

HMRC will work with you to agree on a payment plan that suits both parties. This plan will outline the instalment amounts and the duration of the arrangement.

Once a TTP agreement is in place with HMRC, it is imperative that you do not miss any payments.

Missed payments will result in HMRC sending you letters or visiting you at your workplace, followed by penalties including sending you to a debt collection agency, forcing bankruptcy, or even closing your business.

If you are considering using HMRC’s TTP service for outstanding PAYE submissions and would like assistance with making an application, our payroll experts are here to help. Contact us today.

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