HMRC payment plans

A Time to Pay arrangement lets you settle a tax bill in monthly instalments. Smaller Self Assessment debts can often be set up online without phoning, provided your returns are filed; larger or more complex debts go through HMRC's payment support line. Interest continues, but agreeing a plan before the deadline can prevent late payment penalties.

Almost everyone who asks gets one. The mistake is not asking — waiting instead, in the hope that something changes, while the debt collects penalties it did not need to.

Why timing decides the cost

The bill is what it is. What changes is everything attached to it: 5% of the tax still unpaid at 30 days, again at 6 months, and again at 12 months. Agree an arrangement before those points and the penalties can be avoided, while interest continues either way.

Which produces a simple rule. On 31 January, if the money is not there, the useful action is arranging a plan — not waiting to see whether it becomes available.

Before you apply

File the return. HMRC needs an established liability, and an unfiled return is accruing its own penalties in parallel.
Know the figure — including any payment on account, which is often what made the bill unaffordable in the first place.
Work out what you can actually pay each month. A plan you cannot sustain is worse than a longer one you can.
Have your details ready — the reference for the tax, a UK bank account you can set a direct debit on, and a picture of income and outgoings.

What HMRC will ask

For anything beyond the smallest balances: what you earn, what you spend, what you own that could reasonably be realised, and why the bill cannot be paid now. The tone is administrative rather than adversarial — the aim is a plan that will actually be completed.

Answer accurately. A plan agreed on optimistic figures fails in month three, and a failed arrangement is a materially worse starting point than the original conversation.

Sort the bill and the reason for it

We arrange payment plans as part of getting the underlying position right — because a plan on a bill that will repeat next January solves half the problem. Free assessment first.

Ask on WhatsApp Or send an email

Free assessment first. If there is work to do, you get a fixed quote in writing before anything starts.

If you do nothing

Debt collection agencies, direct recovery from your bank account in some circumstances, and ultimately court proceedings — which are public. Every one of those costs more than the tax, and all of them are avoided by a phone call or a form.

If the underlying problem is a bill you did not expect, the fix is upstream: seethe deadlines and why filing in the spring turns January from a discovery into a budgeted payment.

Questions people ask

What is a Time to Pay arrangement?

An agreement with HMRC to pay a tax bill in monthly instalments instead of in one go. It is an ordinary administrative arrangement, not a concession or a black mark — HMRC agrees them in very large numbers every year.

Can I set one up without phoning?

Smaller Self Assessment debts can often be arranged online, provided your returns are filed and you are within the service's conditions. Larger or more complicated debts go through the payment support line, where they will want to talk about income and outgoings.

Does interest still run?

Yes. A payment plan does not stop interest, which accrues on the outstanding balance until it is cleared. What it can prevent is the escalation: 5% of the tax still unpaid at 30 days, again at 6 months, and again at 12 months.

What if I have not filed the return yet?

File it first. HMRC will not usually agree a plan for a liability that has not been established, and an unfiled return is accruing its own separate penalties in the meantime.

What happens if I miss an instalment?

The arrangement can be cancelled and the full balance becomes payable, with enforcement available again. If circumstances change, contact HMRC before the payment is missed rather than after — a revised plan is straightforward, a broken one is not.

Will it affect my credit rating?

A Time to Pay arrangement is not reported to credit agencies. What can affect you is what happens without one: enforcement action, and in the worst cases court proceedings, which are a matter of public record.

Figures are for the tax year shown and change every April. They are general information, not advice — we check the current position for your circumstances before anything is filed.

Reviewed 19 October 2026.

Part of our work on hmrc letters and disclosures — if you want someone to take it off your hands, start with our what your HMRC letter means page.