Questions and Answers
Can a Time to Pay arrangement help my cashflow?
My business is temporarily struggling with cashflow and I’m worried I won’t be able to pay HMRC my PAYE liability this month, will HMRC help me?
By Andy Gibbs, ATT, CTAWe’re sorry to hear your business is experiencing a temporary cashflow challenge.
You are not alone as other businesses are also struggling with cashflow right now and staying on top of their monthly tax bills.
In your case, entering into a Time to Pay (TTP) arrangement with HMRC may help.
Time to Pay arrangements are based on the specific financial circumstances of your business and can be tailored for your circumstances. Time to Pay can allow your arrears or future liabilities to be paid over an agreed period of time, most commonly in equal monthly instalments.
Time to Pay can potentially allow the business to avoid late payment penalties, although interest will still be charged at HMRC's official interest rate, which is currently 6.75% per annum.
We would recommend that you contact HMRC as soon as possible if you believe you will be late paying tax. The good news with PAYE debt is that HMRC may allow you to apply for a Time to Pay agreement online using the link in your Business Tax Account. This can speed up the HMRC decision but the following conditions must be met to apply online:
- owe less than £15,000
- are within 35 days of the payment deadline
- plan to pay your debt off within the next six months
- do not have any other payment plans or debts with HMRC
- have submitted any employers’ PAYE submissions and Construction Industry Scheme (CIS) returns that are due
Where the conditions are not met, you will need to contact HMRC and speak with an adviser.
Date published 12 May 2023 | Last updated 11 Jul 2023
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
Andy Gibbs, ATT, CTA
Andy is a qualified Chartered Tax Adviser (CTA), holds the STEP Advanced Certificate in Trust and Estate Accounting, and has dealt with both tax compliance and tax advisory projects across a range of industry sectors. He joined us from one of the big four accountancy firms where he looked after the affairs of high-net-worth individuals and private equity executives. Prior to this he worked at a local regional practice where he dealt with the affairs of owner managed businesses and private individuals. In January 2024 Andy was promoted from Head of Group Technical, to Director of Services, leading two of our Group companies which provide payroll and tax consulting support to our network of accountants. Andy also manages a highly qualified and experienced team providing technical support and offering practical solutions in relation to the accounting, tax and practice needs of TaxAssist franchisees and staff.
Choose the right accounting firm for you
Running your own business can be challenging so why not let TaxAssist Accountants manage your tax, accounting, bookkeeping and payroll needs? If you are not receiving the service you deserve from your accountant, then perhaps it’s time to make the switch?
Local business focus
We specialise in supporting independent businesses and work with 100,000 clients. Each TaxAssist Accountant runs their own business, and are passionate about supporting you.
Come and meet us
We enjoy talking to business owners and self-employed professionals who are looking to get the most out of their accountant. You can visit us at any of our 409 locations, meet with us online through video call software, or talk to us by telephone.
Switching is simple
Changing accountants is easier than you might think. There are no tax implications and you can switch at any time in the year and our team will guide you through the process for a smooth transition.