Typical situations
- VAT or PAYE has fallen behind and the next filing will make the position worse.
- HMRC has refused, or is unlikely to accept, an informal arrangement.
- A Time to Pay proposal is needed but the cash flow will not support an ambitious repayment curve.
- Enforcement, a statutory demand or a winding-up petition is now in view.
Treat HMRC as a creditor that needs evidence
HMRC can agree Time to Pay arrangements where the business is viable and the proposal is credible. That usually means a clear arrears figure, a cash-flow forecast, a payment that can actually be made, and a reason the position will not simply recur.
A proposal that looks optimistic on paper and fails in the first month is worse than a smaller, reliable plan. The aim is a sustainable arrangement, not a pause that collapses.
VAT, PAYE and corporation tax are not the same problem
PAYE and VAT arrears often signal an immediate cash issue because they are connected to trading and payroll. Corporation tax can sit alongside those pressures, but the enforcement path and the information HMRC will want can differ.
Where several tax heads are in arrears, they should be looked at together with the rest of the creditor position. An HMRC-only conversation that ignores suppliers, lenders or landlord arrears rarely holds.
When HMRC debt becomes an enforcement issue
If HMRC issues a statutory demand or presents a winding-up petition, the timetable tightens. Directors should take advice quickly on whether a Time to Pay arrangement is still possible, whether a restructuring process is more realistic, and what their duties require in the meantime.
Our winding-up petition guide explains the immediate practical steps. For construction businesses, CIS, VAT reverse charge and labour-tax issues are covered on the construction HMRC debt page.
Common questions
Will HMRC always agree Time to Pay?
No. HMRC looks at compliance history, the credibility of the proposal and whether the business can meet ongoing liabilities as well as arrears. A poorly evidenced request can be refused, after which the remaining options are often more formal.
Should we ignore other creditors while we deal with HMRC?
No. HMRC is often the most organised creditor, but supplier, lender and landlord pressure can still bring the company down. The cash plan has to work across the full creditor book.
Is this the same as construction tax support?
No. This page covers HMRC debt for UK companies generally. Construction businesses also face CIS, reverse charge VAT and labour-model issues, which are dealt with on the dedicated construction HMRC debt page.
Related services
Cash flow problems
Restore control of working capital, receipts and overheads before cash pressure becomes a wider solvency issue.
Creditor pressure
Respond to supplier action, statutory demands and winding-up petitions with a plan rather than a series of short-term holds.
Company Voluntary Arrangements
Understand when a CVA can restructure unsecured debt and when another route is more realistic.
Director support
Get a clear view of director duties, personal guarantees, loan accounts and the personal implications of the company's position.
Related insights
Options when a company cannot pay HMRC
A practical guide for UK directors when VAT, PAYE or corporation tax cannot be paid on time, including Time to Pay and the limits of informal arrangements.
What to do if your company receives a winding-up petition
Practical steps for UK company directors after a winding-up petition is threatened or presented, including the effect on bank accounts and the options that may remain.
