If your limited company cannot set up an HMRC Time to Pay arrangement, first establish what actually happened. An online service saying that the company cannot use that route is not necessarily the same as HMRC considering and refusing a proposal after a discussion. Check the amount and tax period, then contact HMRC through its official payment-support route with a realistic forecast and a clear explanation of what the company can pay. HMRC explains what it asks for when a business seeks a payment plan.
HMRC and lenders make separate decisions. A refusal or restriction on one route does not establish that another will be accepted; the company must show that any proposed payments are affordable.
Was it an online restriction or a decision about your proposal?
HMRC offers an online service to check eligibility for some payment plans. If the company cannot use it, HMRC’s guidance says to contact HMRC and discuss what it can pay. The online result alone may tell you nothing about whether an adviser would agree to a different proposal. If you have already spoken to HMRC, ask which part of the proposal was unacceptable and what information would help it reconsider.
Keep the exact wording of any letter or online message. Note whether it relates to VAT, Corporation Tax or another liability, and whether more than one period is outstanding. A refusal to spread a particular debt should not be confused with a dispute about the tax calculation itself. If the amount appears wrong, address the assessment or return through the appropriate HMRC route as well as dealing with the payment deadline.
Rebuild the cash-flow picture before you call
HMRC says a business seeking a plan should be ready with its tax reference, UK bank details and information about company income and spending. An adviser may ask what the company can pay now, what it can pay each month, what other taxes are due and what assets or savings could reduce the debt. For a company, HMRC will test whether the proposal settles the bill as quickly as is realistically affordable. HMRC: setting up a payment plan.
Prepare a short forecast that a director can explain, not an optimistic single number. It should show opening bank cash, customer receipts with realistic dates, essential operating payments, other tax liabilities and the proposed HMRC instalment. Separate confirmed receipts from invoices that may be delayed. If the proposal depends on a customer paying, show what happens if that payment arrives a month late.
| Question | Evidence to have ready |
|---|---|
| How much is due, and when? | HMRC reference, tax period, return or assessment, and payment history. |
| What can be paid immediately? | Current bank position and payments that cannot sensibly be deferred. |
| What is affordable each month? | A forecast of receipts, wages, suppliers, rent, existing borrowing and other taxes. |
| Why did the shortfall arise? | A concise explanation supported by accounts or debtor information. |
| What if a forecast receipt is late? | A contingency amount or revised dates, rather than a promise the company cannot keep. |
HMRC’s plan guidance is about a genuine assessment of circumstances. It does not promise a particular term or guarantee approval when better paperwork is provided.
Discuss a revised proposal promptly
Use HMRC’s payment-problems contact page rather than a number copied from an old article or a letter you have not verified. Explain whether you used the online tool or spoke to an adviser, and ask what HMRC needs to assess a realistic alternative. If there are several outstanding taxes, say so. Record the date, the name or reference given, the proposal and any next action.
Do not ignore a continuing deadline while preparing a revised plan. VAT late-payment interest begins from the first overdue day under the current regime, and penalties can increase after day 15 and day 30 if amounts remain unpaid. Those are separate from filing a return. The VAT late-payment penalty guide can be read alongside HMRC’s penalty guidance. Corporation Tax has different deadlines and interest rules; check the specific liability.
Compare other ways to settle the bill
Where the company has a temporary cash-flow gap and can afford regular repayments, a VAT or Corporation Tax loan may be worth comparing with a revised HMRC plan. Check the total repayment, fees, payment dates, any guarantee or security, and the effect on cash needed for the next tax period. A loan may allow HMRC to be paid, but it substitutes a lender’s repayment obligation for the tax debt. It does not solve an ongoing deficit by itself.
VAT Loans arranges VAT funding and Corporation Tax funding for UK limited companies. Its VAT loan calculator gives an indication, not an offer. A lender will assess the application and may decline it.
Other possibilities may include collecting overdue invoices, agreeing different terms with a customer or supplier, or using an existing facility. If the forecast still does not cover essential costs and the next tax bill, that is a wider business-finance problem. Deal with it directly rather than repeatedly moving one due date.
A practical sequence for directors
- Read the HMRC message and identify whether it is an online restriction, a specific refusal or an amount dispute.
- Confirm the correct tax period, balance, filing status and payment deadline in the company’s HMRC account.
- Put immediate cash, committed outgoings and other tax liabilities in one short forecast.
- Ask HMRC what would make a revised, affordable proposal workable; document the response.
- Compare any lender proposal using the full repayment schedule and the cash needed for future bills.
- Monitor the agreed route. If the forecast changes, contact the relevant party before missing a payment.
Common questions
Does online ineligibility mean HMRC has refused every payment plan?
No such general conclusion follows. HMRC says companies that cannot set up a plan online should contact it and provide financial information. The result of that discussion depends on the circumstances.
Will HMRC agree if the company offers a larger instalment?
Possibly, but a larger promise is only useful if it is affordable. HMRC asks how the tax can be paid as quickly as possible while checking that the proposal is realistic.
Can a VAT loan be approved after a Time to Pay refusal?
A lender makes its own decision. Being refused by HMRC does not itself prove the company will qualify for borrowing. Compare cost, affordability and timing using an actual offer.
What if a company already has another arrangement?
Tell HMRC. Its payment-plan guidance says a new tax bill may be included in a plan, subject to discussion. There is no universal rule in that guidance that a second liability cannot be considered.
Next step: prepare the company’s figures before speaking to HMRC. If you want to compare a funding option, contact VAT Loans with the tax type, balance and due date so the repayment question can be assessed on the real facts.