HMRC Time to Pay - Key Facts 2026
| Aspect | Detail | Implication |
|---|---|---|
| Interest rate | 7.75% p.a. from 9 January 2026 (BoE base rate + 4%) | Higher than the pre-April 2025 rate (base rate + 2.5%). Significantly more expensive than 2021-2022. |
| Penalty avoidance | Penalties paused while TTP is in place - IF agreed within 15 days for VAT. | The 15-day window is critical for VAT. Act before penalties apply. |
| Approval | Not guaranteed - HMRC assesses viability, compliance history, assets available. | Assets (property) may lead HMRC to suggest commercial borrowing instead of TTP. |
| Breaking down | One missed payment typically terminates entire TTP. Full balance immediately due. | Set instalment amounts conservatively. Call HMRC before missing any payment. |
| Tax types covered | VAT, CT, SA, PAYE, CIS, SDLT, and most HMRC liabilities. Separate helpline per tax type. | Each tax type has its own TTP process and assessment criteria. |
Indicative rates - August 2026. Rates change daily. Actual rate depends on LTV, security, credit profile, loan size, and exit strategy. Contact our team for a live rate comparison for your specific case. All rates sourced from lender product sheets and publicly available market data.
What determines your rate
How to apply - HMRC TTP helplines: VAT: 0300 200 3700. Corporation Tax: 0300 200 3410. Self Assessment: 0300 200 3822. PAYE: 0300 200 3211. All lines Monday-Friday 8am-6pm. Have: tax reference, amount owed, reason unable to pay, specific monthly instalment proposal, bank statements to demonstrate cashflow. The call takes 20-45 minutes.
What HMRC assesses: (1) Is the business genuinely unable to pay (not choosing not to)? (2) Is the business fundamentally viable? (3) Can the proposed instalments be maintained? (4) Prior TTP defaults - previous broken TTPs significantly reduce approval chance. (5) Available assets - HMRC may suggest you borrow against property if significant equity exists.
TTP interest - often underestimated: On £100,000 over 12 months at 7.75% p.a. (reducing balance): approximately £4,200 in total interest. On the same amount via bridging at 0.75%/month for 12 months: approximately £9,500 (rolled). For large bills over longer periods, TTP is materially cheaper than bridging - if approved.
When bridging beats TTP: Bridge is better when: (1) TTP approval is uncertain; (2) Speed is critical (bridge in 7 days vs TTP 5-10 days); (3) Bill is under £100,000 and penalty risk is high (bridging cost vs penalty cost is close); (4) Previous TTP broken - HMRC unlikely to approve again; (5) You want certainty - a bridge pays HMRC in full, immediately.
Worked cost example
- £60,000 CT bill. TTP vs Bridge comparison.
- TTP (6-month plan, if approved): Total interest approximately £1,400. No fees. TOTAL: £1,400.
- Bridge (0.75%/month, 6 months): Interest £2,737. Fee £900. Legal £2,000. TOTAL: £5,637.
- TTP is £4,237 cheaper IF approved. The question: how confident are you TTP will be approved?
- If TTP is refused and bridge is then arranged at day 45 (first penalty already applied):
- HMRC cost by day 45: interest £640 + £1,800 penalty = £2,440. Then bridge: £5,637. Total: £8,077.
- BRIDGE COST: £2,937 interest + £900 fee + £2,000 legal = £5,837 total.
- HMRC INTEREST on £60,000 unpaid for 6 months: £60,000 × 7.75% × (180/365) = £2,292.
- NET SAVING vs HMRC interest alone: Bridge (£5,837) costs £3,545 more than HMRC interest (£2,292).
- NET SAVING vs HMRC interest + enforcement risk: HMRC interest (£2,292) + CCJ costs (£3,000-£5,000) = £5,292-£7,292.
- Bridge (£5,837) costs £545 more than HMRC + minimum enforcement - but eliminates enforcement risk entirely.
- CRITICAL BENEFIT: Bridge closes the undisputed element immediately, demonstrating good faith. The £25,000 disputed appeal proceeds from a position of HMRC compliance - a materially stronger negotiating position.
Rate context and outlook
HMRC TTP approval rates remain high for genuine applications - HMRC prefers structured repayment over formal insolvency. However, the April 2025 interest rate increase (from base rate + 2.5% to base rate + 4%) has made TTP more expensive than previously. The April 2025 VAT penalty reform has made TTP more urgent to arrange (within 15 days) to avoid the first 3% penalty.