DMBM800020 - Time To Pay: introduction: what is Time To Pay?
All customers are expected to make payment in full by the due date where they have the means to do so, except cases where there is a statutory right to pay by instalments, see DMBM800030.
Where customers are unable to pay in full by the due date HMRC can use its discretion to allow a customer to pay over a period providing certain principles are followed, see DMBM800040.
Under the Commissioners for Revenue & Customs Act 2005 the Commissioners have the responsibility for the collection and management of the taxes, duties and national insurance for which HMRC is responsible, and it is within this responsibility that HMRC has limited discretion to allow payment after the due date.
Where HMRC agree that payment can be made after the due date this is know as Time To Pay (TTP).
In order for the customer to be allowed TTP they must meet set conditions. These are:
- they must have the means to make the agreed payments
- they must have the means to pay other tax liabilities that become due during the TTP period
- the TTP period must be as short as possible.
Payment promises are distinct from TTP as they are often a one-sided offer of payment from the customer rather than being a negotiated payment plan. An example of a payment promise would be where we phone a customer who is late in making payment and during the phone call they say they can pay in full at the end of the week.
For more information on payment promises see DMBM800025.
Payment in advance
Requests to clear a liability by instalments before the due date are not considered to be TTP. Providing that the customer settles in full by the due and payable date, they can pay whenever and whatever they wish. In Income Tax Self Assessment cases customers can set up Budget Payment Plans with us either over the phone or via the HMRC internet site. For further details see National Direct Debit User Guide.