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HMRC internal manual

Debt Management and Banking Manual

Time To Pay (TTP): introduction: can the customer pay?

When considering whether to agree a Time to Pay (TTP) arrangement you firstly need to consider if there is a need for TTP or if the customer is just trying to delay paying. In other words is the customer a ‘can’t pay’ or a ‘won’t pay’.

Can’t pay or won’t pay?

Can’t Pay

‘Can’t Pay’ is defined as the customer who wants to make payment, but currently doesn’t have the means to do so. In some instances the situation is actually more complicated than this and a business may have some money available but in order to stay in business they need to pay other costs, for instance wages. In these cases we must carefully consider the impact it would have on the business if they paid us. If they could no longer trade then they can be considered as a can’t pay. Where possible we would be expecting the business to approach their other creditors and be asking them for TTP as well as HMRC.

Some payments such as repaying director’s loan accounts should not be paid in preference to HMRC.

Where the customer clearly shows that they ‘can’t pay’ as opposed to a ‘won’t pay’, our aim is to negotiate a payment arrangement that allows them to clear their debt and helps them to make future payments on time, where this is realistically possible. Where someone can’t pay and their best proposals show that they can’t afford to meet future liabilities then we cannot allow TTP.

Won’t Pay

‘Won’t pay’ is simply defined as the customer who can, but will not, make payment. Where the customer shows that they have the means to pay we won’t agree a TTP arrangement and will look to take enforcement action as soon as possible.

Establishing ‘won’t pay’ and ‘can’t pay’ status

Telephone contact

Telephone is the preferred contact method as we can question the customer to gain information so we can judge if they are a ‘won’t pay’ or a ‘can’t pay’ case. We can also gather further information about the customer to allow us to reasonably assess:

  • the customers viability
  • likelihood of a TTP arrangement succeeding, and
  • suitable enforcement options if TTP is not successful or can’t be agreed.

The telephone will also allow us to deal with requests more efficiently, as we can gather information more quickly and in turn make the decisions to accept or reject more quickly. When we agree a TTP we can also make it clear to the customer what the conditions of the arrangement are and what will happen if they do not stick to the arrangement.

When phone contact is not appropriate

There may be times where using the telephone to discuss TTP arrangements is not appropriate (i.e. where there is a disability). In these cases you will need to consider the individual’s requirements and tailor your approach accordingly see DMBM802050.

Helping you decide if a customer can’t pay or won’t pay

You may be able to establish won’t pay or can’t pay status after briefly speaking to the customer, but on other occasions you may need to have a more in-depth conversation and even review additional documentary evidence such cash-flow forecasts before you can determine the customer’s ability to pay.

The information that you need during TTP requests is detailed in DMBM802100. The amount of information required increases with the level of risk to the Exchequer; and the greater the debt the more information is required. This information will help you establish if the customer is a can’t pay case and will also help you to determine if the customer’s proposals meet the conditions of TTP advised in DMBM800040.