Time To Pay: considering Time To Pay requests: the stepped approach to Time To Pay
The principles of Time To Pay (TTP) are the same for all cases but we tailor our approach based on the risk associated with each TTP request.
There are three basic criteria which are used to determine how risky a TTP request is. These are:
- the amount of money involved
- the timescale requested
- the previous compliance of the customer.
Amount of money outstanding
Essentially the larger the debt the larger the risk it poses to the Exchequer. There are a number of set amounts where we will vary the minimum amount of information that we will collect to consider the request.
The amounts where our approach varies are for:
- debts below £100,000
- debts of £100,000 and over but less than £1,000,000
- debts of £1,000,000 and over.
When considering what information to gather to make an informed decision on a TTP request you should consider the amount that:
- is outstanding (if contact is made after the due date)
- will remain unpaid at the due date (if contact is made before the due date).
You should gather the information as detailed in DMBM802210, DMBM802220 and DMBM802230 in order to inform your decision. If at any point during discussions/negotiations, you discover that the customer can pay in full or that their request is unacceptable, you should look to reject the request at that point rather than continuing to collect additional evidence; see DMBM803520.
The longer the repayment period the larger the risk posed to the Exchequer. All TTP arrangements should be as short as possible. We vary the minimum information that we collect around the following timescales:
- 15 days and over but less than 3 months
- over 3 months and up to 1 year
- over 1 year.
Cases where TTP extends over a year should be exceptional.
The timescale is measured from the latter of the date of request or the due date for payment. When considering how long the customer needs to repay the debt we will also consider how overdue payment is. Where a customer approaches us before the due date for payment we are likely to look at their request more favourably than a customer who has requested TTP after we have contacted them when payment is overdue. Where a debt has been outstanding for some time we must consider why the customer hasn’t approached us earlier and scrutinise their request.
Previous behaviour is often indicative of future behaviour and we need to consider the customers payment history when we consider their TTP request. Where the customer has made previous payments on time they are more likely to be genuine and adhere to any arrangement. Where previous payments have been made late we may need to scrutinise the request in more detail to see how viable the customer is. Where a customer has had previous TTP arrangements and has not stuck to them we are less likely to accept the proposals unless there are very good reasons for doing so.