[UK] HMRC’s Time to Pay scheme reaches £7 billion

In the UK, the value of PAYE tax debt being deferred through HMRC’s Time to Pay scheme has increased by almost 70 per cent in two years, despite the number of employers using the service remaining broadly stable, The HR Director reports.

The new Freedom of Information (FOI) data was released following a request from the payroll software provider Payfit.

Businesses can reportedly spread tax debts over an agreed period with HMRC via Time to Pay arrangements. They are intended to support businesses that cannot pay payroll tax liabilities by the deadline, but can meet a repayment schedule.

The data reveals that HMRC agreed 221,207 new Time to Pay arrangements, covering £7.136 billion of PAYE debt, during the 2025/26 financial year. There were 217,925 arrangements covering £4.259 billion in 2023/24.

The number of new arrangements barely increased, rising by just 1.5 per cent over the period, but the average value of each arrangement rose from £19,543 to £32,260; an increase of just over 65 per cent, or more than £12,700 per arrangement.

The figures reportedly demonstrate that employers turning to Time to Pay are shouldering significantly larger PAYE debts than two years ago, suggesting growing cashflow pressures instead of a steep increase in the number of businesses requiring support.

Firmin Zocchetto - CEO and co-founder of PayFit - said, “Time to Pay has always been an important safety net for businesses facing temporary financial pressure. But what these new figures suggest is that the challenge is becoming less about the number of employers needing support and more about the size of the liabilities they’re carrying when they reach that point.

"One obvious factor behind this is the fact that payroll has become so complex, with employers balancing PAYE, National Insurance, real-time reporting requirements, and evolving regulations alongside wider economic pressures. When businesses lack the in-house capacity or tools to stay ahead of those obligations confidently, tax liabilities can build much faster than expected.”

Mr Firmin added, “To help employers avoid debts escalating to the point where emergency payment arrangements become necessary, my advice is to consider practical steps such as reviewing PAYE and National Insurance liabilities ahead of payment deadlines, reconciling payroll data with finance forecasts, ensuring Real Time Information (RTI) submissions align with HMRC payment records, and engaging with HMRC as early as possible if a payment may be missed. If liabilities are becoming difficult to manage, however, it may be time to seek professional payroll or tax support and consider whether current payroll systems and expertise are sufficient.”

Source: The HR Director

(Quotes via original reporting)

In the UK, the value of PAYE tax debt being deferred through HMRC’s Time to Pay scheme has increased by almost 70 per cent in two years, despite the number of employers using the service remaining broadly stable, The HR Director reports.

The new Freedom of Information (FOI) data was released following a request from the payroll software provider Payfit.

Businesses can reportedly spread tax debts over an agreed period with HMRC via Time to Pay arrangements. They are intended to support businesses that cannot pay payroll tax liabilities by the deadline, but can meet a repayment schedule.

The data reveals that HMRC agreed 221,207 new Time to Pay arrangements, covering £7.136 billion of PAYE debt, during the 2025/26 financial year. There were 217,925 arrangements covering £4.259 billion in 2023/24.

The number of new arrangements barely increased, rising by just 1.5 per cent over the period, but the average value of each arrangement rose from £19,543 to £32,260; an increase of just over 65 per cent, or more than £12,700 per arrangement.

The figures reportedly demonstrate that employers turning to Time to Pay are shouldering significantly larger PAYE debts than two years ago, suggesting growing cashflow pressures instead of a steep increase in the number of businesses requiring support.

Firmin Zocchetto - CEO and co-founder of PayFit - said, “Time to Pay has always been an important safety net for businesses facing temporary financial pressure. But what these new figures suggest is that the challenge is becoming less about the number of employers needing support and more about the size of the liabilities they’re carrying when they reach that point.

"One obvious factor behind this is the fact that payroll has become so complex, with employers balancing PAYE, National Insurance, real-time reporting requirements, and evolving regulations alongside wider economic pressures. When businesses lack the in-house capacity or tools to stay ahead of those obligations confidently, tax liabilities can build much faster than expected.”

Mr Firmin added, “To help employers avoid debts escalating to the point where emergency payment arrangements become necessary, my advice is to consider practical steps such as reviewing PAYE and National Insurance liabilities ahead of payment deadlines, reconciling payroll data with finance forecasts, ensuring Real Time Information (RTI) submissions align with HMRC payment records, and engaging with HMRC as early as possible if a payment may be missed. If liabilities are becoming difficult to manage, however, it may be time to seek professional payroll or tax support and consider whether current payroll systems and expertise are sufficient.”

Source: The HR Director

(Quotes via original reporting)