What Happens After HMRC Rejects a Time to Pay Arrangement?

When HMRC rejects a Time to Pay arrangement, the outstanding tax debt remains due and recovery action may continue. The company could face further payment demands, interest, penalties and, in more serious cases, enforcement or winding-up action. Directors should review why the proposal was refused and assess whether the business can realistically meet both existing arrears and future tax liabilities. A revised repayment proposal may sometimes be possible, but only where it is affordable and sustainable. If the company cannot meet its debts as they fall due, directors should consider whether restructuring, refinancing or a formal insolvency process is necessary.

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