Tax deferral allows you to delay payment without facing immediate penalties, depending on eligibility and HMRC criteria. This may apply to income tax, corporation tax, and VAT. Before choosing to defer, review HMRC guidance or speak with an accountant to confirm whether your business qualifies and what evidence may be required.

Not everyone automatically qualifies for tax deferral. HMRC typically requires that you demonstrate financial difficulty, temporary cash flow issues, or unexpected circumstances affecting your ability to pay. You may need to provide documents such as financial statements, cash flow forecasts, or past tax records to support your request.

“Plan ahead and communicate with HMRC to manage your tax payments stress-free.”

The most common way to defer your tax bill is through HMRC’s Time to Pay arrangement. This allows taxpayers to spread payments over several months through manageable instalments. Applications are typically submitted through your HMRC online account, over the phone, or with support from your accountant.

Before requesting a deferral, it’s essential to review your finances. Evaluate your current cash flow, upcoming expenses, and any outstanding invoices. Create a realistic repayment plan showing how you intend to meet future instalments. Being prepared increases the likelihood of HMRC approving your request.

Maintaining accurate records also helps ensure you provide the correct details when applying. HMRC is more likely to agree to plans from businesses that demonstrate consistent, transparent financial management.

Even when deferring tax payments, it’s important to understand that interest may still accrue. Staying informed about deadlines, maintaining communication with HMRC, and following agreed instalment plans will help you minimise additional costs and avoid unnecessary penalties.