Employer PAYE debts deferred through HMRC’s Time to Pay scheme reach £7bn

The value of PAYE tax debt being deferred through HMRC’s Time to Pay scheme has increased by almost 70% in two years, even as the number of employers using the service has remained broadly stable, according to new Freedom of Information (FOI) data* obtained by payroll and HR service provider PayFit.

Time to Pay arrangements allow businesses to spread tax debts over an agreed period with HMRC. They’re intended to support businesses who cannot pay payroll tax liabilities by the deadline, but can meet a repayment schedule.

HMRC agreed 221,207 new Time to Pay arrangements covering £7.136 billion of PAYE debt during the 2025/26 financial year. That compares with 217,925 arrangements covering £4.259 billion in 2023/24.

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

The figures show that employers turning to Time to Pay are carrying significantly larger PAYE debts than they were two years ago, pointing to growing cashflow pressures rather than a sharp increase in the number of businesses requiring support.

Firmin Zocchetto, CEO and co-founder of PayFit, comments: “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.”

Advocating for stronger payroll support and processes, Firmin adds: “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.”