No. There is no statutory right of appeal to HMRC or the tax tribunal against a refusal of Time to Pay, because agreeing to let you pay late is a discretionary decision. GOV.UK says plainly that you cannot appeal but can complain about how you were treated. In practice the routes left are a better evidenced revised proposal, a complaint, and in rare cases judicial review, while any dispute about the tax itself goes through the normal appeal process.

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Why is there no appeal against a refusal?

Appeals to the tax tribunal exist only where legislation creates them, such as appeals against assessments, amendments and penalties. Time to Pay is not one of them. HMRC’s Debt Management and Banking Manual (DMBM800020) explains that it rests on the Commissioners’ responsibility for collecting and managing taxes under the Commissioners for Revenue and Customs Act 2005, which gives HMRC limited discretion to allow payment after the due date. DMBM800030 adds that apart from a few statutory instalment rights, there is no right for any customer to be granted Time to Pay and each case is considered on its merits.

GOV.UK’s guidance on difficulties paying HMRC says you cannot appeal against HMRC’s decision but can make a complaint if you are unhappy with how you were treated. HMRC’s Appeals, Reviews and Tribunals Guidance (ARTG12010) also says that where there is no right of appeal, mainly for discretionary decisions, a person may turn to judicial review, and that objections to HMRC’s use of discretion can also go through the complaints process. A tribunal appeal against a refusal would be outside the tribunal’s jurisdiction and liable to be struck out (see strike out applications at the tax tribunal).

Why do HMRC refuse Time to Pay?

Understanding the criteria is the best way to turn a refusal into an agreement. DMBM803010 lists four conditions, all of which must be met:

  • you cannot pay in full by the due date;
  • you have the means to make the agreed payments;
  • you can pay other liabilities falling due during the arrangement; and
  • the period is as short as possible.

The same page says HMRC look at whether you “can’t pay” or “won’t pay”, what you have done to raise money, your previous compliance, whether returns are outstanding, ongoing viability and assets. It also says HMRC are not a source of working capital. DMBM803070 says HMRC test proposals against what you have told them before and against your returns, question optimistic forecasts, and would not expect a business to buy assets or repay director loans while owing tax. DMBM800040 says arrangements over 12 months are exceptional, interest is always charged, and the tax due is never reduced.

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How is a refusal made?

DMBM803520 says requests that do not meet the conditions will be rejected, generally over the phone, and the caseworker should explain the reasons and the enforcement action HMRC will take if you do not pay in full. HMRC should try to take an interim payment and tell you they will contact you again. Payments you make meanwhile are accepted without prejudice but are not a Time to Pay arrangement.

Who decides depends on the debt. For debts below £750,000 any caseworker can reject. At £750,000 or more, a Higher Officer or Senior Officer must make the decision (DMBM803520). Asking who made the decision, and what reasons were recorded, is a sensible first step.

Can you make a revised proposal?

Yes, and it is usually the quickest fix. Nothing stops you asking again with better evidence or a better offer. GOV.UK says you will need details of income and spending, that HMRC expect savings and assets to be used to reduce the debt, and that HMRC will accept a Standard Financial Statement from an independent debt adviser. It says monthly payments are usually around half of what is left over after essential outgoings. For companies, HMRC may ask directors to put in personal funds, accept lending or extend credit, and expect stock, vehicles or shares to be released first.

A revised proposal should answer the specific reasons for refusal, for example a shorter term, a lump sum down payment, a cash flow forecast, or proof that overdue returns have now been filed. The normal process is covered in HMRC Time to Pay arrangements and, for VAT, VAT Time to Pay arrangements.

When is a complaint the right route?

A complaint suits cases where HMRC handled the request badly: no reasons given, information ignored, wrong figures used, or unreasonable delay. GOV.UK sets out a first tier review, a second tier review by a different person, and then the Adjudicator’s Office, which is free and independent of HMRC. HMRC’s complaints guidance (CHG415) recognises that an objection to a discretionary decision can become a complaint.

A complaint does not stop collection. GOV.UK says you should keep paying tax while it is dealt with, or you may be charged interest or penalties. See HMRC complaints and the Adjudicator.

Is judicial review realistic?

Only in unusual cases, such as a refusal made without considering relevant evidence, a decision that ignores HMRC’s own published approach, or plain unfairness in the process. ARTG12030 says a pre action letter should normally be sent first, and ARTG12040 says the permission application must be made within three months of the decision. The court reviews how the decision was made. It does not agree a payment plan for you. See judicial review of HMRC decisions.

What happens to penalties and interest?

A refusal leaves you exposed to late payment penalties. Under Schedule 56 to the Finance Act 2009, which sets late payment penalties for a range of taxes, paragraph 10 removes penalties falling due between the request and the end of an agreed deferral period, but only where HMRC agree. Paragraph 16(2)(a) says an insufficiency of funds is not a reasonable excuse unless caused by events outside your control. You can still appeal a penalty itself under paragraph 13.

For VAT under Schedule 26 to the Finance Act 2021, paragraph 6 links penalty relief to proposals made within 15 or 30 days of the due date that lead to a Time to Pay agreement. Interest runs either way (DMBM800040). See HMRC late payment interest.

How might this work?

Illustration only. A company owes £60,000 of corporation tax and asks to pay over 18 months. HMRC refuse because it is repaying a loan to its director each month and has a VAT return overdue. There is no appeal. The director files the VAT return, stops the loan repayments, sells a spare van and offers £10,000 down with the balance over 10 months, supported by a 13 month cash flow forecast. HMRC agree. The time spent arguing would have been better spent fixing the reasons for refusal.

What are the common mistakes?

  • Lodging a tribunal appeal against the refusal. The tribunal has no jurisdiction over Time to Pay.
  • Waiting for a complaint to finish. Enforcement and interest continue meanwhile.
  • Resubmitting the same offer. Answer the reasons HMRC gave.
  • Leaving returns outstanding. HMRC need the full picture of what is owed.
  • Mixing up disputes. If you think the tax is wrong, appeal the assessment and apply to postpone. Time to Pay is for tax you accept you owe.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.