Breathing space is a statutory moratorium in England and Wales, created by the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020, that stops most enforcement action, collection contact, interest and charges on a person’s qualifying debts. A standard breathing space lasts 60 days and is available once in any 12 months; a mental health crisis breathing space lasts as long as the crisis treatment plus 30 days, with no limit on how often. Only a debt adviser can start one, and it is not a payment holiday.

Who can get a breathing space?

Regulation 24 sets the eligibility criteria for a standard breathing space. On the date of application the debtor must be an individual who owes a qualifying debt, is domiciled or ordinarily resident in England or Wales, and is not subject to a debt relief order, an interim order or individual voluntary arrangement, or undischarged bankruptcy. They must not already be in a breathing space, and any previous standard breathing space must have ended more than 12 months before.

The adviser must also be satisfied that the debtor cannot, or is unlikely to be able to, repay some or all of their debt as it falls due, and that a breathing space is appropriate. In deciding that, the adviser considers whether the debtor has enough funds or income, whether a debt solution would help, and whether the moratorium is needed to assess or set one up. Only an FCA authorised debt counselling provider, or a local authority giving debt advice to residents, can start a breathing space. Gov.uk says applying is free, although some debt advisers may charge a fee.

Which debts are covered?

Regulation 5 makes any debt or liability a qualifying debt unless it is non eligible. Debts to the Crown are expressly included, so tax arrears such as self assessment income tax can be covered. The main exclusions are:

  • secured debts such as mortgages and hire purchase, although arrears existing at the application date can be included;
  • debts incurred by fraud, court fines and confiscation orders;
  • child maintenance and family court orders, student loans, social fund crisis or budgeting loans, Universal Credit advances and personal injury damages;
  • council tax not yet due, unless the instalments for the year have all fallen due or a reminder notice has been served;
  • non eligible business debt.

That last item is the one accountants most need to know. A sole trader’s business debts can qualify, but a debt that relates solely to the business does not if, at the point of application, the debtor is VAT registered for that business or is a partner in a partnership with anyone else. A partner in a failing firm therefore gets little help here; see partnership insolvency.

Joint debts can be included even if only one person applies: enforcement protections then extend to the other joint debtors, although interest can still be charged to them. A guarantor is not protected and would need their own breathing space.

What must creditors stop doing?

Once notified, a creditor must stop requiring payment of interest, fees, penalties and charges on the debt, stop enforcement and recovery action by itself or its agents, and stop contacting the debtor to ask for payment. The creditors’ guidance lists the enforcement steps covered, including:

  • enforcing a judgment or order, or obtaining a warrant, writ or liability order, without court permission;
  • taking control of goods, enforcing security or starting proceedings, including a bankruptcy petition;
  • applying for a default judgment;
  • serving notice to seek possession of a rented home on the ground of rent arrears due up to the start of the breathing space;
  • new third party deductions from benefits.

Existing bankruptcy proceedings must stop. Other court proceedings can continue up to judgment, but not enforcement. Where a time limit for enforcement or a new claim would expire during the breathing space, it is extended to eight weeks after it ends. Action taken in breach is null and void and the creditor may be liable for the debtor’s costs. Creditors may still accept voluntary payments, and the guidance says starting a breathing space should not, of itself, create a lasting flag on the debtor’s credit file.

How does a standard breathing space run?

It starts on the day after the debtor’s details are entered on the private breathing space register and lasts 60 days (regulation 26). The adviser must carry out a midway review between day 25 and day 35. Throughout, the debtor must keep paying ongoing liabilities, which include the mortgage or rent on their main home, insurance, taxes, duties and national insurance falling due, council tax and utility bills, and must not take on credit over £500.

The adviser can cancel the breathing space for non payment of ongoing liabilities (unless the debtor could not afford them), failure to engage, a debt solution being put in place, or after a successful creditor review. A creditor may ask for a review within 20 days of the start, only on the grounds that the breathing space unfairly prejudices it, the debtor is ineligible, a debt does not qualify, or the debtor has enough funds to pay. If the adviser refuses, the creditor can apply to court within 50 days. A debt found later can be added, though if the adviser learns of it more than 45 days in, they may decide not to.

How is the mental health crisis breathing space different?

It is available to someone receiving mental health crisis treatment: treatment that justifies detention in hospital or removal to a place of safety, or other acute treatment an Approved Mental Health Professional (AMHP) considers equivalent in severity. Only an AMHP can certify this; a GP cannot. The debtor, a carer, a care coordinator, a mental health nurse, a social worker or another representative can approach the adviser, and the debtor does not have to engage with debt advice. A nominated point of contact deals with the adviser instead.

Protections are the same, but there is no midway review and no obligation to keep paying ongoing liabilities. Under regulation 32 it ends 30 days after the treatment ends, or 30 days after an adviser’s request for confirmation goes unanswered; advisers check every 20 to 30 days. There is no limit on how many a person can have, even if they recently had a standard breathing space.

What happens when it ends?

Creditors are notified. They can then add interest and charges from the end date, but cannot backdate those that would have accrued during the breathing space unless a court allows it, and can resume enforcement and proceedings. They cannot do so if the debtor has entered a debt solution such as a debt relief order, bankruptcy or IVA in the meantime.

Illustration only. Priya is a self employed hairdresser who is not VAT registered. She owes £6,000 on a credit card, £2,000 on an overdraft and £4,000 of self assessment tax, and her current car finance payments are up to date. Her adviser starts a standard breathing space. The card, overdraft and tax debt are frozen: no interest, no collection letters, no enforcement. The car finance is secured and continues as normal. She must keep paying rent, energy bills and any new tax that falls due. By day 60 the adviser expects to have an HMRC time to pay arrangement or a formal solution in place. Had she been VAT registered, debts relating solely to her business would have been excluded.

What mistakes are common?

  • Treating it as a payment holiday. Payments are still legally due; only enforcement, interest and charges pause.
  • Creditors keeping a record of frozen interest and adding it afterwards, which is not allowed without court permission.
  • Assuming VAT registered traders or partners can include their business debts.
  • Missing ongoing liabilities such as rent or new tax, which can lead to cancellation.
  • Expecting it to fix the debt. It buys time to choose a solution, nothing more.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.