# HMRC Time to Pay: how it works for a business

Source: https://workflowdividend.com/hmrc-time-to-pay.html  
Last reviewed: 2026-10-29  
Author: Sean Key, Applied Clinical Judgement (refers companies to micro1 and may receive referral fees)

A Time to Pay arrangement lets a UK company pay a tax bill it can't meet in full in monthly installments. HMRC will want to know what you've already done to raise money. This guide covers how the arrangement works, and an income source most company owners haven't heard of: licensing the company's workflow data to AI training data companies, which supply the frontier AI labs building models like ChatGPT, Gemini and Claude. For an established company with a temporary cash gap, it can be a substantial sum, but only if you start early enough.

## At a glance

- Time to Pay is HMRC's name for a payment plan. It can cover tax, penalties and interest, and each one is set to the business's finances.

- Smaller VAT and PAYE debts can be set up online. Larger or older debts mean talking to HMRC.

- HMRC asks about your finances, your assets and what you've done to raise funds. It usually expects a business to put around three quarters of its spare monthly income toward the debt.

- Licensing company data can bring in $100k+ or more for a qualifying company, but allow around three months from registering to payment. Ask for a quote before the pressure builds.

## Setting up an arrangement online

HMRC lets a business set up a plan online, without a phone call, when the debt is under a set limit and these conditions are met. The limits change from time to time, so check the current figures on [GOV.UK](https://www.gov.uk/difficulties-paying-hmrc) before you apply.

| Tax | Online if |
| --- | --- |
| VAT | The debt is under HMRC's online limit, you can pay it within 12 months, it's for a period starting in 2023 or later, you have no other HMRC plans or debts and your returns are filed. Not available if you use the Cash Accounting or Annual Accounting schemes, or make payments on account. |
| Employer PAYE | The debt is under HMRC's online limit, you can pay it within 12 months, it's no more than five years old, you have no other HMRC plans or debts and your PAYE and CIS returns are filed. |
| Corporation tax and larger debts | Contact HMRC's Payment Support Service to agree terms. |

Source: GOV.UK, [If you cannot pay your tax bill on time](https://www.gov.uk/difficulties-paying-hmrc), checked October 2026.

## What HMRC asks a business

- How much you owe, and any other HMRC debts or repayments due to you.

- Your current financial position and expected changes.

- **What you've done to raise funds.**

- What you've done to get your tax affairs in order.

- Bank details for a Direct Debit.

HMRC may also ask you to use assets to reduce the debt. If a payment fails, it will contact you to find out why and may renegotiate. It describes its enforcement powers as a last resort.

## Where data licensing fits

Most ways of raising funds mean borrowing, selling something you need or giving up a share of the company. Licensing data is different. An AI training data company such as micro1 pays for a de-identified copy of your everyday work records (email, chat, project and CRM history) and supplies it to frontier AI labs. You keep the company and your own copy of the data. [Why AI companies pay for this](https://workflowdividend.com/why-ai-companies-pay-for-business-data.md) explains what they're buying.

micro1's partnerships start at $100k+ and range up to $100K to $3M+, depending on the data. micro1 creator guidelines (refer.micro1.ai/influencer/guidelines), checked Oct 23, 2026 It looks for companies with 30+ employees, so it isn't an option for a small business.

Once terms are agreed, micro1 says a project takes two to three weeks, and payment follows in around 60 days. micro1 referral partner interview (YouTube), checked Oct 23, 2026 With time to review the proposal and contract, allow around three months from registering to payment. That's why timing matters more than anything else on this page.

## The earlier you ask, the more it can do

1. Before a tax payment is missedThe best time. A quote costs nothing and takes no commitment. If the figure is worthwhile, you can plan around it before HMRC, your bank or your suppliers are involved.

2. When you set up a Time to Pay planStill useful. HMRC asks what you've done to raise funds. A license payment due in a few months could shorten the plan or clear it early. Don't present it to HMRC as certain until it's signed.

3. If you're missing plan paymentsHarder. HMRC may move toward enforcement before a payment three months away arrives.

4. Once the company is insolventThe decision is no longer only yours. Directors must put creditors' interests first, and an insolvency practitioner may end up deciding what happens to the data.

## When license money can keep a company solvent

For some companies, yes, it can make the difference. A business that's fundamentally sound but caught by a late-paying client, a lost contract or a heavy tax bill can be tipped into insolvency by a short cash gap. A one-off payment of $100k+ or more arriving in time can close that gap without new debt or giving away shares. It won't fix a business that loses money every month.

### When it can help

The company is solvent or close to it, the cash problem is temporary, it has 30+ employees and years of records, and you start at least three months before the money is needed.

### When it can't

The business is losing money every month, the gap is needed in weeks, or the company is already insolvent and directors are hoping an unsigned deal will rescue it. Carrying on trading on that hope can make directors personally liable.

If the company is already insolvent, talk to a licensed insolvency practitioner before anything else. The data can still have value as part of a rescue plan, but the practitioner will need to be involved.

## Before you sign anything

### Check you're still solvent

If the company can't pay its debts, directors must put creditors' interests first. A licensed insolvency practitioner can tell you where you stand.

### Read the privacy terms

Staff and customer data needs a lawful basis and de-identification. [Ask the nine questions](https://workflowdividend.com/de-identification.md#questions) first.

### Check it's real

Some people will try to exploit companies under pressure. [My scam check](https://workflowdividend.com/is-it-a-scam.md) covers the warning signs.

This is a general explanation, not tax, legal or financial advice. I'm not an accountant or an adviser. Talk to yours, or to HMRC, about your own position.

## Finding out what your data could earn

Registering costs nothing and doesn't commit you. Asking now keeps the most options open. micro1 reviews the company and the data, then makes a proposal you can take or leave.

[Register with micro1](https://workflowdividend.com/go/micro1?from=time-to-pay)micro1 will ask you to enter your work email to register.

I'm not employed by micro1. If a company signs up through my introduction, micro1 may pay me a referral fee. It costs you nothing and doesn't change your terms.

## More guides

- [Why AI companies pay for business data What they're buying, and why everyday work is valuable](https://workflowdividend.com/why-ai-companies-pay-for-business-data.md)

- [Is it a scam? The evidence the program is real, and six warning signs](https://workflowdividend.com/is-it-a-scam.md)

- [micro1 review What micro1 offers, and the concerns to weigh](https://workflowdividend.com/micro1-data-partnerships-legit.md)

- [What is your data worth? Published figures and what sets the price](https://workflowdividend.com/what-is-my-company-data-worth.md)

- [How names are protected De-identification explained, and what to ask before you sign](https://workflowdividend.com/de-identification.md)

- [If your company has closed Who qualifies, and who can still sign](https://workflowdividend.com/closed-company-data.md)

- [Closing your company? Deal with its data before you strike off or dissolve](https://workflowdividend.com/closing-your-company.md)

- [An intangible asset Valuing or selling a business that holds years of records](https://workflowdividend.com/company-data-intangible-asset.md)

- [Non-dilutive funding How data licensing compares with grants and loans](https://workflowdividend.com/non-dilutive-funding.md)

**About the author**

Sean Key has been a freelance consultant for 22 years, mainly delivering data and digital projects into the NHS. He runs Applied Clinical Judgement, which connects professionals with AI training work, and helps established companies weigh up micro1's Company Data Partnerships program.

He isn't a lawyer and isn't employed by micro1. If your company signs up through his introduction, micro1 may pay him a referral fee at no cost to you.

[Sean Key on LinkedIn](https://www.linkedin.com/in/seandkey/) · [Book a call](https://calendly.com/seandavidkey/the-workflow-dividend)