Can I refinance with HMRC arrears or while in a Time to Pay arrangement?
Short answer
Yes — refinancing can be possible if your business has HMRC arrears or is on a Time to Pay (TTP) arrangement, but it depends on the lender, the size and terms of the arrears, and how well you can demonstrate sustainable cash flow. Lenders assess HMRC debt as part of affordability and risk checks, so transparency and good documentation are essential. Specialist lenders or brokers are often better placed to find options that mainstream lenders will not consider.
What HMRC arrears and Time to Pay arrangements mean for refinancing
HMRC arrears are unpaid tax liabilities such as PAYE, VAT or corporation tax that can affect business credit risk. A Time to Pay agreement is a formal arrangement with HMRC to repay arrears over an agreed schedule rather than in a single lump sum.
Both are visible to lenders through credit checks and financial statements, and they indicate an existing priority creditor position. Lenders will want to know the repayment schedule and how your business will meet both the HMRC plan and any new finance costs.
How lenders view arrears and TTPs when considering refinance
Mainstream high-street banks are generally cautious if there are active HMRC arrears or a TTP in place, since HMRC ranks highly as a creditor. Many banks will decline refinance or require arrears to be cleared first or secured by additional collateral.
Specialist commercial lenders and brokers often accept applications where businesses have HMRC arrangements, provided there is a credible cashflow plan and the TTP is being adhered to. Lender requirements vary: some ask for HMRC confirmation of the TTP, recent tax filings, or accountant-signed cashflow forecasts.
Practical steps to apply for refinancing with HMRC arrears or a TTP
1. Gather evidence: provide HMRC TTP confirmation, recent tax returns, management accounts and a cashflow forecast covering the TTP term. 2. Be transparent: declare arrears and the TTP to any potential lender or broker up front to avoid later frustration.
3. Explore appropriate products: refinancing for consolidation or restructuring may be available via asset finance, invoice finance, or specialist term loans rather than standard business loans. 4. Use a broker or platform that understands HMRC dynamics to match you to lenders who consider businesses in repayment arrangements.
What happens if refinance is declined and viable alternatives
If a refinance application is refused, consider alternatives such as negotiating an increased Time to Pay with HMRC, arranging short-term bridging finance, or using invoice or asset finance to improve cashflow. Where possible, prioritise maintaining the TTP payments to avoid escalation or enforcement action from HMRC.
A qualified broker can also help restructure existing facilities to lower monthly outgoings or find creditors willing to accept a consolidated arrangement that accommodates HMRC repayments. Legal or professional debt advice may be appropriate for complex or significant arrears.
How Best Business Loans can help and next steps
Best Business Loans does not lend directly, but we introduce businesses to lenders and brokers who specialise in complex credit cases, including HMRC arrears and Time to Pay arrangements. Our AI-matching system will filter lenders and brokers that are actively lending to businesses with tax repayment plans and can suggest refinancing or alternative finance types.
Start with a quick quote so we can check eligibility and provide a Decision in Principle or matching introductions tailored to your circumstances. For refinancing specifically, see our refinance options here: refinance. Submit a Quick Quote to get matched and receive personalised next steps.
Key takeaways
- Refinancing with HMRC arrears or during a TTP is possible but lender-dependent.
- Full transparency, current TTP compliance and clear cashflow forecasts improve your chances.
- Specialist lenders and brokers are more flexible than mainstream banks for these situations.
- Alternatives include invoice finance, asset finance, bridging or negotiating with HMRC.
- Use an introducer like Best Business Loans for a quick eligibility check and matched lender options.
Compliance note: Best Business Loans is an independent introducer and not a lender. We do not provide regulated lending advice. You should take professional debt or accounting advice where appropriate and ensure any financial promotion you act on is clear, fair and not misleading.