Employer PAYE tax debts deferred through HMRC scheme rise to £7.1bn, FOI finds

The value of employer PAYE debt deferred through HMRC’s Time to Pay scheme increased by almost 70% over two years, despite little change in the number of businesses using the service, according to Freedom of Information (FOI) data obtained by payroll and HR provider PayFit.

The data showed HMRC agreed 221,207 new Time to Pay arrangements covering £7.136bn of PAYE debt during the 2025/26 financial year, compared with 217,925 arrangements worth £4.259bn in 2023/24.

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

PayFit said the figures suggest employers are accumulating larger PAYE liabilities before seeking support, pointing to growing cashflow pressures rather than a significant increase in the number of businesses requiring assistance.

Time to Pay arrangements allow businesses unable to meet payroll tax deadlines to spread repayments over an agreed period with HMRC.

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