Last updated 22 October 2026. General information only — not legal, tax or financial advice.
Why HMRC may refuse a proposal
HMRC decides each request on its own facts. Common reasons a proposal fails include:
- HMRC thinks the company could pay more, or pay sooner;
- the monthly amount doesn't look affordable alongside future tax;
- the company has missed returns or broken a previous arrangement;
- not enough information was given about income, outgoings and cash flow.
1. Find out exactly what HMRC said
Note the reasons given, any deadline and any amount HMRC said it would accept. If anything is unclear, ask HMRC. Don't ignore further letters or calls.
2. Make sure everything is up to date
Outstanding VAT, PAYE or Corporation Tax returns should be filed. HMRC is unlikely to agree a plan while the company's records are incomplete.
3. Rebuild the proposal around real numbers
A stronger proposal usually explains what caused the shortfall, shows a realistic cash-flow forecast and sets an instalment the company can sustain while paying current tax. It should also explain what has changed since the earlier request, if anything. Making another approach is not a guarantee: HMRC alone decides.
4. Understand what HMRC can do next
If tax remains unpaid and no arrangement is in place, HMRC can take debt-collection action. Depending on the circumstances, this can include more serious steps such as court action or, for limited companies, a winding-up petition. Acting quickly generally keeps more options open.
5. Consider whether the company can recover
If the debts can't realistically be repaid, keep trading only on the basis of proper advice. Directors of a company that is, or may be, insolvent should speak to a Licensed Insolvency Practitioner about the options available. Some routes let a viable business continue. Cooper Murphy is not an insolvency practitioner, but we can introduce you to an independent one, and you are free to choose any practitioner.
How Cooper Murphy can help
We review what went wrong with the first request and help you prepare a clearer, realistic proposal and supporting cash-flow picture. If a proposal isn't realistic, we'll tell you honestly. We cannot guarantee HMRC's acceptance, negotiate on HMRC's behalf or stop enforcement action, and we are not affiliated with HMRC.