Receiving a 7-day warning letter from HMRC, or any other creditor, is one of the most significant threats a limited company can face, and it should be taken with the utmost seriousness. This letter indicates that HMRC has run out of patience and are now escalating your debt towards forcing your company into liquidation if you do not pay them.

Have you Received a 7 Day Warning Letter from HMRC?

If you’ve received a 7-day warning letter, we suggest you pay off your debt, if that’s an option available to you. If you do not have the resources to pay your creditor, we recommend you make contact with us as soon as possible via calling 0800 074 6757 or live chat and we can explain some of the options available to you.

>>Read our full article on What are the Warning Signs of an Insolvent Company?

What is a Threat of Warning of Winding up Action by HMRC?

The HMRC 7 Day Warning letter will lay out the debt you owe, stating that if it’s not paid in full within 7 days HMRC will instruct their solicitor to present you with a Winding up Petition. The letter will be accompanied by a statement of liabilities.

What’s the Intent of the 7 Day Warning Letter?

HMRC has a very precise system of debt escalation, with each level raising the pressure. These letters have a single intention which is to get you to pay, so no matter how stressful they may feel, ignoring them is only going to ensure that the next letter they send is more forceful still. This 7 day warning letter tells you your time is running out, and that your company is about to be forced into liquidation.

What follows the 7 Day Warning Letter?

Once the seven days are up, you will receive a Winding up Petition notice, announcing a court hearing in a further 7 days. Publicly advertised in the Gazette, a Winding up Petition causes banks to freeze corporate accounts, meaning your company will not be able to keep on trading.

At the court hearing, a judge will rule upon whether the petitioner has a case and, if he concludes in their favour, sign a Winding up Order which will force your company into compulsory liquidation. After that point, the company will cease to exist as a legal entity and be struck off the register at Companies House.

What Are Your Options if You Can’t Pay?