In the past few years, HM Revenue and Customs has changed its tack when dealing with companies that are experiencing financial difficulties and are unable to pay their tax.
Winding up a company is now seen as a last resort by HMRC. To increase the amount of tax collected, HMRC is giving companies that are genuinely trying to meet their tax obligations every possible chance to pay.
That said, HMRC has slightly different motivations, rules and powers than normal creditors, which this article will clarify. They are responsible for the majority of winding up petitions in the UK and are, in many ways, the most unflinching in their methods
Not Merely for Threats
As opposed to certain creditors, a winding up order is not used by HMRC as a method of debt recovery. The aim of the petition is to force your company into liquidation so any assets can be sold to repay the debt. HMRC will pursue this route if it believes it is the only way to recoup the money it is owed.
If you have received a petition from HMRC please contact us for confidential advice.