Information for Companies:

If your company is unable to pay HMRC or a creditor then it will be better to address the problem with them rather than leave them to discover the truth for themselves.

Notifying them of your inability to pay a debt and keeping them up to date is an important step to take.

If you ignore or do not notify HMRC/a creditor, this will likely lead to them formally requesting payment.  This can be done through 3 formal routes:

1. Apply to Court who will issue you with a County/High Court judgement;
2. Serving your company with a Statutory Demand;
3. Serving your company with a Winding-up Petition.

Any Court judgement, statutory demand or winding-up petition will be served at your company’s registered office address.

The ordinary process for creditors to follow is to initially issue you with a judgement or statutory demand and if it is not dealt with within a certain time frame then a winding-up petition may follow.

However, on occasions, creditors will endeavour to abuse the process and proceed directly to serving a winding-up petition without prior formal notification.

HMRC are more likely to follow these procedures rigorously and will take action if a debt is not dealt with.

If your company has received a Court judgement, statutory demand or winding-up petition, you will need to react quickly otherwise they can have disastrous effects and, ultimately, lead to the formal closure of your company.

Information for individuals/sole traders/partnerships:

A similar formal debt collection process applies for individuals, sole traders and partnerships.

HMRC and creditors have 3 formal routes they can take to request payment of a debt owed by you:

1. Apply to Court who will issue you with a County/High Court judgement;
2. Serve you with a Statutory Demand;
3. Serve you with a Bankruptcy Petition.

The ordinary process is the same and if any judgement or statutory demand is not dealt with within a certain time frame then this can lead to your Bankruptcy.

React now:

BRI are here to help all companies or individuals who have received formal requests for payments of a debt that cannot be paid.  We have a vastly experienced team who have strong contacts within HMRC and have dealt with a number of aggressive creditors.

Dealing with distressed creditors quickly is of great importance in determining a company’s/individuals financial future.