3 September 2019: In the vast majority of corporate insolvency matters we advise on HMRC are a significant creditor. We are seeing a marked increase in the very early threat from HMRC to either look to levy distraint over company assets or, worse still, issuing a winding-up petition (“WUP”) . HMRC will, generally, before issuing a WUP, advise of their intention and, historically, we have found that it takes at least 4-5 weeks from the threat of a WUP to actually issuing the WUP.
However, we recently have seen this 4-5 week period being shortened in matters we are advising on. In a current matter, the threat of a WUP was received on 12 August and the WUP filed in the High Court on 19 August. The director only became aware when his phone’ was ringing off the hook with insolvency firms and non-regulated firms offering their services (WUP lists are purchased by some and the “ambulance chasing” calls begin – this is not something BRI do).
Once a WUP is issued against a company then an informal time to pay agreement with HMRC is, generally, unachievable. Time becomes pressured and, unless the WUP debt is paid in full, the company could enter compulsory winding up proceedings and the director(s) may be forced to consider one the following insolvency processes which BRI are formally appointed over:
- Company Voluntary Arrangement
- Creditors’ Voluntary Liquidation
Should you have a client or be a company director that owes monies to HMRC then please contact any of BRI’s management team immediately. The earlier advice is sought, the more options available which will hopefully result in the avoidance of a formal insolvency process.