Recent figures have indicated that the number of HMRC winding up petitions have increased. In the 2011/12 period HMRC issued 5,302 winding up petitions as opposed to 3,367 in 2010/11. This demonstrates an increase of 57%.
The figures are further evidence that HMRC intends to develop a much stricter stance against businesses affected by the recession. In recent years HMRC had adopted a more lenient approach but is now seeking to improve its tax takings. Business owners have consequently been advised to be very wary of the new figures.
Stricter measures have also been introduced in relation to the Time to Pay scheme, which was implemented in order to provide assistance to struggling businesses in relation to their tax bills. The 2011 records produced by HMRC demonstrate an increase in the number of Time to Pay applications and a greater number of application rejections.
When a company is placed into liquidation following a winding up order, the appointed liquidator will be entrusted with the task of selling off the assets of that company in order to pay any creditors. HMRC uses the winding up order as a method to reclaim debts against a business that cannot pay its taxes. When a business starts to struggle one of the primary considerations is an attempt to manage its cash flow by reducing payments out. During the recession we had witnessed a far more sympathetic approach but it now transpires that HMRC are adopting a very tough stance indeed against businesses trying to delay their tax payments.
The changes are largely due to the recent governmental pressure upon HMRC to intervene earlier against businesses defaulting on tax bills and we are now likely to see many smaller businesses in highly precarious financial positions as a direct result. The HMRC position on winding up petitions has also had a profound impact in much larger arenas with the recent administrations of Glasgow Rangers and Chester City.
Here at Farleys we have a dedicated commercial litigation team who are able to advise you about issuing a winding up petition, or indeed if you have received a winding up petition on your business.
If you have any issues regarding business debts, including issuing a statutory demand through to starting insolvency proceedings, please do not hesitate to contact us today for a free initial discussion.