Written by: Keith Tully
Reviewed: Thursday 30th March, 2017
The number of winding up petitions being issued by HM Revenue & Customs (HMRC) across the UK increased by around 12 per cent over the course of last year.
That’s according to figures on the subject from Funding Options, which reports that there were 3,906 winding up petitions made by HMRC last year, compared with 3,485 during the previous 12-month period.
HMRC makes its petitions to wind up businesses to relevant court authorities in an effort to retrieve money that the UK’s main tax-gathering body considers to be owed.
The rise in the number of winding up petitions could reflect a growth in cash flow difficulties among small and medium-sized enterprise (SMEs) throughout the country.
Perhaps unsurprisingly, winding up petitions from HMRC are made more frequently around the time of deadlines for businesses to pay up whatever money they owe as corporation or VAT tax.
As well as petitions, the number of winding up orders obtained from the courts by HMRC increased from 1,944 in 2015 to 2,065 last year, according to Funding Options.
Where HMRC is able to obtain a winding up order, the businesses on the receiving end stand to be forced to close and have their assets liquidated in order to pay off whatever debts are owed.
Prior to 2015, efforts were made by government policy makers to encourage HMRC to give struggling businesses support in dealing with their debts through what have been called ‘time-to-pay’ measures.
However, the spirit of those measures is now believed to be rather less prevalent than it was and SMEs around the country are often finding themselves faced with a considerably tougher line of approach from HMRC and its representatives.
“On the ground over the last 12 months we have seen HMRC taking a much more aggressive position,” Julie Palmer, a regional managing partner at the corporate recovery specialists Begbies Traynor, told Accounting Web recently.
“Not just over the issue of winding up petitions but with businesses they see as asset rich HMRC will send in bailiffs or agents to take walking possession of the company assets for them.”
According to Palmer, there is still scope for fruitful negotiations between cash-strapped companies and HMRC once a winding up petition has been made but it is crucial that the business involved can demonstrate it underlying viability.
16th September 2019
There was around a 25 per cent increase in the number of restaurant businesses entering insolvency over the course of the year to June 2019, according to the latest figures on the subject.Read More