If you have received winding up petition from HMRC with the intention to close your business then you need to act quickly and seek advice from us. We have many years of experience in speaking and dealing with HMRC so that we can take preventive measures or help your company to respond or discuss a Time to Pay arrangement.
Can the petition be challenged? So what can I do?
We suggest that you seek legal advice as to whether you have any grounds to defend the winding up petition and act quickly so that you can respond to the proceedings. It is possible that the debt is not due, the debt is disputed, may have a cross-claim or procedure not been adhered to.
Does HMRC have the power to petition for Unpaid VAT from the Company even if there has been no final determination of tax due?
As a creditor, HMRC can petition the court to put a company into liquidation or to make an individual bankrupt to settle tax debts. This is permitted even where an assessment is under appeal and awaiting a tax tribunal hearing, where collection of tax is not postponed.
In Parkwell Investments v Wilson  EWHC 3381 (ChD), HMRC was successful in seeking the liquidation of the company to recover tax debts, despite the fact that the tax in point was still under an appeal at the FTT.
The High Court ruled that it was obliged to consider the likelihood of the success of the appeal. In this case, the company could not prove its appeal had merit, as it failed to produce evidence to substantiate the entries on its VAT returns. With its appeal doomed and not having sufficient assets to pay the VAT debt, the High Court approved the company’s liquidation.
Top tip: When making an appeal, a request should be made to postpone collection of the tax due under TMA 1970 s 55. However, it should be noted that if the case is lost by the taxpayer, the tax may be payable despite an appeal to a higher court (TMA 1970 s 56).