Problems

Winding Up Petitions

Winding up Petitions wreck your company’s credit rating virtually immediately when the Petition is filed in Court. There are four options for any Director to choose from if the aim is to keep the company trading, remembering that action needs to be taken quickly as company bank accounts are often frozen in the first week of receiving a petition.

• Pay the debt (plus legal costs) with company funds.
• Pay the debt personally
• Borrow the money and pay the debt
• Propose a CVA

HMRC Demands

HMRC demands should be taken very seriously as HMRC have refined and speeded up their debt collection processes. Communication is essential as the problem will not go away but it will escalate if no action is taken. Talk to them and do a deal if that’s possible.

If no progress is made with HMRC then their Enforcement office may issue a winding up petition against your company with a Court hearing date set for four weeks later.

HMRC will normally accept a repayment plan that is spread over three months. You are a good negotiator if you can agree a deal over six months.

VAT Bonds

HMRC will often send letters to companies that are behind on their VAT demanding that the company pay an upfront bond to cover any defaults on future VAT payments. This action can quickly put a company out of business as the VAT Registration can be withdrawn if the request is not complied with. VAT Bonds can also be demanded from associated companies especially if you liquidate a company.

Police Interrogations

It often comes as an incredulous shock to business owners when they receive a pre-booked invitation from the HMRC to attend their local Police Station for an invitation under caution. You really could not make this up – but it is true. Often a winding up petition is the lesser of two evils.

Official Receiver

Many directors regret the decision to allow their company to be wound up in Court. The prospect may have been trivial until the actual interview procedure proved otherwise.