HMRC and Creditor Pressure During Insolvency
Information About HMRC and Creditors for Companies
If your company is facing insolvency and is unable to pay HMRC or a creditor then it will be better to address the problem with them rather than leave them to discover the truth for themselves.
Notifying them of your inability to pay a debt and keeping them up to date is an important step to take.
We can assist you in doing so by formulating an achievable and realistic plan to present to creditors. If you find yourself or your business in a position where you cannot pay HMRC or other creditors, contact BRI Business Recovery and Insolvency today.
Action HMRC and Creditors Could Take During Insolvency
If you ignore or do not notify HMRC/a creditor when unable to pay and therefore facing insolvency, this will likely lead to them formally requesting payment. This can be done through 3 formal routes:
- Apply to Court who will issue you with a County/High Court judgement;
- Serving your company with a Statutory Demand;
- Serving your company with a Winding-up Petition.
Any Court judgement, statutory demand or winding-up petition will be served at your company’s registered office address.
The ordinary process for creditors to follow is to initially issue you with a judgement or statutory demand and if it is not dealt with within a certain time frame then a winding-up petition may follow.
However, on occasions, creditors may endeavour to abuse the process and proceed directly to serving a winding-up petition without prior formal notification.
HMRC Debt Collecting
HMRC are more likely to follow the legal procedures rigorously and will take action if a debt is not dealt with. They could implement debt collection action.
HMRC also have the power to levy distraint over goods. This means they can simply turn up at your premises, carry out an inventory of assets on site and prevent you from selling or disposing of them. You will then have a short period of time in which to pay the debt otherwise they will return, uplift the assets and sell them at auction. These assets are often critical to a company’s ability to trade such as plant and machinery or computer equipment, and without these the business simply stops.
If your company has received a Court judgement, statutory demand, winding-up petition or distraint, you will need to react quickly otherwise they can have disastrous effects and, ultimately, lead to the formal closure of your company.
The best thing to do in this situation is to get some professional business recovery and insolvency advice. Contact our team of specialists to discuss your case. The initial consultation is free of charge and without obligation.
Information on HMRC and Creditor Pressure for Individuals/Sole Traders/Partnerships
During personal, sole trader or partnership insolvency, a similar formal debt collection process applies.
HMRC and creditors have 3 formal routes they can take to request payment of a debt owed by you:
- Apply to Court who will issue you with a County/High Court judgement;
- Serve you with a Statutory Demand;
- Serve you with a Bankruptcy Petition.
If any judgement or statutory demand is not dealt with within a certain time frame then this can lead to your personal Bankruptcy.
If you need help and advice when it comes to HMRC debt collection or threats of winding up petitions then please contact us straight away.
React Now to HMRC and Creditors if you are Facing Insolvency
BRI Business Recovery and Insolvency are here to help all companies or individuals who have received formal requests for payments of a debt that cannot be paid. We have a vastly experienced team who have strong contacts within HMRC and have dealt with a number of other aggressive creditors.
Dealing with HMRC and other distressed creditors quickly is of great importance in determining a company’s/individual’s financial future.
Therefore, please do contact us if you would like further information and assistance regarding any aspect of your business’ debt. There is no charge for doing so and it is without obligation.