Recent statistics show that there has been an increase of 13 per cent in the number of winding up petitions filed by HMRC in the last year. HMRC filed 3,484 winding up petitions in 2015, an increase from 3,074 applications the previous year.
The increase is a reflection on the position of HMRC not only taking a more aggressive stance when it comes to recovering unpaid tax but also identifies the financial strains that UK businesses are presently under.
At Bailey Ahmad Business Recovery we are seeing a common trend in SME’s failing to understand the consequences of a winding up petition being presented against them. We are also seeing last minute attempts to negotiate informal time to pay arrangements with HMRC at the 11th hour which are subsequently being rejected.
Once a petition has been issued it is important that SME’s seek immediate advice in order to give themselves the best chance of having a professional advisor, such as licenced Insolvency Practitioners Bailey Ahmad Business Recovery, negotiate either an informal arrangement with HMRC, formulate a proposal for repayment of the debt or consider putting together a formal rescue plan by way of the use of the tools available under the Insolvency Act.
It is not uncommon for directors of SME’s to not fully understand the consequences of a winding up petition or realise the damage having the petition advertised can do, such as the freezing of company bank accounts. Directors should also be aware of the personal implications in the event they choose to ignore such an event which could leave themselves open to potential wrongful trading issues.
At Bailey Ahmad Business Recovery we are here to help. It is key that you spot the warning signs early and seek the right professional advice in the event that you have either a) significant tax debt or b) have a winding up petition served on your business.