HMRC Winding-Up Petition

[Eric Goodman]

Hello all

Wonder if the learned members here can help

Today I received a call from a company informing me a petition to wind-up the business has been posted and for a fee of £1,100 could help

This was the first I'd heard of it so was taken aback a little, I checked the link sent via email and HMRC have issued a petition to wind-up the business

As a backstory back in November last year I was locked-out of my business premises by the landlord over a dispute over the elec charges they were recharging all tenants, I was given no-time to retrieve any business goods, IT equipment, customer details, pretty much all the business related items
I was not allowed access whatsoever
I instructed a solicitor who essentially was sent round in circles for months on end and got nowhere
I am still without any business belongings and also any post sent to the business which according to my solicitor is unlawful
I have informed my local MP who has wrote to the landlord but we are yet to get anywhere to this day

Eventually, after much panicing and phone calls to various HMRC departments I eventually got through to the VAT Enforcement department who informed me they'd wrote to the business in late November about the VAT and hadn't had any response, they've since issued Statutory Demands which have obviously gone unanswered due to not having access to post
It is only by the phonecall I received today (and many phone calls since) that I have known that a winding-up petition has been filed at the court

Now, I have never once ignored any official correspondence and certainly wouldn't ignore a Statutory Demand especially from HMRC and leave it unanswered and in this case ignored

I have spoke to a person in the enforcement office and explained the situation above, according to them the only way to resolve it is to pay the whole amount fully
If I had the amount I'd pay it, but I don't
It is only the last couple of months I have managed to salvage parts of the business and start generating income again, which I can happily show
I don't want the company wound-up as it is starting to recover despite the setbacks faced from Covid/Energy Crises and with a little time (and now little overheads due to no office expenses and me being the sole-member of staff essentially) the business can recover

Is it now not worth it will the wind-up petition just put an end to the business? Is it worth me fighting to save it or will the court just close it down?

Anyone here had any experience on this?

Thanks

 

[Socio South West]

You say you have spoken to your solicitor regarding the history to this event - I think that is your best course with this latest turn of events. I would be very wary of handing over £1100 to anyone on the basis of a phone call.

You don't mention the scale of the sums involved in terms of equipment. stock etc you are unable to access so its difficult for the forum to give you a meaningful opinion on whether its worth fighting for.

You have started trading again under the same company banner - At some point you will have to pay HMRC if the company is to survive. Somehow you have to reach agreement with them to get the petition cancelled. Again - all dependent on the scale of the sums involved.

 

[Eric Goodman]

Thanks for the reply

I feel I was messed about by solicitors for over 4 months, all they've done is wrote letters, charged me (and the other side) and we're nowhere different than when we started this except a few grand lighter in the pockets
We tried resolving personally, then went legal, still not resolved
My MP got more of a response from the other side than either me or the solicitor did...

This is on the backburner at the moment though as I don't want the company gone via this winding-up petition

I don't deny or dispute the amounts, I am willing and now able to pay
My main point is that I haven't had any correspondance, if I did I wouldn't of ignored it initially
The only way I found out about this was from a sales-call from someone wanting to challenge it on my behalf, but for the money I'd pay them I'd rather give it towards what is owed to HMRC and speak to them myself and show I can pay, just not the full amount at ther moment

But is it worth it now its gone this far?

 

[Socio South West]

But is it worth it now its gone this far?

Most certainly! this is only the first step in what is quite a long winded process.

Get in touch with whichever branch of HMRC is issuing the petition, and arrange to get the arrears sorted. The petition will not be pursued, and will withdrawn,

The issue of the premises sounds like the route you have taken so far is the only way to go I'm afraid.

 

[Eric Goodman]

Cheers again, appreciate the replies

I remember about ten years ago I had a 'tax advisor' offer to help me out at the time, all he did was speak to HMRC and arrange a payment plan, which I could have done myself, but got charged a few grand for the privilege, so rather than give this company who offered their help yesterday I can speak for myself and give HMRC the money instead

It was only filed yesterday, so hopefully I've got a bit of time, the bank account being frozen would be a massive ballache which I'm hoping to stop today...

 

[AlanJ1]

Appreciate you got put in a bad situation by your landlord but you still had the company, did you not think to phone HMRC about the VAT at all?

Take ownership of this now, don't think about the past stuff effecting you. Pick up the phone to HMRC and find out what you need to do and what you owe and how you can pay it.

Get your address for HMRC changed to your personal address, get the bank changed to your personal address. Get as much as you can away from the property you cannot access.

 

[Eric Goodman]

Yes, agreed, it should have been done earlier and I appreciate that, I never thought it would rumble along as much as it has, I wrongly assumed I'd be allowed some sort of reasonable access to retrieve what I needed, but ultimately wasn't

Again no excuse, but everything I had for the business was in the office, on my computer/servers/stored in filing etc

Absolutely ridiculous situation all round

 

[Lisa Thomas]

I presume this winder is against a limited company.

Why wasn't the statutory demand and other documents relating to this known to you - which address is the company's registered office?

As regards you wanting to carry on trading the business and try to avoid compulsory liquidation, you should take advice from a licensed insolvency practitioner as to whether that's suitable in the company's circumstances. It might be that allowing the company to be liquidated in court is actually the best thing for it.

As regards trying to avoid it, you will need to convince HMRC to withdraw the petition. I suspect the only way to do this is to pay the debt.

Please note that once the petition has been advertised in the London Gazette, even if HMRC withdraw the petition the hearing is likely to remain in place, in case another creditor wants to piggy back on it and continue with the proceedings.

 

[Lisa Thomas]

Most certainly! this is only the first step in what is quite a long winded process.

Get in touch with whichever branch of HMRC is issuing the petition, and arrange to get the arrears sorted. The petition will not be pursued, and will withdrawn,

The issue of the premises sounds like the route you have taken so far is the only way to go I'm afraid.

Not necessarily. Once advertised I believe the court hearing has to continue in case another credior wants to piggy back on top and continue with it.

 

[Lisa Thomas]

Appreciate you got put in a bad situation by your landlord but you still had the company, did you not think to phone HMRC about the VAT at all?

Take ownership of this now, don't think about the past stuff effecting you. Pick up the phone to HMRC and find out what you need to do and what you owe and how you can pay it.

Get your address for HMRC changed to your personal address, get the bank changed to your personal address. Get as much as you can away from the property you cannot access.

I recommend against changing the company's registered office to your home address, unless you want to run the risk of court enforcement officers turning up on your doorstep.

Ideally use a third party serviced address. Company accountants often offer this service.

 

[AlanJ1]

I recommend against changing the company's registered office to your home address, unless you want to run the risk of court enforcement officers turning up on your doorstep.

Ideally use a third party serviced address. Company accountants often offer this service.

Good point.

I was more-so meaning to just get it to somewhere you have access too.

 

[AlanJ1]

Again no excuse, but everything I had for the business was in the office, on my computer/servers/stored in filing etc

Just a note for future.

Back everything up to cloud, you then have a future proof method of gaining access!

 

[Paul Kelly ICHYB]

There are 2 issues here, but I will only comment on the subject matter.

Without sounding too harsh, it is your responsibility to know what is happening in the company and you should have known about the tax requirements - you are responsible for your company and cannot blame external reasons (although they might contribute).

As mentioned, speak to HMRC and sort it out.

 

[14Steve14]

My first thought was to redirect all your post. easy and quick to do. You can also cancel the redirect when the time comes if you ever get access back to the unit.

 

[Michael Loveridge]

Hello all

Wonder if the learned members here can help

Today I received a call from a company informing me a petition to wind-up the business has been posted and for a fee of £1,100 could help

This was the first I'd heard of it so was taken aback a little, I checked the link sent via email and HMRC have issued a petition to wind-up the business

As a backstory back in November last year I was locked-out of my business premises by the landlord over a dispute over the elec charges they were recharging all tenants, I was given no-time to retrieve any business goods, IT equipment, customer details, pretty much all the business related items
I was not allowed access whatsoever
I instructed a solicitor who essentially was sent round in circles for months on end and got nowhere
I am still without any business belongings and also any post sent to the business which according to my solicitor is unlawful
I have informed my local MP who has wrote to the landlord but we are yet to get anywhere to this day

Eventually, after much panicing and phone calls to various HMRC departments I eventually got through to the VAT Enforcement department who informed me they'd wrote to the business in late November about the VAT and hadn't had any response, they've since issued Statutory Demands which have obviously gone unanswered due to not having access to post
It is only by the phonecall I received today (and many phone calls since) that I have known that a winding-up petition has been filed at the court

Now, I have never once ignored any official correspondence and certainly wouldn't ignore a Statutory Demand especially from HMRC and leave it unanswered and in this case ignored

I have spoke to a person in the enforcement office and explained the situation above, according to them the only way to resolve it is to pay the whole amount fully
If I had the amount I'd pay it, but I don't
It is only the last couple of months I have managed to salvage parts of the business and start generating income again, which I can happily show
I don't want the company wound-up as it is starting to recover despite the setbacks faced from Covid/Energy Crises and with a little time (and now little overheads due to no office expenses and me being the sole-member of staff essentially) the business can recover

Is it now not worth it will the wind-up petition just put an end to the business? Is it worth me fighting to save it or will the court just close it down?

Anyone here had any experience on this?

Thanks

There are two separate issues here – the winding up petition and what appears to have been a forfeiture of your lease.

So far as the petition is concerned, bear in mind that creditors don’t generally issue winding up petitions actually wanting the company to go into liquidation, as they won’t get paid if it does. They are used as a debt recovery weapon, and they're extremely effective, as your reaction has demonstrated.

However, it's nearly always possible to negotiate with the creditor for payment over a period of time.

The critical thing you must try to avoid is the petition being advertised, as if it is advertised your bank account will generally be frozen the same day. Again, it’s generally possible to persuade a creditor to withhold advertisement if they can see that there's a good prospect of recovering the debt. Although the petition must be advertised no less than 7 working days before the hearing it's generally possible to agree to adjourn the hearing to a later date, so that advertisement can be avoided.

Do you still actually want to get back into possession of the premises? With regard to the forfeiture of your lease there’s not much information to go on. However, your landlord could only have legally forfeited the lease if the electricity charges were actually being charged as rent in the lease. If they weren’t, then they would have had to serve you with a section 146 notice before forfeiting the lease , and if they didn’t do so the forfeiture would have been invalid.

Even if it was valid there's a procedure known as relief from forfeiture. This involves making an application to the court to reinstate the lease, and such an application will generally be granted if you pay any outstanding rent and the landlord's legal costs. I can only assume that your solicitor has advised you regarding this, but that you couldn't afford to pay the outstanding sums due.

If you are / were able to pay the sums due, and your solicitors haven't advised regarding an application for relief, then it's essential that you act quickly, as there's generally considered to be a 6 month time limit from the date of forfeiture to make an application. And change your solicitors!

So far as your personal property is concerned the landlord owes you a legal duty of care to look after them, and they must provide you with a reasonable opportunity to recover them, though your lease would probably set out the situation in more detail - I assume your solicitor's explained this to you.