0800 9700539
Show Menu

I have received a 7 day warning letter from HMRC threatening a winding up petition. What now?"

What is HMRC likely to do now? They have a number of aggressive debt collection tools available:

HMRC Letter Click to View

  • Issue a County Court Summons to get a County Court Judgment (see below)

  • Send in a Revenue officer from their Field Force or send a Bailiff after a warning of distraint (see below)

  • Issue a winding up petition following the letter

    Please click on the link about the HMRC 7 day warning letter

Want to avoid all of this? There is a great solution for your company's problem called CVA or Company Voluntary Arrangement.

A CVA is simply a deal between the insolvent company and its creditors; this deal places a legal ringfence, called a moratorium, around the company and stops creditors attacking the company.

It allows a viable but struggling company to repay some, or all, of its historic debts out of future profits, over a period of time to be agreed.

Directors stay in control of the company with KSA providing support. It can stop legal actions like HMRC actions or winding up petitions, if you use a quality, experienced advisor.

Further useful guides to CVA:

"Complete Expert's Guide" to the Company voluntary arrangement. Click for Keith Steven's unique, hugely detailed and comprehensive guide. All of Company Rescue's CVA guides and more in one 90 page PDF.

Company Voluntary Arrangement Detailed Guide - all you need to know about CVAs from framing the deal through to creditors' votes at the creditors meeting unique to KSA Group.

So what can HMRC do to collect its tax arrears?

What is a County Court Summons?

Meaning - A creditor has tried to recover their debt from your company but without success. You may have offered an informal deal but now their patience is wearing thin.

Your company may have tried to stave payment off claiming the debt is invalid or issued a counterclaim. They have issued an action to commence recovering their money in the County Court

What can I do, what should I do? - You have time to pay the claim of the creditor. Try to offer a payment deal sensibly before the action will be heard in the court. Try to do a deal or pay the debt. If you cannot pay it look at Insolvent? page. If you cannot pay it the company could be insolvent.

You can dispute the claim if it can be proven the debt is not correct. Look, carefully, at the forms for detailed instructions on how to defend the claim.

What is a County Court Judgment?

Meaning - Having pressed for payment the creditor has now got the court to agree that there is a valid claim for the money. You have 30 days from the date of the Judgment to pay in full plus any costs incurred. Otherwise the Judgment will be registered at the courts and with credit reference agencies.

Remember an outstanding Judgment is proof of a company's insolvency and allows a creditors to wind the company up. See Insolvent? for further details. There were over 220,000 CCJs issued against businesses in 2013 in the UK, so they are quite a common tool to tackle late payment offenders.

What can I do, what should I do? - If possible always try to pay the debt within 30 days of Judgment. This will ensure that the Judgment is "set aside" and will not be registered with credit reference agencies. If you cannot pay it then this of course further proves insolvency. If it is registered then getting credit in future becomes much more difficult.

If you are under real cashflow pressure but are attempting to trade out call the creditor/ their solicitor or the bailiff and try to agree a phased payment. Often they will agree but they may use the non-payment to push for further action such as distraint or winding up.

You may be surprised at how long a time you can spread payment through this type of deal. Think about it, the creditor just wants paid, even at £50 per week this is better than liquidation - because they will, inevitably, lose the whole amount in liquidation.

Bailiff Action or Warrant

Meaning - As the creditor has not been paid under the judgment the creditor can apply to the court for a warrant of execution.

A notice of warrant will be issued to the debtor. If payment is not made a bailiff of the court can be sent to collect payment or seize goods.

What can I do, what should I do? - As always a deal can be struck with the creditor and or the bailiff to repay over time. Your have demonstrated an inability to pay the debt and are offering to settle in a period to be agreed. For small debts this is often acceptable to the creditor.

Want us to help with a bailiff? Call now and we can provide tools that can assist you.


Revenue Officer.

HMRC can send a member of their Crown Field Force to collect payment, they do NOT need a Warrant. They can distrain against goods

What is Distraint?

Meaning - A popular tool for landlords (or the Crown) where rent or other payments are not made.

A tax officer will give you 5 days to PAY or COMPOUND (do a deal). If you can pay then do so, if you cannot CALL US NOW on 0800 9700539 for expert advice.  See our page on distraint for more information

What can I do, what should I do? - If you cannot pay the debt, you need to point out that the goods belong to the bank or other secured creditor. You should really take professional turnaround or insolvency advice. The company is plainly insolvent and you could be breaking the law by continuing to trade. It is possible for a turnaround practitioner to help in these circumstances - BUT you have left it very late.

Proposing a CVA or entering administration is a solution. CALL NOW FOR HELP 0800 9700539

What is a Winding Up Petition?

Meaning - The most serious action that can be taken against the company. Clearly the company has breached any trust the creditor had, deals have failed, cheques bounced and generally the directors have not kept their word.

See the Winding up page for more details.

Want DIRECT, BESPOKE advice for your business? Call us on 01289 309431 or 020 7877 0050

The browser you are using is Explorer 8 and this site is not compatible with this version. Please upgrade or switch, which is free, for a more secure and better browsing experience.Close