Taxman revives his use of winding-up petitions
The taxman has revived his issuing of winding-up petitions against businesses with unpaid tax debts, bringing a five-year low in his use of such a recovery method to an end.
In fact, figures obtained by commercial financer LDF show that 4,147 winding-up petitions were issued in the past year, up 10% on the previous 12 months, The Times reported.
Regarded as one of the most powerful tools at the tax authority’s disposal, such petitions can force a business to be sold and see its assets liquidated, so the owed tax can be recovered.
Although all firms are within scope, it is the UK's “many smaller” businesses that LDF is concerned could be hit by the taxman’s “increasingly aggressive” use of the petitions.
Speaking to ICAEW magazine economia, the financer added: “[HM Revenue & Customs] is now prepared to go to much greater lengths than previously in order to recover unpaid tax.”
But HMRC reportedly branded this claim as “misleading”, saying winding-up action is only ever taken where it is the best way to protect the Exchequer in respect of a particular debt.