How to Close a Company with HMRC Debts in the United Kingdom
Struggling with company debt can be challenging; many directors find that the turning point into official insolvency is being unable to pay HMRC their tax obligations. In these situations, the company enters an insolvency procedure. Which procedure depends on whether HMRC applies via the courts for compulsory liquidation or the company’s directors opt for a Creditors’ Voluntary Liquidation. However, closing a company with HMRC debts must be done according to the current insolvency laws because any problems and directors could be held personally responsible for the debts. On top of this, HMRC has the power to pursue its debt long after the company has been closed. So, how do you close a company with HMRC debts without attracting other problems later on? What are HMRC debts? Currently, HMRC is owed a staggering total £33 million in tax debt at the close of March 2022. For most companies, their tax debt is made of arrears for VAT, National Insurance (NI) payments or income tax (PAYE). Pa...