More UK companies were forced into liquidation in the 12 months to September than at any time over the past four years, business advisory group Moore has revealed.
Some 4,308 businesses were wound up last year following HMRC intervention. This was an increase of 6% on the previous 12-month period when 4,073 companies were forced out of business.
Any creditor of a business can apply to the courts for a winding-up petition if a sum of £750 has been left unpaid for longer than three weeks. A winding-up order allows HMRC to liquidate the company and pay off creditors. HMRC is responsible for most winding-up petitions although other businesses that are owed cash can also file an application.
Lucienne Parry, a partner at Moore (formerly Moore Stephens), said: “Once a winding-up order has been made by the court, there is little that can be done by the business to prevent liquidation, unless you can pay the tax bill. Banks also tend to freeze the company’s bank account during this process, putting a stop to all trading.”
A spokesman for HMRC said: “We only initiate winding-up action as a last resort, where we believe this is the best way to protect both the interests of other taxpayers and creditors.
“Anyone who anticipates payment problems should call us as early as possible as we have an excellent track record for supporting those with genuine problems.”