---
title: "HMRC Winding Up Petition Served on Moda in Pelle (Unpaid Debt)"
url: https://windinguppetitionsolicitors.co.uk/hmrc-winding-up-petition-served-on-moda-in-pelle-unpaid-debt/
date: 2026-06-05
modified: 2026-06-05
author: "Hasanat Akbar"
description: "HMRC has served a winding up petition on well-known British footwear retailer Moda in Pelle, targeting its payroll entity over unpaid debts. This article examines the circumstances, explains what a winding up petition means for directors, and sets out how Lexlaw's specialist insolvency solicitors can help."
categories:
  - "Companies Court Winding Up List"
  - "company Insolvency"
  - "Directors' duties"
  - "Hearing representation"
  - "Insolvency"
  - "Insolvency Act 1986"
  - "Insolvency Litigation"
  - "Uncategorized"
  - "Validation Orders"
  - "Winding up order"
  - "Winding Up Procedure"
  - "Winding-Up Petitions"
tags:
  - "Companies Court"
  - "Compulsory Liquidation"
  - "director duties insolvency"
  - "High Profile Winding-up Petition"
  - "HMRC"
  - "HMRC Winding-Up Petition"
  - "Insolvency"
  - "insolvency solicitors"
  - "PAYE"
  - "Winding Up Order"
  - "Winding Up Petition"
  - "Winding-Up"
image: https://windinguppetitionsolicitors.co.uk/wp-content/uploads/ChatGPT-Image-Jun-4-2026-01_38_09-PM-1024x683.png
word_count: 1724
---

# HMRC Winding Up Petition Served on Moda in Pelle (Unpaid Debt)

The British retail sector continues to face [severe financial headwinds](https://windinguppetitionsolicitors.co.uk/hmrc-files-winding-up-petition-against-hamilton-academical-what-every-company-director-must-know/), with rising costs, subdued consumer spending, and structural market pressures combining to push even established brands to the edge of [insolvency](https://windinguppetitionsolicitors.co.uk/insolvency-terms-defined-winding-up-definition/). The latest casualty to make headlines is Moda in Pelle, a Leeds-founded footwear retailer with over five decades of trading history, which has been served with a [winding up petition](https://lexlaw.co.uk/solicitors-london/2026-guide-uk-winding-up-petition-procedure/) by [HM Revenue and Customs](https://www.gov.uk/government/organisations/hm-revenue-customs) over unpaid debts. The petition follows internal disclosures to staff that the business had engaged external advisers to review its financial position and solvency. For any company that finds itself in [similar circumstances](https://windinguppetitionsolicitors.co.uk/contact-us/), the consequences of a [winding up petition](https://lexlaw.co.uk/solicitors-london/2026-guide-uk-winding-up-petition-procedure/) are immediate and potentially irreversible, and this is why instructing [specialist insolvency lawyers](https://lexlaw.co.uk/our-people/christopher-snell/) at the [earliest possible stage](https://lexlaw.co.uk/contact-us/) is not a luxury but a necessity.

## HMRC Targets Moda in Pelle's Payroll Company

The [winding up petition](https://lexlaw.co.uk/solicitors-london/2026-guide-uk-winding-up-petition-procedure/) was not served on Moda in Pelle's main trading entity but on MIP Employees 1975, the subsidiary within the group's corporate structure responsible for administering the brand's payroll. This distinction matters enormously. When [HMRC](https://lexlaw.co.uk/solicitors-london/case-study-hmrc-security-notices-overturned-duma-rockey-v-hmrc-tribunal-tax-appeal/) targets a payroll entity, it is typically because [PAYE](https://lexlaw.co.uk/solicitors-london/hmrc-time-to-pay-arrangement-guide-2026-how-to-negotiate-a-repayment-plan-for-unpaid-tax/) income tax deductions and National Insurance contributions have been collected from employees but not remitted to the Revenue. In law, these sums are held on trust for the Crown and [HMRC](https://lexlaw.co.uk/solicitors-london/case-study-hmrc-security-notices-overturned-duma-rockey-v-hmrc-tribunal-tax-appeal/) treats their non-payment with particular severity, often bypassing the statutory demand stage and proceeding directly to petition.

The petition followed a period in which the company had already acknowledged financial strain to its workforce, with internal communications confirming that external advisers had been appointed to review solvency. By the time a petition is served, earlier engagement attempts by [HMRC](https://windinguppetitionsolicitors.co.uk/hmrc-winding-up-petition-against-hamilton-accies/) have ordinarily been exhausted. This pattern demonstrates why directors must act at the first sign of tax arrears accumulating rather than waiting for formal enforcement to begin. Proactive engagement with [HMRC through a Time to Pay](https://lexlaw.co.uk/solicitors-london/hmrc-time-to-pay-arrangement-guide-2026-how-to-negotiate-a-repayment-plan-for-unpaid-tax/) arrangement, supported by [expert legal advice](https://lexlaw.co.uk/our-people/christopher-snell/), can in many cases prevent a [petition](https://lexlaw.co.uk/solicitors-london/2026-guide-uk-winding-up-petition-procedure/) from ever being presented.

## History of Financial Difficulty

Moda in Pelle's current difficulties do not arise in isolation. The business has passed through [formal insolvency proceedings](https://windinguppetitionsolicitors.co.uk/step-by-step-guide-for-directors-responding-to-a-hmrc-winding-up-petition/) on multiple previous occasions, surviving each time through pre-pack administration sales that preserved jobs and continued the brand's trading. On the most recent prior occasion, administrators were appointed after the business experienced ongoing losses and cash flow difficulties that worsened over the Christmas trading period. A pattern of repeated administration and rescue raises important questions about the structural viability of the underlying business model and the robustness of the financial governance arrangements put in place following each recovery. For creditors and [directors](https://lexlaw.co.uk/solicitors-london/directors-personal-guarantees-what-happens-when-a-corporate-debtor-defaults/) alike, this history underscores that past rescue does not guarantee future survival, and that each new period of financial difficulty must be addressed with [fresh urgency](https://lexlaw.co.uk/contact-us/) and [proper professional support](https://lexlaw.co.uk/our-people/christopher-snell/).

## A Recent Change of Ownership

In December 2025, a majority stake in Moda in Pelle was acquired by GlobalTech Corporation, a United States-based technology holding company listed on the OTC markets. The transaction was structured not as a cash acquisition but as a share exchange, with the consideration comprising shares and convertible preferred stock in GlobalTech. This means that the acquisition did not inject fresh working capital into the Moda in Pelle business. Incoming shareholders do not extinguish [existing tax liabilities](https://lexlaw.co.uk/practice-areas/taxation-solicitors-london/), and an acquisition structured around equity consideration rather than cash leaves the underlying business dependent on its own trading cash flows to meet its obligations. Where those cash flows are insufficient to service accumulated [HMRC](https://lexlaw.co.uk/solicitors-london/case-study-hmrc-security-notices-overturned-duma-rockey-v-hmrc-tribunal-tax-appeal/) arrears, a petition can follow within months of a transaction closing, as has proved to be the case here. This is a cautionary lesson for any party acquiring a financially pressured [UK trading business](https://windinguppetitionsolicitors.co.uk/hmrc-issues-winding-up-petition-against-hartley-white-limited/) without thoroughly addressing outstanding debts as part of the transaction.

## What Is a Winding Up Petition?

A [winding up petition](https://lexlaw.co.uk/solicitors-london/2026-guide-uk-winding-up-petition-procedure/) is a formal application to the court by a creditor seeking a compulsory liquidation order against an insolvent company under the [Insolvency Act 1986](https://www.legislation.gov.uk/id/ukpga/1986/45). If the court grants the order, the company is placed into [compulsory liquidation](https://lexlaw.co.uk/solicitors-london/guide-impact-of-compulsory-winding-up-order-liquidation-on-directors/), an Official Receiver or licensed insolvency practitioner takes control, trading ceases immediately, and the company's assets are realised and distributed to creditors in statutory order of priority. Critically, any dispositions of company property made after the date the petition was presented are void unless [sanctioned by the court](https://lexlaw.co.uk/solicitors-london/uk-validation-orders-explained-the-2026-guide-to-unfreezing-company-bank-accounts/), meaning that a company continuing to make payments after receiving a petition does so at serious legal risk. This is why obtaining [expert legal advice](https://lexlaw.co.uk/our-people/christopher-snell/) on the day of service is [essential](https://lexlaw.co.uk/contact-us/) and not something that can safely be deferred.

## What Happens After a Petition Is Served?

Once served, the petition is listed for a court hearing typically within weeks. Advertisement of the petition in the [London Gazette](https://m.thegazette.co.uk/insolvency), which ordinarily follows service, triggers immediate and severe practical consequences. Banks will freeze company accounts upon becoming aware of the petition. Suppliers may withdraw credit. Landlords may take steps under their leases. The reputational damage of a public petition can be impossible to reverse. Between service and the hearing, the company may pay the debt in full and seek withdrawal of the petition, dispute the debt and apply to [restrain advertisement](https://windinguppetitionsolicitors.co.uk/hmrc-issues-winding-up-petition-against-hartley-white-limited/), negotiate a [Time to Pay arrangement](https://lexlaw.co.uk/solicitors-london/hmrc-time-to-pay-arrangement-guide-2026-how-to-negotiate-a-repayment-plan-for-unpaid-tax/) with [HMRC](https://windinguppetitionsolicitors.co.uk/hmrc-winding-up-petition-against-hamilton-accies/), or take steps to enter administration, which imposes a statutory moratorium and provides a framework for rescue or orderly wind-down. None of these routes should be pursued without [specialist legal advice](https://lexlaw.co.uk/our-people/christopher-snell/), and the window for [effective action](https://lexlaw.co.uk/contact-us/) narrows with every day that passes.

## Directors Duties in the Shadow of Insolvency

When a company is insolvent or [approaching insolvency](https://lexlaw.co.uk/solicitors-london/2026-guide-uk-winding-up-petition-procedure/), [directors](https://lexlaw.co.uk/solicitors-london/sections-235-and-236-insolvency-act-1986-directors-duties-to-co-operate-with-liquidators/) must have regard to the interests of creditors as a whole under [section 172(3) of the Companies Act 2006](https://www.legislation.gov.uk/ukpga/2006/46/part/10/chapter/2). Directors who continue trading without a reasonable prospect of avoiding liquidation risk [personal liability](https://lexlaw.co.uk/solicitors-london/personal-liability-notices-plns-guide-2026-what-directors-need-to-know/) for wrongful trading under [section 214 of the Insolvency Act 1986](https://www.legislation.gov.uk/ukpga/1986/45/section/214). Those who allow assets to be dissipated or payments made to connected parties may face claims under [sections 238](https://www.legislation.gov.uk/ukpga/1986/45/section/238) and [239](https://www.legislation.gov.uk/ukpga/1986/45/section/239) of the same [Act](https://www.legislation.gov.uk/ukpga/1986/45/section/239). The Official Receiver investigates director conduct thoroughly in every compulsory liquidation, and disqualification proceedings are a common consequence where misconduct is identified. [Instructing specialist solicitors](https://lexlaw.co.uk/our-people/christopher-snell/) early allows directors to take the steps necessary to protect both the company and themselves, and this is why [early legal intervention](https://lexlaw.co.uk/contact-us/) is so critical when the warning signs of insolvency first emerge.

## Instruct Expert London Insolvency Lawyers

[LEXLAW](https://lexlaw.co.uk/) is a specialist litigation and [insolvency law firm](https://windinguppetitionsolicitors.co.uk/hmrc-issues-winding-up-petition-against-hartley-white-limited/) with extensive experience advising directors and companies facing winding up petitions from [HMRC](https://windinguppetitionsolicitors.co.uk/hmrc-winding-up-petition-against-hamilton-accies/) and other creditors. Our team of [solicitors](https://lexlaw.co.uk/our-people/jaron-dosanjh/) and [practising barristers](https://lexlaw.co.uk/our-people/christopher-snell/) acts swiftly and decisively, whether the priority is disputing a petition, [negotiating](https://lexlaw.co.uk/solicitors-london/hmrc-time-to-pay-arrangement-guide-2026-how-to-negotiate-a-repayment-plan-for-unpaid-tax/) with [HMRC](https://lexlaw.co.uk/solicitors-london/case-study-hmrc-security-notices-overturned-duma-rockey-v-hmrc-tribunal-tax-appeal/), seeking the protection of an administration moratorium, or advising directors on their personal exposure. We understand the urgency of these situations and we are equipped to take [immediate action](https://lexlaw.co.uk/contact-us/) from the moment you instruct us.

If your company has received a [winding up petition](https://lexlaw.co.uk/solicitors-london/2026-guide-uk-winding-up-petition-procedure/), or if you are a director concerned that HMRC arrears or creditor pressure may be reaching a critical point, [contact LEXLAW today](https://lexlaw.co.uk/contact-us/) for a confidential consultation. The earlier you act, the wider your options. Do not wait until the petition is advertised or the [hearing date](https://lexlaw.co.uk/contact-us/) is imminent.

### Frequently Asked Questions

What is a winding up petition and what does it mean for my company?
A winding up petition is a formal court application by a creditor seeking to compulsorily liquidate your company on the grounds that it cannot pay its debts. If the court grants the order, an Official Receiver takes control, trading ceases immediately, and assets are distributed to creditors in statutory priority order. It is one of the most serious legal events a company can face and demands immediate expert response.

Can HMRC serve a winding up petition without first issuing a statutory demand?
Yes. Unlike most creditors, HMRC is not always required to serve a statutory demand before petitioning. Where a company has been engaged in ongoing correspondence with the Revenue over unpaid PAYE or National Insurance contributions without reaching a satisfactory arrangement, HMRC may proceed directly to petition. Directors managing tax debt informally should seek legal advice before HMRC escalates to formal proceedings.

What should directors do immediately after receiving a winding up petition?
Instruct specialist insolvency solicitors on the same day. Do not make payments from company accounts without legal advice, as dispositions made after a petition is presented are void unless court-sanctioned. Gather current management accounts, a creditor list, and details of the petitioning debt and provide these to your solicitors immediately. Speed is everything.

Can a winding up petition be stopped or withdrawn?
Yes. If the petitioning debt is paid in full the petition will ordinarily be withdrawn. If the debt is genuinely disputed the company may apply to restrain advertisement and seek dismissal. If the company enters administration before the hearing the petition is stayed by law. Acting before the petition is advertised in the London Gazette is critical, as advertisement triggers consequences that significantly narrow your options.

What is the difference between compulsory liquidation and administration?
Compulsory liquidation ends the company's trading immediately and focuses entirely on asset realisation. Administration is a rescue procedure that imposes an automatic moratorium on all legal proceedings, including winding up petitions, and allows an administrator to pursue a going concern sale or restructuring. For a company with a viable underlying business, administration can preserve significantly more value and more jobs than compulsory liquidation.

What personal liability do directors face when a winding up petition is served?
Directors of a wound-up company may face claims for wrongful trading under section 214 of the Insolvency Act 1986, preferences under section 239, transactions at undervalue under section 238, and misfeasance. The Official Receiver investigates director conduct as a matter of course in every compulsory liquidation. Directors who acted promptly and sought proper advice are better placed to defend such claims than those who delayed.

Can the business still be sold after a winding up petition has been served?
A going concern sale through administration or pre-pack remains possible after a petition is served but the window closes rapidly as the hearing date approaches. Once a winding up order is made the ability to achieve a business rescue sale is severely curtailed. This is one of the most compelling reasons to instruct insolvency solicitors immediately upon receiving a petition rather than waiting to see how events develop.