Injunction Win: Abusive HMRC Winding-up Petition Dismissed

In a legal victory today, HM Revenue and Customs (HMRC) was compelled to consent to the dismissal of a winding-up petition involving a debt exceeding £0.5 million. The case sheds light on HMRC’s conduct and underscores the importance of experienced legal representation. Our client company’s funds were frozen by HMRC, preventing tax payment, yet HMRC still thereafter improperly pursued the petition, later conceding and agreeing to pay significant costs. They also misled the company about delaying enforcement action pending an HMRC account freezing order (AFO). The court order recorded HMRC are to refrain from further action on the petition and the Court dismissed the petition – which was an obvious abuse of process. This case underscores the importance of skilled legal representation against aggressive debt recovery tactics. We offer expert legal help for recovering owed money or defending against unjust petitions.

HMRC’s Abusive Conduct

HMRC’s actions during the winding-up petition proceedings have been questionable, as evidenced by their complete concession to the company’s application. Here’s what transpired:

  1. Freezing Company Funds:
    • HMRC froze the company’s funds through an account freezing order, rendering them unable to pay the outstanding tax.
    • Despite this, HMRC proceeded with the winding-up petition, knowing the company’s financial situation.
  2. Refusal to Release Funds:
    • The company repeatedly requested a modification of the freezing order to release funds for tax payment, but HMRC consistently refused.
  3. Misrepresentation:
    • During the account freezing process, HMRC assured the company that enforcement action would be delayed until their investigation concluded.
    • However, HMRC presented a winding-up petition contrary to this promise.
  4. Account Unfreezing:
    • Interestingly, one of the frozen accounts was later unfrozen after HMRC’s investigation concluded.

Injunction to Restrain Advertisement & Petition Dismissal

Our client successfully sought relief from the Insolvency and Companies Court, requesting the following:

  1. Advertisement Restraint:
    • HMRC should be restrained from advertising or taking further steps related to the winding-up petition.
    • The petition should be struck out as an abuse of court process.
  2. Cost Recovery:
    • HMRC should pay the applicant’s legal costs on an indemnity basis.

HMRC’s Consent to Dismissal & to Pay Costs

HMRC accepted the dismissal of the petition due to their conduct. The HMRC Solicitor’s Office agreed to contribute significantly to our client’s costs arising from the petition and the application.

As an aside, HMRC argued that injunctive relief against a government department is not possible, citing the Crown Proceedings Act 1947. However, precedent (JT Development Solutions Limited v Secretary of State for Education [2022] 2 BCLC 135) suggests otherwise.

Owed Money by a Company? Here’s How We Can Help

Are you owed £750 or more by a company that seems unable to pay? We can help you take legal action to recover your money or defend an abusive debt recovery petition. Our solicitors and barristers specialise in winding-up petitions, which allow you to force a company into closure if they can’t meet their debts. Winding-up petitions tend to make companies that can pay but won’t pay suddenly pay up along with your legal costs. We Offer:

  • Expert Advice: We’ll guide you through the process of issuing a winding-up petition and represent you in court. See our Client Reviews.
  • Defence for Companies: If your company faces an improper winding-up petition or needs time to pay, we can advise you on defending it and guide you through the court hearing.
  • Fixed Fees: We often offer fixed fees, meaning you’ll agree on a set cost upfront for our services. We can even do case on a no win no fee basis if necessary.

Experts in HMRC Winding-up Petition Defence

HMRC is the largest issuer of winding up petitions, and the resultant legal and financial difficulties can be overwhelming for businesses. However, our firm has a dedicated tax disputes team that specialises in addressing HMRC-related claims and navigating Time To Pay Arrangements, providing effective support to companies during difficult times.

We firmly believe that a combined approach is key to saving struggling businesses, and our tax dispute team is renowned throughout the country for their exceptional track record in this area. Led by a former HMRC Tax Barrister who also headed the National Tax teams of two of the ‘Big 4’ accountants, our team possesses the expertise and insight required to achieve optimal HMRC tax dispute outcomes for our clients.

If your business is facing HMRC-related challenges or threats of winding up orders, our HMRC Winding-up Petition Defence team is here to help. Contact us today to learn more about our tailored legal solutions and how we can assist in safeguarding your and your company’s interests.

Check Your Insolvency Case ✔

We analyse your winding-up petition prospects. We deliver strategic legal advice at your first meeting. We get optimal legal results. Want a first or second opinion on your case? Click below or call our lawyers in London on ☎ 02071830529


The information on this website is not legal advice; you should always obtain specific advice on the circumstances of your case. Our Winding-up Petition Solicitors & Barristers provide specialist legal advice based on decades of expertise. Click here or call +442071830529 to get in touch. For regulatory reasons we do not take on low value cases nor provide free legal advice, information or guidance and our team cannot answer questions from non-clients.

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