Step by Step Guide for Directors Responding to a (HMRC) Winding-up Petition

When a company receives a winding-up petition, it is crucial for the directors to act swiftly and take appropriate steps to protect the company’s interests.

In this step-by-step guide, we will provide valuable advice and guidance for directors facing a winding-up petition, particularly those issued by HMRC (who issue more winding-up petitions than any other organisation in the UK).

By following these steps, in conjunction with expert professional legal advice on the petition (which we offer at a fixed fee), directors can effectively respond to the petition and navigate through this challenging situation.


Seek professional legal advice:

When responding to a winding-up petition, it is crucial to consult with a qualified professional solicitor. We provide guidance tailored to your company’s specific situation and help directors make informed decisions. If needed, we can guide you to trusted insolvency practitioners or other professionals. This guide only provides general information and cannot be relied upon as legal advice. Insolvency laws and rules vary, as do the facts of every case, so you must seek professional advice specific to your company’s circumstances.

We analyse your winding-up petition prospects and deliver strategic legal advice at your first meeting. We get optimal legal results. Want our opinion on your case? Call us on ☎ 02071830529 or use our contact form.

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1. Understand the Nature of a Winding-Up Petition

A winding-up petition is a collective legal action commenced by a creditor against a company that owes them an unliquidated debt of more than £750. It is typically filed with the court and, if approved, can lead to the appointment of an insolvency practitioner to compulsorily liquidate the company’s assets and distribute the proceeds among all the creditors to repay the company’s debts. Do not think of it like a normal high court or county court claim.

2. Maintain Open Communication with Creditors

It could be sensible to inform all creditors if your company is experiencing cash flow issues. By proactively communicating your company’s financial circumstances, you may be able to negotiate new payment terms or repayment plans with creditors, potentially reducing the risk of them taking legal action against your company.

3. Responding to a Statutory Demand or WUP Threat

Before a winding-up petition can be issued, creditors will normally serve a statutory demand (or a letter warning of a winding-up petition) requesting payment of the debt. If your company receives a statutory demand or a threat of winding-up, it is important to act promptly.

Within 21 days of receiving the demand, the company must either pay the outstanding balance, negotiate payment terms, take insolvency action, or apply for an injunction. Therefore taking urgent legal advice from experienced winding-up petition defence solicitors and barristers is imperative.

If a creditor applies undue pressure by threatening to present or advertise a winding-up petition or serves the petition without serving a statutory demand first, seek immediate legal advice. It may be necessary to apply for a court injunction to prevent the creditors from taking further legal action. Your could apply for restraining injunction against a winding-up petition or advertisement or even to restrain presentation of a petition to the court in the first place.

5. Options for Defending a Winding-Up Petition

When faced with a winding-up petition, directors have several options to consider:

A. Pay the Debt in Full

Making full payment to the creditor(s) may reduce the risk that the winding-up petition is advertised but that is not guaranteed. Also, additional costs related to bringing the petition to court may also be payable. You should immediately get urgent advice and appoint experienced winding-up solicitors to manage the negotiations.

B. Dispute the Debt

If there is a genuine disagreement regarding the debt owed, the outstanding amount, or the right to set off the debt, the company can defend the winding-up petition by informing the court and providing sufficient evidence. Seeking legal advice and notifying the petitioning creditor of the dispute is crucial. Applying for an injunction to postpone or remove the advertisement of the petition may also be necessary. Often an expert solicitor can force the other side to reconsider – have a look at some our past case studies.

C. Agree to a Company Voluntary Arrangement (CVA)

Entering into a CVA with the creditor(s) can prevent the winding-up petition from proceeding. A CVA is a legally binding agreement that outlines repayment terms over an agreed period. If we review your case in an initial advice conference, and it is appropriate, then we can refer you to a trustworthy leading provider of CVAs.

D. Negotiate with Creditors

Engage in negotiations with the creditor(s) to persuade them not to advertise the winding-up petition. Demonstrating the company’s capability to repay its debts and discussing repayment options may lead to a mutually beneficial agreement.

E. Consider Administration or Voluntary Liquidation

If the company is facing financial difficulties, entering into administration may help rescue the business. Voluntary liquidation can also be an option to address the effects of a winding-up petition.

F. Request an Adjournment

To prevent the winding-up petition from becoming a winding-up order, a company can request an adjournment or cancellation of the hearing. This can provide additional time to explore alternative solutions. We are experts in obtaining adjournments and have several methods in order to secure adjournments.

Process of Defending a Winding-Up Petition

To oppose a winding-up petition, a company must file an affidavit in court at least 7 days before the hearing. The affidavit should also be sent to the petitioning creditor. Directors can attend the hearing to oppose the petition and ought to engage specialist solicitors and counsel for representation. If consideration of evidence is required, the hearing may be adjourned for a Registrar to hear the case.

If a Winding-up Order is made

If the court grants a winding-up order, it signifies a serious stage in the insolvency process. The company will be placed into compulsory liquidation, and an official receiver or insolvency practitioner will be appointed as the liquidator. Here’s what you should do:

A. Cooperate with the liquidator

Provide the liquidator with all the necessary information and documentation they request. Cooperate fully throughout the liquidation process.

B. Cease trading

Once the winding-up order is issued, the company should stop all trading activities. The liquidator will take control of the company’s assets and handle the distribution of funds to creditors.

C. Notify employees and stakeholders

Inform employees, suppliers, customers, and other relevant parties about the company’s liquidation. Comply with legal obligations regarding redundancy consultations and employee rights.

D. Assess personal liability

Directors should seek legal advice to understand their personal liability and potential disqualification from acting as directors in the future.

E. Attend the liquidation interview

The official receiver or appointed liquidator will conduct an interview with the directors to gather information about the company’s affairs. Provide accurate and complete information during this interview.

F. Observe the liquidator’s actions

The liquidator will investigate the company’s affairs, including any potential director misconduct or fraudulent activity. Cooperate with their inquiries and provide any requested information.

G. Focus on director disqualification proceedings

If there are concerns regarding director misconduct or breaches of fiduciary duties, the liquidator may initiate director disqualification proceedings. Seek legal advice to navigate this process and protect your interests.

H. Explore the possibility of a phoenix company

In some cases, it may be possible to establish a new company to continue the business operations, known as a phoenix company. However, be cautious about potential legal implications and seek professional advice.

Seek professional advice

Throughout the process of responding to a winding-up petition, it is crucial to consult with a qualified professional solicitor who can if appropriate guide you to trusted insolvency practitioners or other professionals for assistance. We can provide guidance tailored to your specific situation and help you make informed decisions.

This guide provides general information and should not be considered as legal advice. The insolvency laws and procedures can vary, so it’s essential to seek professional advice specific to your jurisdiction and circumstances.


Dealing with a winding-up petition can be a daunting experience for company directors. However, by acting promptly, seeking professional advice, and exploring various defence strategies, you can mitigate the potential consequences and work towards the best possible outcome for all stakeholders involved. Remember, each case is unique, so it is crucial to consult with professionals who can provide personalised guidance based on your specific circumstances.

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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