Can HMRC Close My Company? | Insolvency Guide UK

Can HMRC close a company?

HMRC cannot simply close a company because a payment is late. It can pursue unpaid tax through collection and enforcement routes and, in serious cases, petition the court to wind the company up. The court—not HMRC—decides whether to make a winding-up order.

Does this sound familiar?

VAT, PAYE or Corporation Tax is overdue
A Time to Pay arrangement has failed or become unaffordable
HMRC correspondence refers to enforcement, a statutory demand or a petition
New tax is becoming due while old arrears remain unpaid

What may be urgent?

Read each communication carefully and record every deadline. A winding-up petition is materially more serious than routine collection activity and can affect banking and trading. If a petition has been threatened or presented, obtain appropriate legal or insolvency advice immediately.

What to do now

Establish the total tax position by type and period
Prepare a realistic short-term cash-flow forecast
Keep current liabilities from becoming obscured by historic arrears
Respond honestly and avoid offering payments the company cannot sustain
Seek qualified advice if solvency or continued trading is uncertain

What to avoid

Do not ignore formal correspondence, assume a phone conversation stops legal action, or pay HMRC automatically without considering other essential obligations and directors' duties.

Information to gather

Collect HMRC statements and letters, management accounts, bank balances, aged debtors and creditors, payroll requirements and any existing payment-plan terms.

Related guidance

For formal advice, check a practitioner through the official GOV.UK service.

General information for directors of companies registered in England and Wales; not legal, tax or insolvency advice.