Published: 15/12/2025 By Martin Armstrong
Recently released figures from HMRC show that total tax debt had risen to £43.8 billion by the end of September 2025. Furthermore, HMRC winding up petitions reached a year high with 423 petitions filed in October 2025.
In the Spring budget the Government pledged an additional £630M to boost HMRC’s ability to recover debt, including recruiting an extra 2,400 debt collection staff.
It appears that HMRC is getting tougher on businesses that are either unwilling or unable to settle their tax debts. It seems likely that HMRC will take an increasingly aggressive approach over the next twelve months.
Our opinion is that HMRC should aim to achieve the right balance between supporting businesses and individuals in genuine financial difficulties through agreeing Time to Pay arrangements, whilst being more assertive with those who choose not to pay when they are able to do so.
If a company does receive a winding-up petition from HMRC or another creditor there is still the opportunity to take action in advance of the winding-up petition being heard in Court. These include, but are not limited to:
- Negotiating payment or settlement (with the creditor withdrawing the petition)
- Requesting an adjournment (if refinancing or restructuring is an option)
- Seeking a validation order (if it is critical the bank account be operable)
- Defending the petition (if there is a genuine dispute)
- Exploring rescue options including informal restructuring, a Company Voluntary Arrangement (CVA) or Administration
- Instructing an Insolvency Practitioner to undertake a Creditors Voluntary Liquidation (CVL) (as a more orderly winding-up than a Court driven process
The key message is for directors to seek early advice once they receive a threat of a winding-up petition, as the earlier advice is taken the more likely it is that the business may be rescued. However, even if a company receives a winding-up petition it is not too late to seek advice and take action to deal with the company’s affairs in an orderly fashion.
The team at TBA are on call and available to assist any businesses faced with this situation.