HMRC moved to close down 4,761 businesses over unpaid tax in the year to 31 March 2025. The equivalent figure a year earlier was 3,625, making this a 31% jump.
National accountancy group UHY Hacker Young links the increase to a harder line from the tax authority as it chases billions still sitting on its books.
The scale of the problem explains the urgency. National Audit Office figures put tax debt in arrears at £42.8 billion as at 31 March 2025. HMRC has picked up extra resource in each of the last two budgets to deal with it, and plans to bring in another 2,400 debt management officers by 2029/30.
What a winding up petition actually does
A winding up petition is about as far as a creditor can go. Succeed with one and the company is pushed into liquidation, with assets sold off to settle what is owed.
HMRC is not just filing them. Of the petitions it pursued last year, 2,397 reached the winding up order stage, up 27% from 1,886 the year before. That is the end of the road: the courts force liquidation and the assets go.
Peter Kubik, partner at UHY Hacker Young, said HMRC is leaning on petitions and the prospect of liquidation as a collection method, and that directors should read it as a signal that tax debt is being pursued harder than at any point previously as the department works through its arrears.
Why more companies are falling behind
Trading conditions are part of the story. Employment costs have risen, borrowing is more expensive and the tax burden has grown, which has left some businesses short when payment dates come round.
There is an alternative to the courtroom. A company with a short-term cash flow problem can try to agree a Time to Pay arrangement with HMRC, spreading a liability over a longer period instead of settling in one go. Get one in place and the company is not being shut down.
Kubik’s advice to directors in that position was blunt: do not let it drift. In his experience HMRC will usually talk through payment options with companies that come forward early and are straight about their position.
