HMRC winding up petitions
Receiving a winding up petition from HMRC is one of the most serious steps in tax enforcement. It can lead quickly to advertisement in the Gazette, frozen bank accounts and, ultimately, compulsory liquidation.
However, even where a tax debt is undisputed, HMRC must comply strictly with the procedural rules governing service of a petition. A recent High Court decision in DG Resources Ltd v Revenue and Customs Commissioners [2025] EWHC 201 (Ch) confirms that failure to do so can have significant consequences.
For directors, the case is an important reminder that due process matters, particularly where Companies House has imposed a default registered office address.
At a Glance
The High Court has confirmed that a winding up petition must be served strictly in accordance with the Insolvency Rules 2016. Improper service, even where the debt is undisputed, can result in the petition being struck out.
What did the High Court decide in DG Resources v HMRC?
In DG Resources, HMRC presented a winding up petition against the company. The central issue was whether the petition had been properly served.
The company’s registered office had been placed at a Companies House default address. HMRC served the petition at that address, relying on general service provisions under section 1139(1) of the Companies Act 2006.
On appeal, the High Court held that this was not sufficient.
The court found that Paragraph 2 of Schedule 4 to the Insolvency Rules 2016 contains a hierarchical and exclusive code for service of winding up petitions. That code displaces the general Companies Act service provisions for this purpose.
Because HMRC had not complied with the Insolvency Rules service regime, the HMRC winding up petition had not been properly served. Despite the company having no substantive defence to the petition debt, the breach of due process was sufficiently serious that the petition had to be struck out. HMRC would need to start again.
What is a Companies House default address and why does it matter?
A default address arises where Companies House exercises its powers to change a company’s registered office, often because it considers the existing address to be inappropriate or ineffective.
- Where this occurs, the company may not be physically present at the default address. That creates practical and legal complications when documents, including statutory demands or winding up petitions, are served.
- The DG Resources decision makes clear that the existence of a default registered office does not allow a creditor, including HMRC, to bypass the specific service regime set out in the Insolvency Rules 2016.
For directors, this is particularly important. An HMRC Winding up petition served incorrectly can have severe consequences if not challenged in time, especially if it is advertised.
How must a winding up petition be served where the registered office is a default address?
The High Court confirmed that Paragraph 2 of Schedule 4 to the Insolvency Rules 2016 operates as an exclusive code.
In practical terms, this means:
- The petitioner must follow the hierarchical steps set out in the Insolvency Rules.
- It is not enough simply to rely on the general Companies Act service provisions.
- Compliance with the correct statutory route is mandatory, not optional.
This decision reinforces that insolvency procedure is technical and rule-driven. Even where the debt itself is not disputed, the court will require strict adherence to the prescribed service regime.
If your company knew about the petition, does improper service still matter?
One of the most striking aspects of the decision is that DG Resources did not have a substantive defence to the petition debt. Nonetheless, the petition was struck out.
The High Court emphasised the seriousness of due process.
- Proper service is not a mere technicality.
- It is fundamental to ensuring that a company has a fair opportunity to respond before the drastic consequences of a winding up order.
- Proper service of a winding up petition is not a technicality. It is a fundamental procedural safeguard.
For directors, the key point is that knowledge of the petition does not automatically cure defective service. The court will consider whether the statutory requirements have been met, and if they have not, the petition may be struck out even where the underlying liability is clear.
That said, timing is critical. Once a petition is advertised, commercial damage and banking restrictions can follow quickly. Procedural arguments must be raised promptly and strategically.
What should directors do if HMRC has issued a winding up petition?
If you become aware of a winding up petition from HMRC:
- Obtain a copy of the petition immediately.
- Check how and where it was served.
- Confirm the status of your registered office, particularly if a default address has been imposed.
- Take urgent advice from our specialist HMRC Winding up petition team on whether the Insolvency Rules service requirements have been satisfied.
Improper service does not remove the underlying tax liability. It may, however, affect whether the petition can proceed in its current form.
In parallel, directors should assess their wider position. HMRC enforcement often forms part of a broader pattern of tax arrears, time to pay discussions or compliance enquiries. A petition can also trigger scrutiny of director conduct and future eligibility to act.
The DG Resources decision is a reminder that HMRC must follow the correct procedural path. But it is not a shield against genuine liabilities. Early, structured engagement can help protect both the company and the directors’ longer-term position.
Winding up petitions remain one of HMRC’s most powerful enforcement tools in England and Wales. This case shows that the courts will insist on compliance with the Insolvency Rules, even where the debt is not disputed.
For directors facing HMRC pressure, understanding both the procedural framework and the commercial realities is essential.
