Can You Close a Company That Still Owes HMRC Money?

A company can still be closed if it owes money to HMRC, but the correct route depends on whether it can repay the debt. Directors should not assume that striking off the company will make unpaid VAT, PAYE or Corporation Tax disappear. HMRC may object to dissolution while tax remains outstanding. If the company is insolvent and cannot pay its debts as they fall due, a Creditors’ Voluntary Liquidation may be more appropriate. Where the business remains viable, a Time to Pay arrangement could also be considered. The key is to assess the company’s financial position before choosing the closure route.

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