HMRC are usually the largest creditor of an insolvent company
Contacting your creditors in advance of a payment falling due that you know you can’t pay is a good initial step and immediately gives you more options with HMRC
The most drastic action that can be taken by HMRC is by issuing a winding-up order
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Common tax debt problems
When referring to tax debt within a company we are usually referring to outstanding PAYE, VAT, Corporation Tax and other statutory payments.
HMRC is typically the largest creditor within a company due to all of the tax payments that need to be made on behalf of the company, and these payments tend to take a back seat when a company starts to enter troubled waters.
This is principally due to the historically poor collection procedures used by HMRC. This position is changing as HMRC are outsourcing their debt collection more often.