HMRC winding-up petitions against property-owning companies: what they mean and what happens next (UK)

An HMRC winding-up petition is a court application by HM Revenue and Customs asking for a company to be wound up over unpaid tax. Once it is presented, any later sale or charge of the company's property is void if the court goes on to make a winding-up order, unless the court validates it (Insolvency Act 1986, s.127). The petition is published in The Gazette under notice code 2450 before the hearing. It is a warning sign, not a confirmed insolvency: many petitions are paid, dismissed or withdrawn.

Our general guide covers what any winding-up petition tells you about a commercial property owner. This article looks at the most common petitioner against property-owning companies, among notices where the petitioner could be read: HMRC. It sets out the timeline, the legal effect on the company's land and buildings, and what a buyer or lender should check.

How often HMRC is the petitioner

We matched winding-up petition notices in The Gazette (notice code 2450) to companies that hold registered titles in England and Wales, using HM Land Registry's corporate and overseas ownership data. We read the petitioner from the published text of each notice.

• Petitions gazetted: July 2026 505, August 411, September 471.
• Against companies that own registered property in England and Wales: July 50 (9.9%), August 39 (9.5%), September 45 (9.6%). That is about 1 in 10 each month.
• Of those 134 property-owner petitions, the petitioner could be read from the notice text for 103. HMRC brought 79 of the 103 (77%).
• By month: July 27 HMRC of 36 readable, August 21 of 28, September 31 of 39 (79%).
• The other petitioners were mostly finance and trade creditors.

Caveat: 31 notices could not be parsed for the petitioner's name. They are excluded from the HMRC share, so the 77% applies to the 103 readable notices only, not to all 134.

From tax debt to petition

HMRC does not petition straight away. Its guidance says it will try to contact a taxpayer who misses a payment. If no instalment plan can be agreed, the actions it lists include taking the taxpayer to court and closing down the company where the tax is a business tax. HMRC says it will explain the action, costs and options before taking it.

To petition, a creditor has to show the court that the company cannot pay its debts. Section 123 of the Insolvency Act 1986 gives several ways to do this:

• Statutory demand: the creditor serves a written demand for a debt over £750 and the company fails to pay, secure or settle it for 3 weeks (21 days).
• Cash flow: the court is satisfied that the company cannot pay its debts as they fall due. A creditor can rely on this without a statutory demand, for example where an undisputed debt has gone unpaid despite requests.
• Balance sheet: the court is satisfied that the company's assets are worth less than its liabilities, including contingent and prospective ones.

The petition timeline

• Presentation: the petition is filed at court and a hearing date is set. Under s.129(2) the winding-up, if ordered, is treated as starting at this moment.
• Service: the petition is served on the company at its registered office.
• Advertisement: under rule 7.10 of the Insolvency (England and Wales) Rules 2016, a creditor must publish notice in The Gazette not less than 7 business days after service and not less than 7 business days before the hearing.
• Hearing: the court decides what happens next.

Under s.125(1) the court may dismiss the petition, adjourn the hearing with or without conditions, make an interim order or any other order it thinks fit. If it makes a winding-up order, the Official Receiver becomes the liquidator (s.136) and starts turning the company's assets into money to pay its debts. Other creditors can also support a petition and, if the original petitioner is paid or drops out, ask to be substituted (rule 7.17). A petitioner needs the court's permission to withdraw (rule 7.13).

Section 127: why property sales stall

Section 127(1) says that in a winding-up by the court, any disposition of the company's property after the winding-up starts is void unless the court orders otherwise. Because s.129(2) dates the start back to presentation of the petition, a sale, transfer or new charge made while a petition is pending can be undone if a winding-up order follows.

This is why petitions matter to anyone dealing with the company's land. A buyer could pay for a building and later face a liquidator's claim that the transfer was void. A lender could find its new charge set aside.

The company can apply for a validation order. The Insolvency Practice Direction (para 9.11) describes this as an order that a particular disposition of its property will not be void if the company is later wound up. The court expects evidence of the company's assets and liabilities, supported by documents such as its latest filed accounts, plus a cash flow forecast for the period the order covers. A validation order for a specific sale gives a buyer much firmer ground than the company's own assurance.

Bank accounts once the petition is advertised

Payments out of a company's bank account are also dispositions of its property. Once a bank learns of an advertised petition, it will usually freeze or restrict the account to avoid the s.127 risk. The company may then need a validation order to keep paying staff, suppliers or rent. For a property company, this can also stop routine payments such as service charges and insurance.

Time to Pay and other ways out

HMRC offers payment plans, often called Time to Pay arrangements. It checks whether a plan is affordable and asks about the company's income and spending. If a company has savings or assets, HMRC expects it to use them to reduce the debt. A company that agrees a plan, pays in full or shows the debt is genuinely disputed may see the petition dismissed or withdrawn. Agreeing terms is usually harder once a petition has been presented, so earlier contact tends to help.

Other outcomes include a refinance, a voluntary sale of an asset with a validation order, or a formal process such as administration. None of these is certain, and a petition does not mean the owner will have to sell.

How to check for a petition

• The Gazette: search notice code 2450 (Petitions to Wind Up (Companies)) by company name or number. Remember the notice appears some days after presentation.
• Court records: search the Insolvency and Companies List records, which show pending petitions sooner than the Gazette. Many solicitors run this as a standard winding-up search.
• Companies House: check filings and status. A winding-up order and the liquidator's appointment will appear there, but a pending petition often will not.
• HM Land Registry: check which titles the company owns and any existing charges. The petition itself is a court record, not an entry on the title.

What it means for a buyer or lender

A petitioned company can still be a willing seller, and some deals with these companies complete. The risk is that the money moves before the court decides. Practical steps include a fresh winding-up search close to exchange and completion, a validation order covering the specific transaction, and clear terms on where the sale proceeds go. This is general information, not legal advice. Speak to a solicitor before contracting with, or lending to, a company subject to a petition.

DealBrief matches Gazette winding-up petitions to the registered titles each company owns in England and Wales. That is how the figures above were produced.