A voluntary strike-off is often seen as a quick, low-cost way to close a company by removing it from the Companies House register. It’s designed solely for companies with no debts and no ongoing obligations.
If your company owes money, especially to HMRC, the process becomes far less straightforward. HMRC has the legal right to object to a strike-off if there are outstanding tax liabilities or any concerns about compliance.
To be eligible, the business must not have:
- Traded in the last three months
- Changed its name in the last three months
- Entered into any arrangement with creditors, such as a CVA
Companies House will place the intention to strike-off in the Gazette and interested parties, including HMRC, can object during the notice period.
Why HMRC might block a strike-off
HMRC can and regularly does block company strike-offs. There are two main reasons:
1. Outstanding tax liabilities
HMRC is one of the most proactive objectors to strike-offs where tax is owed. This includes:
- Corporation Tax
- VAT
- PAYE
- CIS deductions
- Penalties or interest
If any tax is outstanding, HMRC will almost always lodge an objection to prevent the company being dissolved before debts are dealt with.
2. Concerns about compliance or director conduct
Where HMRC suspects incomplete filings or potential misuse of funds – particularly when it comes to Bounce Back Loans, unpaid VAT and unpaid PAYE – they may also object. This then gives HMRC time to investigate.
The objection is not an automatic penalty. It’s HMRC protecting its right to recover tax properly and ensure the company is not dissolved before regulatory checks are completed.
What happens when HMRC objects?
If HMRC objects, your strike-off can be paused or rejected. Common triggers for HMRC objections include:
- Unpaid Corporation Tax
- VAT returns submitted late or not submitted at all
- PAYE arrears or missing payroll submissions
- Bounce Back Loan concerns
- Previous contact attempts ignored
Is strike-off ever suitable when tax is owed?
If you owe any debts to HMRC, or any other creditor, strike-off is not an option. It’s only appropriate for companies that are no longer needed and debt-free.
Even if HMRC or other creditors don’t object immediately, they could still restore the company through the courts within six years. Dissolving a company does not wipe debts or stop investigations.
Liquidation as an alternative to a strike-off
1. Company restoration
Even if your strike-off succeeds, HMRC can restore the company and pursue debts. Restoration is common where tax is owed.
2. Director investigations still apply
Dissolution does not prevent the Insolvency Service reviewing director conduct. Dissolved companies can be investigated, and director’s disqualification action can follow.
3. Personal risk if insolvency is ignored
If you continue trading while insolvent, you could face:
- Wrongful trading claims
- Personal liability for losses
- Recovery of overdrawn director’s loans
- Challenges for transactions at an undervalue
A CVL removes these risks by placing the company into a regulated process run by a licensed insolvency practitioner.
Not sure whether strike-off or liquidation is right for your company?
Our liquidation vs strike-off guide compares both routes clearly, to help you avoid costly mistakes.
Key takeaways on whether HMRC block a company strike-off
- Yes, HMRC can block your strike-off if any tax is owed or returns are missing
- They object frequently, and objections usually signal a deeper financial problem
- Strike-off is not permitted for companies with debts
- Other creditors can also block or restore the company
- Liquidation protects you from the risks of a strike-off, provided you have acted responsibly
Get advice on HMRC strike-off objections
If HMRC has blocked your strike-off, or you’re worried they will, the safest option is to speak to a qualified insolvency practitioner early. A short conversation can confirm:
- Whether your company is insolvent
- Whether a repayment plan is realistic
- Whether liquidation is the appropriate route
- How to protect yourself as a director
Trying to push a strike-off through rarely works and often increases your risk. Early advice gives you clarity, control and a compliant way forward.
Get in touch for free, confidential advice before HMRC escalates the situation.
