The published judgment in Abbey Forwarding[1] will not make for comfortable reading for HMRC. Having instigated the winding up of a profitable business, which led to the dismissal of 23 employees, and accused  innocent directors of fraud, HMRC then withdrew all assessments made against the company and attempted to avoid undertakings it had given to the court when seeking the original winding up order.

Often, when creditors start to take action against a debtor, the debtor will seek relief through the Bankruptcy and Insolvency Act(i). Some Trustees in bankruptcy even advertise that the bankruptcy process can be an important step on the road to “financial well being”. Creditors, upon receiving notice of their Debtor’s bankruptcy, may feel that the chance of any recovery all but disappears with the assignment into bankruptcy.