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HMRC internal manual

Compliance Handbook

How to do a compliance check: charging tax and penalties: contrived insolvency


There may be cases where a company applies to be struck off for the sole purpose of avoiding paying liabilities owed to HMRC, this is known as a contrived insolvency.  If at any stage of a compliance check you are concerned that the company is about to apply to be struck off as a result of your check, consider referring your case for review by an insolvency team in your business area.

Once a company has been removed from the register (struck off), HMRC are at risk of being unable to pursue the debt owned by the company. You can take action and object to the company dissolution or striking off using an application called BISTO, this will delay the process for a period of 6 months. Guidance on using the BISTO application can be found at COM42200.