Chancery Division Asserts Jurisdiction Over HMRC’s New Power to Wind Up: Commissioners of HMRC v Purity Ltd [2024] EWHC 2965 (Ch)
This decision is relevant as it is the first to consider the power granted to HMRC by s85 Finance Act (FA) 2022, namely to wind up companies where it appears to them that it is “expedient in the public interest, for the purposes of protecting the public revenue” (s85(1)).
The Insolvency and Companies Court Judge found the following:
- Public law defences can be raised by companies in the context of a s85 FA 2022 petition;
- It is for the court hearing the petition to deal with all defences raised, including public law defences, before determining whether to make a winding up order;
- Petitions under s85 FA 2022 are to be treated similarly to public interest petitions pursuant to s124A Insolvency Act (IA) 1986;
- Despite the width of HMRC’s powers under s85 FA 2022, on the wording of the provision there is no express or implied restriction on the ability of the company as a defendant to raise public law defences; and
- There is no comparison to be made between creditors petitions and public interest petitions.
Read the full judgement here.
