In HMRC v Winnington Networks ([2014] EWHC 1259) the Chancery Division granted HMRC its application for the appointment of provisional liquidators.
HMRC was applying for the appointment of provisional liquidators in relation to two companies on the basis of the non-payment of VAT assessments and of future VAT assessments. The sums at stake were in excess of £16 million.
The court observed that the application was without notice and could therefore only be justified by exceptional circumstances particularly since the companies would not have a chance to demonstrate that they had a good arguable case against the debt.
HMRC contended that the two companies had traded on an uncommercial basis the only benefit of the trade being the ability to retain VAT which resulted from false claims.
Agreeing with HMRC the court observed that the chain of supply was organised to ensure that no profit...
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