Posh fast food chain Honest Burger was locked in a legal dispute with HMRC after a plea to get an extension on paying a tax bill was ignored, it has been revealed.
The high street chain, which employs around 700 people and was first founded in Brixton, was handed a winding up petition by the tax officials last week, according to a report in The Sunday Times, after talks to agree a so-called time to pay arrangement fell through.
A winding up petition is a legal notice that creditors, or in this case HMRC, file with the courts requesting that they have a hearing to establish whether the company is insolvent.
It is thought that the taxman is clamping down on time to pay arrangements, which give businesses longer to pay their tax bills, as it works through a backlog of unpaid bills amassed during the pandemic.
Honest Burger told The Sunday Times that it was shocked at the speed with which HMRC took action, which could have resulted in the firm being wound up.
“The company said HMRC had indicated it would be six weeks before legal proceedings were issued for the business to be wound up. But a petition was filed at court less than a week later,” a spokesman for Honest Burgers said.
The company confirmed to City A.M. that the tax bill has now been paid and the winding up petition has now been withdrawn.
A spokesman for HMRC said: “We take a supportive approach to dealing with customers who have tax debts and only file winding-up petitions once we’ve exhausted all other options, in order to protect taxpayers’ money.”