Last updated: 14 October 2026
Can HMRC make you pay a company’s taxes after it closes?
Usually not, because a limited company’s tax debts belong to the company, not its directors. But there are important exceptions. HMRC can object to a company being struck off while tax is owed, ask for a dissolved company to be restored, or pursue directors personally if there’s been fraud, deliberate failure to pay PAYE or NIC, or “phoenixism”, where a director closes a company with debts and starts a similar one. You may also personally owe tax on money you took out before closure.
When directors can be personally liable
| Situation | Possible liability |
| Company closed owing corporation tax or VAT, no wrongdoing | No; HMRC is an unsecured creditor |
| Deliberate non-payment of NIC | Personal liability notice for the NIC |
| Tax avoidance, evasion or repeated insolvency | Joint and several liability notice |
| Overdrawn director’s loan account | Liquidator can demand repayment |
| Dividends paid without distributable profits | May have to repay them |
| Personal tax on distributions taken | Yes, always your liability |
Restoration of a dissolved company
HMRC, or any creditor, can apply to restore a dissolved company to the register within 6 years. If the company is restored, it’s as if it had never been dissolved, and HMRC can pursue the tax through the company and, if there’s misconduct, the directors.
Joint and several liability notices
Since 2020, HMRC can issue notices making directors and some shareholders personally liable for a company’s tax where:
- the company was involved in tax avoidance or evasion
- the company is, or is likely to become, insolvent
- the person was involved in a previous insolvent company with tax debts (phoenixism)
Example
Sara closes her consultancy company by voluntary strike-off in 2026. She believes everything is paid, but HMRC later finds the company owes £4,000 of VAT. Because the company has been dissolved, HMRC applies to restore it to collect the VAT. Sara isn’t personally liable for the VAT, but the restored company must pay it, and any money she took out without enough profits may have to be repaid.
Closing a company properly
- Pay all taxes and file final accounts and tax returns
2. Close the PAYE scheme and deregister for VAT
3. Distribute remaining funds; consider a members’ voluntary liquidation if over £25,000
4. Apply for strike-off using form DS01, after telling HMRC and creditors
Personal tax after closure
Distributions under £25,000 on strike-off are taxed as dividends at 10.75%, 35.75% or 39.35%. In a members’ voluntary liquidation, distributions are usually capital gains, possibly qualifying for Business Asset Disposal Relief at 18%. The Targeted Anti-Avoidance Rule can treat them as income if you start a similar business within 2 years.
Frequently asked questions
Can HMRC take my house for company debts?
Not unless you’re personally liable, for example through a guarantee or a liability notice.
How long can HMRC chase a dissolved company?
Restoration is possible for 6 years.
Do I need an insolvency practitioner?
Only if the company is insolvent or for a liquidation.
What if I didn’t know about the tax?
Restoration can still happen, but personal liability usually needs misconduct.
Related: directors’ liability for a dissolved company, closing your company and extracting profits and when a company counts as dormant.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with closing a company properly. See our limited company accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
