The 40-strong ‘better burger’ chain, which is backed by Active Partners, had been negotiating a renewal of its ‘time to pay’ agreement, which would have given it more time to settle its tax bill.
However, HMRC rejected the call and subsequently hit the company with a winding-up petition – a court order that forces an insolvent company into compulsory liquidation.
Honest Burgers paid the bill in full two days later.
In a statement shared with Restaurant, a spokesperson for the group said: “If we could deliver burgers half as quickly as HMRC delivers petitions, our like for like sales growth would be even higher than the 20% we are seeing now.
“Like many hospitality businesses, Honest Burgers has benefited from ‘time to pay’ agreements and was negotiating a renewal with HMRC, supported by expert advisers, to maximise cashflow.
“We asked for a renewal. They said no. We paid in full two days later, despite being told we had six weeks before they’d actually post a petition. The petition was removed.”
The group added that it was ‘now back growing the business’ following its recent £3m crowdfund, which was launched back in September to enable Honest Burgers to ‘challenge the big guys’ with a move into the QSR space.
The Sunday Times, which first broke the story, reports that HMRC is ‘clamping down’ on time to pay arrangements.
Many of the debts are a legacy of the pandemic, when HMRC used such arrangements to avoid forcing companies into bankruptcy.
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.”