Honest Burgers settles dispute with the taxman over unpaid bill

Honest Burgers has settled a legal dispute with HMRC after its request for extra time to pay a tax bill was refused.

The restaurant chain, which was founded in 2011 and operates 40 sites, received a winding-up petition from tax officials last month, according to the Sunday Times.

A winding-up petition is a legal challenge where a creditor, in this case HMRC, can start court proceedings to liquidate a company over its unpaid debts.

Honest Burgers said it had tried to extend a ‘time to pay' agreement, which gives firms longer to settle their bills, but HMRC had refused.

Such agreements were used during the pandemic to save companies from falling into bankruptcy, but the Sunday Times said the taxman was increasingly clamping down on their use.

Honest Burgers has since paid back its debts but said it was surprised at the speed at which it had been notified of court proceedings.

A spokesperson for Honest Burgers told The Caterer: "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 restaurant chain said it was now focusing on growing its business after crowdfunding nearly £3m to support the opening of further sites and the launch of a new quick-service burger concept in 2024.

A spokesperson 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."

Image: Roger Utting / Shutterstock