Bosses at the North East based contractor were taken by surprise by the move by the tax man last week.

The firm is now set for talks with HMRC to settle the bill which the Enquirer understands relates to R&D tax credits.

The petition was served against holding company Merit Group Services and had no impact on sites or the trading business.

It came as Merit continues to work with Interpath Advisory to secure new funding for growth plans including a major factory extension to help service a £1.6bn work pipeline.

The firm is also in negotiations with a key client about overdue payments on a job.

A spokesperson for Merit said: “We are aware of reports that a winding up petition has been issued against Merit Group Services. We want to make clear this was unexpected and as yet, has not been received by the company. It does not relate to our trading businesses, Merit Holdings and Merit Health, which are unaffected.

“At the same time, however, we are currently in discussions with one of our key customers with regards to resolution of some substantial payments that are now significantly overdue. We continue in collaborative dialogue with the customer and are hopeful that the matter will be resolved in short order.”

Latest results for Merit for the year to June 30 2024 show a turnover of £79.8m generating pre-tax profits of £5.8m.