Dragon Studios, one of the largest film and TV production facilities in Wales and home to high-profile projects like Willow and Havoc, is facing potential closure following a tax enforcement action by the UK government.

HM Revenue & Customs (HMRC) has filed a winding-up petition, seeking a court order that could force the Bridgend-based studio into liquidation over unpaid debts. According to the company’s latest financial filings, Dragon Studios owes roughly $315,000 (approx. €290,000) in outstanding taxes and social security payments. Total debts to creditors amount to $3.1 million (approx. €2.9 million), with $1.42 million (approx. €1.3 million) attributed to additional liabilities.

The petition, often used as a last resort to recoup debt, can trigger an immediate freeze on bank accounts, bringing production operations to a halt. In a statement, Dragon said it had not yet received the petition but had reached out to HMRC to address the issue. The studio remains operational for now.

Dragon Studios, founded by businessman Gethyn Mills, sits on a 100-acre site and includes five sound stages. In 2022, the company secured a $11.6 million (approx. €10.7 million) investment from Bergen Finance to fund an ambitious expansion. Projects shot on the lot include The Bastard Executioner (Fox), Brave New World (NBCUniversal), Sherlock (BBC), and Netflix’s The King.

The news comes at a turbulent time for the UK production sector. Just weeks ago, Fulwell 73’s $580 million (€535 million) Crown Works Studios lost its main backer, while the sale of Bristol’s Bottle Yard Studios collapsed. Fallout from the Hollywood strikes and renewed U.S. protectionist rhetoric—especially talk of tariffs on foreign film production—has added pressure to British studio operators.

An HMRC spokesperson commented, “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.”