UK chasing 90m in taxes from temp staffing firm rescued from insolvency

"The UK exchequer is chasing about 90m in unpaid taxes after a temporary staffing business was rescued from insolvency proceedings in an 18m deal that reimbursed private funders in full. The main assets of Challenge Recruitment Group, which counted Tesco, Sainsbury's and Co-op among its top customers, were acquired from administration in July by the US website swipejobs, in what appears to be the second time the British staffing business has emerged from insolvency while owing tens of millions of pounds to the exchequer."

"Swipejobs paid 4.9m as part of a pre-pack administration deal for the pick of Challenge's contracts supplying staff to a series of huge UK brands, as well as 12.7m to the collapsed group's secured lenders, Close Brothers and Praetura Asset Finance, according to a report by administrators FRP. A pre-pack administration is a restructuring deal agreed in advance of a company entering insolvency a staged process that frees the acquired business of debt and leaves administrators to use receipts to at least partly pay creditors."

HM Revenue and Customs is pursuing about £90m in unpaid taxes after Challenge Recruitment Group's assets were bought in an 18m pre-pack that reimbursed private funders in full. Swipejobs paid 4.9m for key contracts and 12.7m to secured lenders Close Brothers and Praetura Asset Finance. The pre-pack freed the acquired business of debt, leaving remaining creditors, including HMRC, likely to receive only a fraction of what they are owed. Four Challenge businesses owe HMRC about 34m, and TLR White Trading owes a further 56m relating to months of VAT and other liabilities.

Read at www.theguardian.com