HM Income & Customs is searching for to get better about £90 million in unpaid taxes from non permanent staffing enterprise Problem Recruitment Group, after the corporate was rescued from insolvency in an £18 million pre-pack administration deal.
The US workforce platform swipejobs acquired Problem’s core belongings in July, taking up contracts with main UK shoppers together with Tesco, Sainsbury’s and Co-op. Directors FRP confirmed that the deal paid £4.9m for Problem’s contracts and £12.7m to secured lenders Shut Brothers and Praetura Asset Finance, repaying non-public funders in full.
Against this, HMRC and different unsecured collectors are anticipated to get better solely a fraction of what they’re owed.
Based on FRP’s report, 4 Problem group firms in administration owe HMRC round £34m. An extra £56m legal responsibility sits with TLR White Buying and selling, an organization spun out of Problem in October 2024 to deal with payroll and staffing prices. TLR White entered insolvency in April 2025, leaving months of VAT and PAYE unpaid.
The case marks the second time the enterprise has collapsed leaving HMRC with heavy losses. In 2022, when buying and selling as IF Commerce Co, the group transferred contracts to Problem-trg earlier than getting into administration with one other £34m owed to the exchequer.
Brothers Richard and Thomas Cropper, administrators of each IF Commerce and Problem, bought 75% of Problem to an worker possession belief in October 2024, 9 months earlier than the newest administration. They’ve since been retained on a six-month consultancy contract by swipejobs.
The affair highlights the apply generally known as “phoenixism”, the place firms are liquidated and re-emerge beneath new entities, leaving money owed — significantly unpaid taxes — behind. HMRC estimates phoenixism accounted for 22% of the £3.8bn in tax losses in 2022–23.
An HMRC spokesperson stated: “Because the chancellor introduced in her spring assertion, the federal government is taking motion to enhance collaboration between HMRC, Corporations Home and the Insolvency Service to deal with these utilizing contrived company insolvencies and dissolutions — so-called ‘phoenixism’ — to evade tax.”
The revelations come as Chancellor Rachel Reeves faces rising stress to lift extra revenues within the autumn price range to plug a fiscal hole of as much as £40bn. Enterprise teams have warned, nevertheless, that piling additional tax rises onto companies might dampen funding and progress.
For HMRC, the Problem case underscores the size of unpaid tax liabilities being written off in insolvencies — and the urgency of reforms to cease repeat collapses leaving the taxpayer short-changed.
