The UK exchequer is pursuing approximately £90 million in unpaid taxes from Challenge Recruitment Group, a temporary staffing company that recently emerged from insolvency proceedings through an £18 million acquisition by the U.S.-based Swipejobs. Challenge, which had major clients including Tesco, Sainsbury’s, and Co-op, has a history of insolvency, having previously owed large sums to the exchequer.
Swipejobs acquired Challenge’s main assets in July as part of a pre-pack administration deal valued at £4.9 million, alongside £12.7 million paid to secured lenders. A pre-pack administration allows a business to be restructured before insolvency, enabling the acquisition to shed debt and repay creditors partially with the proceeds.
The existing creditors of Challenge, including HM Revenue and Customs (HMRC), are expected to receive minimal repayment. The debts owed to HMRC are significant, with reports indicating that four Challenge companies in administration owe about £34 million, while a separate entity, TLR White Trading, owes an additional £56 million related to tax obligations.
This situation unfolds as Chancellor Rachel Reeves faces pressure to introduce tax increases in the upcoming autumn budget to support public finances. The recent acquisition follows previous financial issues for Challenge, which, operating as IF Trade Co, had transferred its contracts to Challenge-trg before entering administration with approximately £34 million in debts to HMRC.
Founders Richard and Thomas Cropper, who were directors of both IF Trade and Challenge-trg, sold a 75% stake in Challenge to an employee ownership trust in October 2024, just months before the group entered insolvency. They are now under consultancy contracts with Swipejobs for six months. An HMRC spokesperson stated that the government is aiming to enhance collaboration among HMRC, Companies House, and the Insolvency Service to combat corporate insolvency practices that may facilitate tax evasion.
Source: https://www.theguardian.com/politics/2025/aug/31/uk-chasing-90m-in-taxes-from-temp-staffing-firm-rescued-from-insolvency