UK Tax Authorities Seek £90m in Unpaid Taxes After Staffing Firm Rescue Deal
The UK tax authority is pursuing approximately £90m in unpaid taxes after a temporary staffing firm was saved from insolvency in an £18m deal that fully repaid its private backers.
Challenge Recruitment Group, which previously worked with major retailers including Tesco, Sainsbury’s, and Co-op, had its key assets acquired by US-based Swipejobs in July after entering administration. This marks the second time the British staffing firm has avoided collapse while owing tens of millions in taxes.
The scale of Challenge’s debt to HM Revenue & Customs has come to light as the chancellor faces calls to introduce tax increases in the upcoming autumn budget to stabilize public finances.
According to a report by administrators FRP, Swipejobs paid £4.9m as part of a pre-arranged deal to take over select contracts supplying workers to several large UK companies, along with £12.7m to secured lenders Close Brothers and Praetura Asset Finance.
A pre-pack administration is a pre-negotiated restructuring that allows a buyer to acquire a debt-free business, while administrators use the proceeds to partially repay creditors.
Most remaining creditors, including HMRC, are expected to recover only a small portion of what they are owed.
When the acquisition was announced on 12 July, a statement from Challenge made no reference to the company’s financial troubles, instead saying: “We’re proud to announce that Challenge-trg Group has been acquired by Swipejobs … Together, we are in an even stronger position to deliver outstanding outcomes and improved efficiency, supported by advanced technology.”
Four Challenge businesses in administration owe HMRC roughly £34m, according to the administrator’s report.
A fifth entity, TLR White Trading, owes an additional £56m in unpaid VAT and payroll taxes from the broader Challenge operations. TLR White entered insolvency proceedings in April 2025, six months after being separated from Challenge Recruitment Group in October 2024. The newly independent company was created solely to handle temporary staffing and payroll services for the group and was financially supported by its parent company.
This latest insolvency follows a similar pattern from 2022 when the same recruitment business, then operating as IF Trade Co, transferred its primary contracts to Challenge-trg before collapsing with £34m in unpaid taxes, as per filings with Companies House. Brothers Richard and Thomas Cropper served as directors of both IF Trade and Challenge-trg.
Nine months before the group’s companies entered administration, the Cropper siblings sold a 75% stake in Challenge to an employee ownership trust for an undisclosed sum in October 2024.
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