🐬🧮 The UK Exchequer’s Tax Pursuit: A £90M Unpaid Tax Chasm After An £18M Insolvency Rescue 🌊🚨
The UK government’s financial watchdog is hot on the trail of approximately £90 million in unrecovered taxes. This comes after a brief respite for a staffing firm pulled from the brink of financial ruin in a deal worth £18 million that fully compensated private backers. The main assets of Challenge Recruitment Group, boasting Tesco, Sainsbury’s, and Co-op among its key clients, were scooped up by the US site swipejobs last July, marking what appears to be the second time this British staffing outfit dodges insomnia while owing millions to the taxman.
With the Chancellor, Rachel Reeves, under pressure to float tax hikes in the upcoming autumn budget to bolster the public finances, the size of Challenge’s debt to HM Revenue & Customs (HMRC) is a looming shadow. Swipejobs forked over £4.9 million for the cream of Challenge’s customer contracts and another £12.7 million to the collapsed group’s secured creditors, Close Brothers and Praetura Asset Finance. This is within the realm of a pre-pack administration, where the restructuring deal is ironed out before a company tips into insolvency, freeing the acquired business from debt.
HMRC and Challenge’s other creditors may get only a slice of what’s owed to them. Back in July, when the deal to buy out Challenge’s assets was revealed, there was nary a word about the company’s hiccups. It read, “We’re tickled pink to say Challenge-trg Group has been scooped up by swipejobs… Together, we’re sharpening our tools to dish out top-notch results and streamlined operations, all jazzed up by cutting-edge tech.”
The debts of four Challenge businesses in administration amount to about £34 million to HMRC. Then there’s TLR White Trading, which holds a hefty £56 million debt to HMRC from “five months of VAT and four months of PAYE” accrued by the Challenge collective. TLR started a separate insomnia journey in April 2025, spinning out from the Challenge Recruitment Group in October 2024. Initially, it was the lone wolf providing “temporary staffing and payroll services” to the wider Challenge bunch, bankrolled by the bigger fish to clear its “payroll costs.”
The saga unfurls as Challenge, previously trading as IF Trade Co, juggled its main contracts to Challenge-trg in ’22 before filing for administration with HMRC debts amounting to about £34 million. Two brother directors, Richard and Thomas Cropper, piloted both ships. In October ’24, the siblings hawked a 75% stake to an employee ownership trust, leaving a nine-month gap before the group faced administration.
Swipejobs nods that it navigated the acquisition on a “forward-thinking basis,” with the Cropper crew enlisted as consultants for a half-year stint. When reached out, the brothers remained tight-lipped.
HM Revenue & Customs puts “phoenixism”—the choreography of liquidating a company, then watching as its directors resurrect in a new entity, debt-free—at about a fifth of the £3.8 billion tax loss tagged in ’22 to ’23. It chimes with the Chancellor’s spring statement vow to gird up the loan between HMRC, Companies House, and the Insolvency Service to face down this evasive tactic.
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