Phoenixism Drains Millions from UK Taxpayers

Published: 06 January 2026. The English Chronicle Desk. The English Chronicle Online.

UK taxpayers are losing tens of millions every year due to “phoenixism” at recruitment firms, HMRC data suggests. Phoenixism, the practice of liquidating insolvent companies and restarting them under new ownership while leaving debts unpaid, has repeatedly cost the exchequer enormous sums. Since the autumn, new cases have emerged where recruitment businesses were bought out of pre-pack administrations, allowing previous directors or shareholders to continue trading while evading tax obligations. The practice has drawn fresh scrutiny from regulators concerned about unfair competition and systemic tax losses.

In one instance, Russell Taylor, a recruitment firm, was acquired from pre-pack administration for £200,000 plus instalments of £550,000, leaving almost £1 million unpaid to HMRC. This marked the second time in a decade that connected parties had resurrected the business after insolvency. Robert Kurton, the current managing director, previously held minor shares in the company’s predecessor but now controls the new entity. Administrators note that Kurton will continue as both director and shareholder of the revived firm.

A spokesperson for Russell Taylor Group stated that Kurton’s prior involvement was limited and emphasized that the administration process is ongoing. Meanwhile, Silven Recruitment, specializing in food and drink staffing, was purchased for around £150,000 after owing £600,000 to HMRC. Jeremy Pierce, who was both director and majority shareholder of the previous company, now holds similar positions in the purchaser, Northbridge 75. Pierce rejected accusations of phoenixism, stressing that administration was a last-resort measure to safeguard jobs and provide the best outcome for creditors.

Another case, Qualiteach, which supplies teachers to UK schools, was sold for £27,000 to a connected party despite owing at least £304,988 to HMRC. Administrators confirmed that both companies shared a director and shareholder, Josh Brandon. These cases illustrate how phoenixism continues to cost the taxpayer significantly while raising questions about corporate governance and accountability.

Analysis by HMRC estimates that phoenixism accounts for roughly £840 million of tax losses annually, representing 22% of total losses reported between 2022 and 2023. The phenomenon has been particularly prevalent in the recruitment sector, where pre-pack administrations and asset transfers allow business owners to evade tax obligations repeatedly. Challenge Recruitment Group, which provided staff to Amazon, Tesco, and Sainsbury’s, had £90 million in unpaid taxes despite being rescued through an £18 million deal reimbursing private funders fully.

Similarly, Premier Group Recruitment went into administration with £2.9 million in debts, including £647,000 owed to HMRC, before its assets were acquired three days later by PGGBR Ltd, founded by Andrew Woosnam, the company’s former 99% shareholder. Experts argue that phoenixism creates a cycle that may incentivize repetition, giving unfair advantages to businesses willing to exploit insolvency strategies. Louise Gracia, accounting professor at Warwick Business School, warns that the economic risks, including unfair competition, outweigh any potential benefits of eventual tax recovery.

Despite scrutiny, phoenixism remains a legally ambiguous and widely debated practice. Its impact on public finances continues to spark concerns among policymakers, accountants, and business regulators. While some argue that HMRC eventually recoups lost taxes, the repetitive nature of phoenixism indicates a systemic vulnerability in insolvency law and enforcement mechanisms. Calls for stricter regulations have intensified, highlighting the need for transparent corporate governance and tighter oversight over pre-pack administration procedures.

Phoenixism not only erodes taxpayer confidence but also undermines the integrity of the recruitment sector. Repeated cycles of insolvency and re-establishment allow business owners to profit while leaving public funds exposed. Analysts suggest that better monitoring of director conduct and connected-party transactions could curb future losses, reinforcing accountability within the sector. The phenomenon demonstrates a persistent loophole where financial ingenuity exploits legal structures, often leaving smaller competitors at a disadvantage and the exchequer with substantial deficits.

As cases continue to emerge, the debate over phoenixism in the UK recruitment industry remains unresolved. Policymakers are under pressure to implement safeguards that prevent abuse, ensuring companies operate responsibly while safeguarding public revenue. Without decisive action, phoenixism risks becoming an entrenched mechanism for circumventing tax liabilities, continuing to cost UK taxpayers millions every year.

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