Phoenix recruitment firms and unpaid tax bills: what “phoenixism” means for creditors and collections

Welcome to Debt Matters, the UK podcast for credit control, collections, and cashflow risk.

Today we’re unpacking “phoenixism” in recruitment: when a firm goes into insolvency, leaves debts behind, and a new company continues the trade under connected parties.

What happened

Multiple recruitment businesses have entered administration and then been sold out (often via pre-pack style deals), allowing operations to continue while large HMRC liabilities and other unsecured debts are left in the old entity. Estimates cited put the annual cost of phoenixism at around £800m, with analysis suggesting about £840m, roughly 22 percent of total tax losses reported for 2022 to 2023.

What “phoenixism” looks l ...