Press release: Five tax scheme companies wound-up

The five companies – KSA Associates (UK) Limited (KSA), Ezybackoffice Limited (EZY), Temp Payroll Services Limited (TPS), A & T Active Recruitment (UK) Limited (A&T) and B Diminish Limited (BDL) were wound-up by the High Court on 17 October 2017, following an investigation by the Insolvency Service.

The Court heard that, under a contrived structure designed to take advantage of tax benefits available to professional service companies (PSCs), A&T acted as recruitment agents for temporary workers who were then given the option to be directly employed by them or, alternatively, to provide their services through their own PSC.

KSA, provided, amongst other things, accounting and bookkeeping services to the PSCs and was appointed to act as their agent whilst TPS and Ezy provided payroll services to the PSCs. BDL was one of 211 PSCs set up under the model.

The Court found that there was a lack of transparency in the scheme being operated by the companies. This included the temporary workers, for many of whom English was not their first language, being appointed as directors and/or employees of the PSCs having no meaningful knowledge of the companies and their directorships.

Enquiries showed that some of the workers were unaware of their appointment as directors. One named director was said to be autistic and had never heard of KSA. Furthermore, the court was told, the main beneficiaries from the scheme were KSA, EZY and TPS rather than the PSCs or the temporary workers.

Chief Investigator at the Insolvency Service, Alex Deane, said:

This was a complex enquiry into a sophisticated scheme involving systematic abuse of the corporate regime and where the named directors of the PSC companies often had no idea of the scheme they were involved in.

Those operating such schemes should be aware that the Insolvency Service will intervene when appropriate to stop them.

Notes to Editors

The petitions to Wind-up the companies were presented to the High Court on 30 June 2016, under the provisions of Section 124A of the Insolvency Act 1986 following confidential enquiries by Company Investigation under Section 447 Companies Act 1985, as amended. The Winding-up order was made on 17 October 2017.
The order was pronounced by Deputy District Judge Watkin, with Lucy Wilson-Barnes of Zenith Chambers appearing for the Insolvency Service. The proceedings were not defended.

KSA was incorporated on 19 January 2012, registration number 07917066. Its registered office is at Vincent Court, Hubert Street, Aston Lock, Birmingham, B6 4BA. The company’s directors, until 17 July 2017, were Kevin Patrick Sharkey and Nathan Kingsley Golby.

EZY was incorporated on 7 May 2013, registration number 08516979. Its registered office is at Vincent Court, Hubert Street, Aston Lock, Birmingham, B6 4BA. The company’s directors, until 17 July 2017, were Kevin Patrick Sharkey and Nathan Kingsley Golby.

A&T was incorporated on 27 January 2015, registration number 09408613. Its registered office is at Vincent Court, Hubert Street, Aston Lock, Birmingham, B6 4BA. The company’s directors, until 17 July 2017, were Kevin Patrick Sharkey and Nathan Kingsley Golby.

TPS was incorporated on 3 November 2013, registration number 09292550. Its registered office is at Vincent Court, Hubert Street, Aston Lock, Birmingham, B6 4BA. The company’s directors, until 17 July 2017, were Kevin Patrick Sharkey and Nathan Kingsley Golby.

BDL was incorporated on 6 November 2014, registration number 09297833. Its registered office is at Vincent Court, Hubert Street, Aston Lock, Birmingham, B6 4BA. The company’s directors were Theodore Ufuah and Adrian Kasprzyk (until 5 November 2015).

Company Investigations, part of the Insolvency Service, uses powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK on behalf of the Secretary of State for Business, Energy & Industrial Strategy (BEIS).

Further information about live company investigations is available here

The Insolvency Service, an executive agency sponsored by the Department for Business, Energy and Industrial Strategy (BEIS), administers the insolvency regime, and aims to deliver and promote a range of investigation and enforcement activities both civil and criminal in nature, to support fair and open markets. We do this by effectively enforcing the statutory company and insolvency regimes, maintaining public confidence in those regimes and reducing the harm caused to victims of fraudulent activity and to the business community, including dealing with the disqualification of directors in corporate failures.

BEIS’ mission is to build a dynamic and competitive UK economy that works for all, in particular by creating the conditions for business success and promoting an open global economy. The Criminal Investigations and Prosecutions team contributes to this aim by taking action to deter fraud and to regulate the market. They investigate and prosecute a range of offences, primarily relating to personal or company insolvencies.

The agency also authorises and regulates the insolvency profession, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.

Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available.

All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit, 2nd Floor, 3 Piccadilly Place, London Road, Manchester, M1 3BN. Tel: 0161 234 8531 Email: piu.north@insolvency.gsi.gov.uk

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