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).
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