High-flying Stevenage recruitment firm whose hot-shot director was named Hertfordshire business person of the year 2016 is bailed out after owing £2m to creditors
A recruitment firm whose meteoric rise saw it named best new agency in the UK-wide Recruiter Awards in May has had to be bailed out after going into administration – owing more than £2 million to its creditors.
Stevenage-based Evolve Resource Solutions,& trading as Primary Care People, claimed to be among the UK’s top medical recruitment agencies and pitched itself as being able to fill the gaps in the health service by recruiting GPs, nurses and other medical professionals and placing them in hospitals and doctors surgeries across the UK.
At the height of the firm’s success, its chief executive officer Tawhid Juneja was named FSB Hertfordshire’s Business Person of the Year 2016 and appeared to cash-in, buying a six-bedroom bungalow in Welwyn for £1,290,000.
But after its incredible rise to apparent success, the firm filed a notice of intention to appoint administrators on June 30.
The agency had fallen behind on paying GPs and nurses working for it and by its own admission owed them more than £350,000 when administration firm FRP Advisory LLP was called in.
Primary Care People failed to meet a deadline to pay its clients on June 30 but has since been bought out by well-known Watford-based recruiter McGinley Group which has acquired all its trading assets.
Under the buyout, McGinley has agreed to pay out a sum capped at £350,000 still owed to GPs and nurses by August 31 and says it will try to settle any further money owed based on the firm’s trading performance going forward – although it does not have to do this under the buyout deal.
Mr Juneja, 34, blamed his firm’s collapse on a “perfect storm” of financial problems including a million-pound out of court settlement to a former employee, the loss of its financial director through sickness and crucially the decision to pay its clients directly.
He vowed to make sure the mistakes are not repeated and said he hoped the firm could rebuild trust among its client base.
He said: “We had a number of really difficult things happen at the same time, but I think we tried to do the best we could in the circumstances we were in.
“Of course our reputation will have been affected but it’s important that people know we will always try to do the right thing.”
A statement from McGinley said it will be introducing a new group leadership team that will oversee a new business strategy.
It says it will also be implementing its ISO-accredited policies, procedures and processes to safeguard the business and its people via McGinley’s central services team based at its headquarters in Watford.
Who is Tawhid Juneja?
Tawhid Juneja has a history of setting up recruitment companies that have quickly been dissolved or fallen into financial difficulties.
Information held by companies house shows he was born in July 1983. In total he has been appointed director of seven recruitment companies since 2013. All of these bar one have been dissolved or placed into administration.
They include Evolve Resource Solutions Ltd which went into administration with debts of £2,362,710 and is understood to have been the company that traded as Primary Care People.
Others that have been dissolved include Community Care People, Primary Care People LLP, Resource Specialists Ltd which was dissolved and Offender Health People Ltd which was dissolved.
When Evolve Resource Solutions Ltd went into administration it owed money to creditors including £1,200,000 to moneylender Premium Credit Limited, £375,000 to Locum Staffing Limited and 54,112 to CloserStill Medical Limited.
Changes in government tax guidelines known as IR35 which Primary Care People hoped to benefit from were instrumental in its sudden fall from grace.
The changes introduced in April this year meant NHS employers had to assess whether they were liable to pay the tax and national insurance for their agency workers in the same way they would for permanent staff.
If they found they were liable, they would have to deduct the taxes from the member of staff’s wage packet. Previously temporary medical staff such as locum doctors would often have their own limited companies which would make their own tax arrangements.
In effect it meant many temporary staff might lose up to 30 per cent of their take home pay after the taxes were deducted.
PCP therefore told all its clients it would take care of their IR35 tax assessments for them and would pay wages to its recruited staff directly and would only later be paid back by the NHS.
However, faced with a legal battle and cash flow problems, this proved too much for PCP.