A high-profile recruiter has restructured, redefined and cut back her London business in the wake of a tax bill of more than £100,000.

Recruitment-to-recruitment firm Ruella James entered a corporate voluntary arrangement in early October to repay HM Revenue and Customs £105,527.97 and other creditors a total of £15,175.73 over a period not to exceed 63 months, according to documents filed with Companies House.

Managing director Ruella Crouch told Recruiter that a combination of events beginning in 2004 - including a move to new premises and the loss of three of the company's major billers - ultimately led to her decision to enter the repayment arrangement. "There comes a point where you have to do the right thing," Crouch said. "It would have been irresponsible to carry on with a debt like that, particularly without doing something about it."

Four consultants were made redundant at the end of August. A fifth employee chose to leave because of lessened responsibilities.

"It was awful," Crouch said. "When you've worked very hard for seven years building up a business, it's devastating when this happens. But you have to look at the positives, look at what you've learnt, and you have to use the positives in moving forward. Once I got over the initial shock…I got on with it."

Crouch is now redefining her business by focusing more on search and selection within the rec-to-rec sector. For her company, that means "sourcing more candidates through more networking and headhunting".

"It's trying to fulfil clients' requirements in a more proactive manner, rather than waiting for the right candidate to walk through the door," she said.

Clients and creditors have been "very supportive", Crouch said.

Now staffed with two full-time employees, including Crouch, the company will soon add two part-timers in headhunting and resourcer roles. The company is also moving to smaller offices next year.

Ruella James is a three-time winner of Recruiter Awards for Excellence and continues, Crouch said, to "represent some of the best talent in the industry". She said: "I am absolutely confident that we can ride through this blip, and come through the other side a stronger, fitter company."