Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of Scoop.it! Football Finance

Margate’s struggles with HMRC

Posted by John Beech on September 28, 2009

Margate were back in the High Court this week.  On the 1st of July they had faced a winding up order from HMRC having only paid off half of a £55,000 debt (1).  This time around they were granted a further 56 days (2), having paid off £15,000.

This £15,000 had not emerged through improved cashflow, reduced costs or enhanced revenues however.  £12,500 of it had been raised by the sale of shares (3).

The further stay of execution was achieved through an undertaking to pay the balance, which I make to be £12,5000, in three monthly instalments of, I presume, just over £4,000 each.  Quite how this will be squeezed out of the club’s budget is far from clear, but the club have “satisfied the Court that funding is in place to repay the balance of the debt“.

Much of Margate’s woes derive from the club’s problematic attempts to redevelop Hartsdown Park.  Having been forced into exile in 2002, the club was relegated from the Conference as a result of ground issues in 2004.  The same year Keith Piper, by then the Chairman, announced that financial backing for a £6.75m redevelopment, with a 6,000 seater stadium and hotel complex (4).

By January 2005 the projected costs had risen to £9.5m and Thanet Council had still not granted planning permission, unconvinced by the proposed business plan (5).  By the end of April 2005 the club had called in the Administrators to protect itself from its creditors (6), but by October they had moved into a CVA (7).

By June 2007 they were in trouble with HMRC again (8).  HMRC have subsequently sought winding-up orders against the club in September 2008 and (the current attempt) in June 2009. It should also be noted that the club had faced winding-up orders from HMRC’s predecessors in January 1999 and April 2001.

Fans are now digging deep into their pockets to save the club (9), or, rather, to save the board.  They may want to think twice about bolstering a regime that is apparently more concerned with spending money it doesn’t have on building an inappropriately-sized stadium (Margate’s average gate was 453 last season – does the board really want the club to become the non-league answer to Darlington?) than on paying the taxman his long over-dues.

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11 Responses to “Margate’s struggles with HMRC”

  1. What makes you think the directors of Margate FC are the non-league equivalent of Darlington? That epithet may have belonged to Fisher Athletic.

    • John Beech said

      That’s not what I said or think! I asked whether they wanted to become the non-league equivalent, by which I meant ‘did they want to spend money on a stadium appropriate for a larger gate arising as a result of promotions, and end up with a half-empty stadium because they hadn’t the money to spend on building the squad that could deliver that?’

      I’m not sure I would want to compare Margate to Fisher Athletic either, or their respective boards, come to that! But neither are alone in chasing the new stadium which they can’t afford. There are plenty of examples, from Pompey downwards.

      • John

        Certainly agree there are plenty of examples from Pompey downwards.
        Funding for a new stadium at Margate FC will happen in due course. It’s matters on the field that need addressing for the moment. (You may have read about the (departure of Terry Yorath)

      • John Beech said

        I hope for the club’s sake you are right that funding will be found. But I think the club’s general finances are not particular healthy (with an academic’s sense of understatement!)

        Yes, I did see about Terry Yorath. It’s difficult to assess what he might or might not have achieved at a club with more money to spend on players.

  2. Jake said

    The only reason we need to develop the ground is so we can get promoted, I’m not sure if you’ve been to Hartsdown Park before or recently but the ground currently has only 2 sides, one which consists of temporary stands.

    Also average attendence wise, last season we had one of our worst seasons in history and attendences fell drastically. A return to the Conference even just the South would get the attedences back to around 700-900 in my honest opinion. Fair points though.

    • John Beech said

      It’s a classic problem, Jake, faced by many a club – avoiding putting all your funds into stadium development and doing a Darlington, AND avoiding putting all your funds into team development and then losing promotion because of ground criteria. Add to this a ‘chicken and egg’ element – to get funds you need to increase gates, but you need better players to get more through the turnstiles, and they are more likely to come through if you have better facilities – and there is a real dilemma.

      I would argue though that a spanking new stadium is not a honeypot. In general, spend the money on the team first and spend the minimum necessary on redeveloping the stadium. The case for a new stadium altogether is hard to make for a club that isn’t already successful on the pitch.

      Currently Hartsdown Park is not your ideal stadium obviously, but I don’t think a new 6,000 seater stadium will solve the club’s problems – it’s more likely to add to them. Improving the existing stadium seems a far more rational choice to me.

      • Jake said

        I don’t think we’re getting a new Stadium any more John, as far as I’m aware we’re now re-developing the Stadium which I too agree is a much better option. I think I remember hearing that we’re looking to develop the Coffin End at the moment which is currently empty.

  3. Fucktard said

    Quote “you need better players to get more through the turnstiles, and they are more likely to come through if you have better facilities”

    Not all footballers are like Sol “I’m quitting because I don’t like your training ground” Campbell

    • John Beech said

      My ambiguity there – I should have written “you need better players to get more spectators through the turnstiles, and they are more likely to come through if you have better facilities”.

  4. Margate’s problem would be considerably less had the idiotic decision to reduce half the ground to rubble not been taken in 2003.

  5. sad and blue said

    I am afraid like many people in Thanet i have all but given up on Margate Fc.
    The way the club has been run is shocking as Jeremy Jacobs said the decision to knock the ground down was idiotic. I would add IDIOTIC AT BEST.
    Until sombody walks away fom the club the ongoing mediocrity and tax dodging will continue.

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