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

HMRC on the warpath big time

Posted by John Beech on January 5, 2010

There is increasing evidence that HMRC are adopting a much more aggressive, and thereby less tolerant, policy towards football clubs, which is hardly surprising in the circumstances.

Back in July they served a winding-up petition on King’s Lynn, to add to the serious problems the club was already facing, including enforced demotion (see postings passim and in particular King’s Lynn down a key player as they face HMRC).  This proved the straw that broke the camel’s back, the club folding.

King’s Lynn were not alone in being served winding-up petitions by HMRC.  Other non-league clubs to have had the same treatment in recent months are Harlow Town, Hinckley United and Margate, all with less dire consequences fortunately. (Use the Search function directly above the images in the right-hand column to find earlier postings)

Not that HMRC’s actions have been exclusively against non-league football clubs.  A number of rugby clubs have also been served winding-up petitions, and so have five Football League clubs.

In September HMRC served a winding-up petition on Rochdale (1), seemingly in response to what they saw as the club’s continuing reluctance to pay rather than in a belief that the club was in any way unable to pay.  I have seen no news on this since, so assume the flexing of HMRC muscles had the desired effect.

Accrington Stanley were taken to the brink in November, the action forcing a takeover of the club (see postings passim).  Southend United have had a long battle, having been in court on 29 July 2009, 28 October 2009, 4 November 2009 and 9 November 2009 before finally getting the petition dismiseed (2, and see also postings passim).

HMRC’s latest skirmishes have been with Cardiff City and Notts County.

Cardiff City I have blogged about on a number of occasions previously, noting the need to decode club statements.  The latest round involves stolen documents and angry statements from Peter Ridsdale.  In brief, in mid-December legal confrontation resulted in an agreement being reached over a debt of £1.2 million (3).  However, according to a report in The News of the World (4), Cardiff were once again in trouble with HMRC for failing to meet the first repayment agreed. Ridsdale duly issued a statement in response (5), which, while insisting that the report was out-of-date and protesting that it was based on documents stolen from the club, was noticable in its lack of denial that the club had indeed failed to meet the first payment on time.  He declared “We are happy that Cardiff City Football Club’s relationships with its creditors including HMRC are such that we will not have any financial issues that will affect the ability of the Club to continue to trade as normal in all aspects of its business“.  Certainly Cardiff City Supporters Trust are less than happy with the situation (6), and it seems unlikely that HMRC share Ridsdale’s happiness.

Meanwhile over at deeply troubled Notts County, the club is  experiencing an HMRC double whammy – the serving of a second winding-up petition (7).  An HMRC spokesperson said “We provide time to pay for viable businesses“.  I wonder just how many football clubs receiving HMRC winding-up petitions will find any comfort in that.

Of course it would be remiss of me to forget to include Portsmouth in this list of miscreants.  Here we are promissed ‘a statement will be released later today which will “explain everything”‘ (8).  Everything???  We can expect a lengthy statement then.

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13 Responses to “HMRC on the warpath big time”

  1. One wonders who’ll be left after the HMRC purge

  2. Simon Cope said

    Can’t wait for the Pompey statement… If I worked at HMRC I would be a bit miffed that a good slice of Pompey’s income (January Sky TV money) is being directed straight to football creditors by the Premier League, and therefore not used to pay their oustanding tax bill(s). Administration is beckoning, surely? Or possibly yet another change of ownership?

  3. John Beech said

    POMPEY UPDATE

    At last, that headline… ‘Pompey players paid at last’, but still no statement.

  4. John Beech said

    SALISBURY LATEST

    Changes at Salisbury, who had been in Administration and under transfer embargo because of debts to HMRC of almost £200,000 – the club has been bought from the Administrator by the Harrison-Allan consortium (1), and the transfer embargo has been lifted following an agreement between HMRC and the new regime for the debt to be repaid over three years (2), with the proviso that 25% of any monies from cup runs will go to HMRC.

  5. John Beech said

    CARDIFF LATEST

    Notwithstanding all Peter Ridsdale’s recent protestations (see postings passim, a second winding-up order has been served on the club (1).

  6. John Beech said

    HINCKLEY LATEST

    Hinckley United have been hit with a transfer embargo by the Conference over unpaid debts to, who else, HMRC (1).

  7. John Beech said

    PLYMOUTH ARGYLE

    It has emerged that the club was recently served with a winding-up petition by HMRC over unpaid tax (1), but the bill has now been settled.

  8. John Beech said

    SOUTHEND LATEST

    The Guardian is reporting (1) another round in the battle between the club and HMRC, with Chairman Ron Martin claiming that the club has overpaid their tax bill by £200,000. As I write, there is no statement yet on the club website (2).

    It strikes me as odd, given how long this saga has been going on, that it has taken so long for the alleged discrepancy to be discovered.

    • John Beech said

      SOUTHEND UPDATE

      The club website now has a statement (1). It includes “The Club believe they have overpaid PAYE by over £200,000 and accordingly have offset this amount against sums that would become due on 19 November and late December (months 7 and 8 respectively). HMRC were advised of this intention.

      This would certainly explain the latest action by HMRC – it is unlikely that they would take kindly to be told the club would pay what it thought was due rather than what HMRC had, rightly or wrongly, decided was due.

    • John Beech said

      SOUTHEND LATEST

      The club’s stand-off with HMRC has prompted a fresh winding-up petition (1). Chairman Ron Martin says “HM Revenue and Customs is handing out the petitions like “confetti”“, an inappropriate simile as Southend attracts rather more than other clubs. He commented “HMRC’s relationship with the football industry is not, in some quarters, a marriage made in heaven“, a sentiment HMRC no doubt shares, although probably with some clubs more in mind than others.

  9. […] HMRC on the warpath big time […]

  10. Catherine Moss said

    Are there any figures available for the number of clubs going insolvent since June 2008? (Knowing that 56 clubs in the English League became insolvent between the introduction of the 1986 Insolvency Act and June 2008, thanks to the 2008 Working Paper).

    Thank you

    • John Beech said

      I plan to add a ‘Data’ tab leading to some pages with a range of information on insolvency events (in other words, all cases of entering Administration plus a few other events that can also be defined as ‘insolvency events), with (I hope!) all events since June 2008 and an updated and expanded list for the period from 1986 to 2008. The lists should include all events for clubs in the top four tiers, and as many as as I’ve managed to find in the lower tiers.
      It’s more complex that it first appears I’m afraid, but hopefully the new pages will explain all.

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