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! Football Finance

Coming up in court, with HMRC

Posted by John Beech on January 23, 2010

The current HMRC surge of legal action (see HMRC on the warpath big time) hits the courts in the coming few weeks.

First up, on Wednesday 27th January, are Notts County, with a tax bill of £600,000 and total debts of £1.5 million (1) and Chester City.  In the case of Notts County it all depends on whether the various investors which Peter Trembling and Sven-Goran Eriksson have been courting while happily clocking the Air Miles actually materialise.  Personally I wouldn’t be too optimistic – do they really have an attractive offer to pitch?  Chester City are, in my opinion, the most vulnerable of the clubs currently facing HMRC.  Stephen Vaughan has brought the club to a situation which is worse than unsustainable, and it is hard to see how they will avoid Administration just before the court appearance.  There is talk of a Morell Maison fronted consortium taking over and the possible involvement of Frank Warren (2), but it is hard to imagine how he would see buying the existing company as a sensible investment.  As for Morell Maison exercising his option to purchase the Vaughan family’s shareholding of the football club, well, ask any Halesowen Town fan if this is the way to go (see postings passim) .  Before the court hearing the club must meet with the Conference to explain their current financial position – I’d love to be a fly on the wall (3)!

On 3rd February it’s the turn of Accrington Stanley.  The situation at Stanley is confusing – the debt of £308,000 was supposedly accounted for in the drama of Stanley’s last court appearance, is reported as paid (4), but a second petition has been served over a debt of around £70,000 (5).  Certainly the club is in a healthier financial position following their cup run (sadly now finished), and the chances are that the club will settle the bill before the court date (although time is running out fast).

Last up it’s Cardiff City and Portsmouth on 10th February.  With his usual spin, Peter Ridsdale purred assurance on 9th January that this is merely a backstop date, saying “We have every confidence that all monies owing to HMRC will have been repaid by the end of January” (6).  So far there has been no announcement that the money has been paid though, although business moguls from all over the globe are of course queueing up to invest.  Hasn’t this ever been so though?  As for Portsmouth, well….  This is just one of their many woes of course, and the proceeds of a cup run are just a drop in the ocean.  Some debts have been paid off, but they are still deep in trouble.  Let’s say I’m cautiously pessimistic.

There is also a familiar name in the frame – Southend United.  Having cleared their major debt with HMRC, a further winding-up petition was served over a debt of £205,000, which the club is disputing (7).  The two parties are due to meet this week, and “Mr Martin hopes to resolve the issue without the need to go to court“.  Well, he would wouldn’t he.  We shall see.

[Because of a hardware failure, I don’t currently have access to my ‘Winding Up’ file, and have compiled this from memory – apologies if I have omitted any club.  I should be able to check, and amend if necessary, on Monday.]


15 Responses to “Coming up in court, with HMRC”

  1. John Beech said


    Chester City are up for sale for £1, but you have to pay off all their debts (1). Is Stephen Vaughan hoping he will find another Ken Bates?

  2. John Beech said


    Portsmouth are reported to be in talks with a possible new owner, but categorically deny that it is Saadi Gadaffi (1). Well, it’s time for a change of ownership really, isn’t it?

    • John Beech said


      The transfer embargo has been lifted (1).

      Dare I hope the corner has been turned? It’s too early to be sure, but it’s a rare piece of good news.

  3. John Beech said


    The club website reports (1) that new investment has been found, although it is subject to ‘final due diligence’ and thence contract. HMRC are sufficiently convinced to grant a 28-day extension to their winding-up petition.

  4. Simon Cope said

    Well, we all missed this one (I think): Crystal Palace have gone into administration today with debts of £30m, and are due in court tomorrow to face a winding up order from HMRC.

    • John Beech said

      Thanks Simon. Certainly the press are quoting a winding-up petition from HMRC tomorrow, but I have been reluctant to list it as I can’t find the petition in the London Gazette. Will put up a posting tomorrow on Palace.

      • John Beech said

        The South London Press is reporting (1) that it was Agilo, an investment fund which is said to have pumped £5m into the club, which forced the Administration on the club

    • John Beech said

      HMRC v Crystal Palace

      I’ve now found the petition listed in the London Gazette (1) by searching on ‘Selhurst’. It is indeed due for hearing tomorrow.

    • Simon Cope said

      Neil Warnock’s comments from his column in today’s Independent (1):

      “I knew, like everyone else, that cash has been tight at Selhurst Park but I could not believe the news that we’d been forced into administration. The timing just astonishes me. There’s still a week to go in the transfer window and we are about to sell Victor Moses for millions. I’m devastated, shocked and hugely disappointed.”

      The timing shouldn’t astonish you Neil – the club is facing a winding up order today, so entering administration the day before is very good timing if you ask me!

  5. John Beech said


    A new statement has appeared on the club website (1), and, as might be expected, needs careful deconstructing. Apparently “Until now it has not been possible to make a definitive statement about our current position but we felt that it was now appropriate to update our shareholders and supporters.“, which might to the untrained eye suggest that this was going to be a definitive statement. It isn’t.

    Amongst all the self-congratulatory spin, some worrying issues are touched upon: unspecified assets are for sale, investment ‘commitments’ were not ‘delivered’, and the money from the season ticket sale will not be spent on strengthening the squad.

    Most worryingly, the statement concludes: “In the meantime we will continue to do the right things to give the Club the financial means to continue the progress that has already been achieved. There has been some suggestion that the position of the Chairman, Peter Ridsdale is being questioned by some supporters. For the avoidance of doubt, Peter has the full backing of both the Board and majority of shareholders and will continue to lead the Club to finish the job we started.

    An interesting couple of uses of the word ‘continue’. There are surely more appropriate phrases it could be linked to, such as ‘failing to get serious investors on board’ and ‘failing to clear the the HMRC debt’.

  6. the mole said was down for a couple of hours today, the club spokesperson was quoted as saying that this was due to them (The Club) not paying due invoices to the company who ran it.

    Back up again now but fairly astonishing when you consider what a critical link with supporters a website is.

    With the upcoming money-spinning FA Cup game being a televised sell-out, they need to get tickets sold ASAP surely. The website should in my opinion be the last thing to go.

    • John Beech said

      Very remiss! It’s not only an important ‘point of sale’, but also an income generator through its advertising, a revenue stream it is foolish to jeopardise at any time, let alone in the midst of the current cashflow problems!

  7. the mole said

    I have to ask John,

    Why (in your opinion) have the powers that be rubber stamped and approved an effective increase in Portsmouth City FC’s outgoings when they clearly cannot honour their current debts?

    This state of affairs is becoming less beleivable and even less platable by the day.


    • John Beech said

      A very interesting question Dave!

      We need to remember that the Premier League is in effect a trade association of the twenty clubs involved, so they would be reluctant to act against one of their own (although they may be finding it difficult to feel that Al Faraj is one of their own). The latest moves give Pompey a bit more freedom of action without sanctioning major cost increases, and so can be seen as support to keep the club functioning, given the sparseness of the bench, if only in the short term.

      A more cynical view would be that they expect Pompey to be demoted, Administration and nine points deduction or not, and just want the club to keep afloat until the end of the season – after that it would be a Football League problem.

      The club’s debts do seem to be reducing, and with the loss of some players in the transfer window their costs will be down, although not nearly enough. Is it possible they can stay afloat and up? I fear that is unlikely, but not impossible. The Premier League would then have to think again!

      I suspect that all will ultimately hinge on whether fresh investment materialises, and I have no insider knowledge on that score.

      In a sense, the real issue is not what is happening but what has been allowed to happen. Sadly there has been no suggestion of a major tightening-up-of the Fit and Proper Person Test, and no indication of any wish to do so.

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