HMRC v. Welling United
Posted by John Beech on August 19, 2010
Welling United of the Conference South are the latest club to attract the attentions of HMRC’s legal department. Due in court on 25th August, the winding-up petition is related to a debt of £85,000 (1).
For once the ownership history of the club is very straight forward. Stuart Fuller of The Ball is Round sums it up neatly in the course of an evocative report thus:
The club were actually formed [in 1963] essentially by a Sugar Daddy. Syd Hobbins, ex-Charlton Athletic goalkeeper formed a club for his son’s Graham and Barrie who have gone on to form a true one family dynasty. Barrie Hobbins is still at the club today, fulfilling the role of Kit Manager, Head Groundsman and Club Secretary as well as being a general miserable chap, wandering around the ground as if he had all of the cares in the world.
The club climbed steadily through the Spartan League, the Athenian League and the Southern League, to enjoy over a decade in what is now the Conference National, before slipping down one level in 2000.
In October 2009 manager Andy Ford resigned, saying “I have resigned for a combination of reasons, but primarily because I do not feel that my ambition of achieving a play-off place is achievable within the constraints that are put upon this football club” (2). I’m guessing that Barrie Hobbins must have taken this to heart, as a tax bill of £85,000 does rather suggest the spending constraints had been eased.
With a certain irony, probably unintended, Hobbins suggests that the club’s present predicament is the price to be paid for failing in the play-offs last year. With refreshing honesty he admits “We had a fairly high budget under Andy Ford and we looked at the time in his first season after Christmas that we could be on our way to the play-offs. With that in mind our hearts probably ruled our heads in that we kept the budget the same when we were losing money because we didn’t want to be accused of not wanting to go up or not being ambitious. We were losing money and probably could have shut it off there and then by reducing the budget we had, something we didn’t do. In the last three months of that season we were losing money and didn’t make the play-offs. On top of that we lost our sponsors and the league lost the Setanta money, both of which cost us £15,000 for each. That’s £30,000 we’ve lost straight away and then the recession kicks in” (3). A textbook case for performance-related bonuses rather than higher basic salaries.
£30,000 of the debt has already been paid off (4), and the club hope to pay off a further £15,000 this week (5). The case will then depend on whether the club can put a viable business plan forward to convince the court that the club is sufficiently solvent to keep to any repayment schedule HMRC might agree to. On the plus side, seven players have agreed to take a wages cut (6), but worryingly the club has debts of £150,000 (it’s not clear to me if this includes the HMRC debt) and an overdraft of £15,000.
An alternative strategy would of course be the sale of the club to a new ‘sugar-daddy’. A mystery bidder is apparently in discussions with Hobbins (6), but it all seems very tentative.
One only has to think of other clubs at this level who have been in financial difficulty recently to see why Welling fans should be concerned.
UPDATE – 16 September 2010
Welling have been deducted 5 points by the Football Conference and fined £5,000, the latter thankfully being suspended (A). Barrie Hobbins accepted that Welling had given the Conference income predictions which they could not deliver.
Club response here.