HMRC’s Christmas party

I’m guessing that there will be dancing in the corridors at HMRC’s office party this Christmas.  They’ve had a good run in the courts over the last month against various football clubs.  So far this run has not included a single outcome of the club going into Administration (the last case was Dundee in October; see 1).  This might suggest a shift in attitude by football clubs towards HMRC, but I’m not so optimistic.  The evidence varies considerably across the clubs involved:

• Hull City
  Hull have been skating on thin financial ice for some time now.  As the crunch match against HMRC approached, their bacon was saved by the expediency of new owners, the Allam brothers (2 ).  The £1m tax bill they are reported to have paid off needs to be seen in the context of debts of £5m to Barclays Bank and a further £7m in outstanding transfer fees (3).  A more recent report has the Allams paying a further £20m on taking over the club officially last week (4).  This is all good news for the club’s fans in the short term, with the immediate pressure off the club, but there will have to be drastic changes in the club’s business model if the haemorrhaging of money is to be stopped.

• Plymouth Argyle
  As things stand currently, the club has just started a 63-day reprieve from the winding-up petition served by HMRC over a total of £700,000 in unpaid taxes (5).   As with Hull, a major change in business model is essential, probably achievable only through new ownership.  One piece of good news is that the spinmeister, Peter Ridsdale, is now longer involved in a possible takeover bid (6 and oh so many postings passim).  Hopefully the suicidal idea of a World Cup stadium will now finally die a death (see previous posting Are we going stark stadium bonkers?).
  The current board has appointed a financial adviser to help them (7), but fans might not feel greatly relieved as his background is at Southampton.
  The winding-up petition from HMRC has been adjourned until early February, but, with the prospect of cashflow problems because of the weather (8), things are not looking good.

• Sheffield
  That’s not as in ‘Wednesday‘ or ‘United‘, but as in ‘Sheffield F.C. The Oldest Football Club In The World Est 1857 Ltd‘ as the company is known, who play in the Northern Premier League First Division South.  Trading on their (debatable) heritage hasn’t worked for them, and they were up in court against HMRC last week (9) – petition dismissed as the club had paid up.
  The club are planning a new ground (oh dear) and museum (well, maybe).  Like Plymouth they had hoped to piggy back 2018WC, but the club has a Plan B which they hope will still go ahead.  Time for a less ambitious Plan C perhaps

• Sheffield Wednesday
  Matter here seem to have resolved themselves for the short and even mid term through a takeover and bail out by Milan Mandaric (10), who has cleared the £1.1m tax debt HMRC were pursuing.
  The only worry I would have as a Wednesday supporter would be his sense of long-term commitment – this is not his strong point, as fans at St Louis Storm, FC Lika, San Jose Earthquakes, Charleroi, Nice, Portsmouth and Leicester City can attest.

• Welling United
  Welling, who play in , have been facing along term battle to pay off their debts, which had been as high as £90,000, to HMRC (11).  The club was back in court again at the beginning of this month (12), and given a further fourteen days to come up with the outstanding £60,000.
  The debt has been cleared through a very effective campaign of seeking loans (13).  This does not of course clear the debt, and the underlying financial problems are not resolved.

• Windsor & Eton
  Up in court earlier this month, the club was granted a 56-day adjournment (14).  Hopes are pinned on negotiating a CVA and a possible new owner.
  A disputed figure of £48,000 tax debt has been quoted (15), dating back over five years.  Other debts of £87,000 were reported in October (16).
  What is likely to happen next remains unclear, but a small bet on the appearance of an Arab billionaire who doesn’t actually exist might be worth a punt.  😉

Plymouth and Welling in particular have not really resolved the issue of insufficient cashflow, and must be worried by the weather forecast (see Jack Frost and the threat to club finances).

My records show that historically the incidence of a club going into Administration rises during the season to reach a small peak in November, falls back slightly, but then rises steadily from January to a high in May.  Again, perhaps time for a modest wager here.  😉

To round off by returning to the HMRC perspective, during December they were also active pursuing two clubs in Northern Ireland – Newry reached an agreement with HMRC (17), and Glentoran have until mid-January to resolve tax debts reported to be around £300,000 (18).

As we are entering the period of mandatory jollification, I thought a competition might be in order (as my Christmas motto is ‘Bah Humbug’, there will be no prizes though).  So the challenge is to suggest the most appropriate song to be played at the HMRC office party for its staff working on football club cases…