Generic clubs in financial crisis Thread

[Nick Shorey my Lord!]

Perhaps by assuming that what is "morally right" has any premis in law?

How many companies (still in business) do you know who would pay taxes voluntarily rather than argue the case in court. My s-i-l would certainly argue...she won a substantial case against HMRC. She is of impeccable morals. She was working for a bank/building society at the time though.

Ok, you need to step away from this debate.

[PieEater]

Just out of interest, does anyone know whether the HMRC court case was successful and whether this sets a precedence for them to go after other clubs, at least in Scotland.

[bobbybottler]

I'm fairly sure you can't play in europe if you're in administration

they may be out of it come next season. but would qualifying for european football while in administration be allowed? it shouldn't be.

As I understand it, you have to register (with UEFA) to play in pan-European for the following season, it's usually around the end of March for UK clubs. Registration isn't allowed for clubs in administration, so (assuming this isn't BS) Rangers have to be our of administration by the end of March 2012 to play in Europe next season. If they are, then the fact that they've been in administration during the season isn't relevant.

That's only my understanding though, happy to be shown to be wrong.

[Ian Royal]

Re the Pompey adminstration fiasco - if it does get agreed, presumably the idea will be for them to enter into another CVA? If so, what proportion of their current debt is currently debt to HMRC? As presumably, if this is more than 25% then HMRC can block any CVA and thus Pompey would end up with a far greater penalty than -10 points (and that's if they are able to survive bankruptcy).....

The only debt outside the previous CVA that I've seen reported is the £1.6/1.9M owed to HMRC. There may be new debt added to that in not paying the players etc now the bank accounts are frozen, but each new month will see the HMRC debt presumably rise by about £800k. The first CVA payment is due to be made in April, not sure how that figures into the equation.

[Mr Angry]

For Pompey, don't their parachute payments automatically go towards paying their football creditors?

If I were owed money by Pompey and was part of the original CVA, I wouldn't accept any change to the terms I originally accepted. Mind you, I'd also either refuse point blank to do business with them again, or insist on cash up front before supplying them with any services!

Due to the Pompey situation, the FA have to look again now at the whole question of clubs going into administration; do it once - fine, 10 point deduction. Do it a 2nd time within a reasonable period of time (say 10 years) 25 point deduction. Do it a 2nd time within a short space of time (say 3 years) then its out of the Football League.

As for Rangers situation, how can it be right for any company to rack up a massive tax liability, then simply go into administration, form a new company with the same owners/directors, leaving the old company (with the debts) to be wound down, so the new company starts again with zero debts.

Thats mental.

[Muguire]

For Pompey, don't their parachute payments automatically go towards paying their football creditors?

Thought so too but it seems the PL have provided £1m of their parachute payment due this summer to help ease their latest debt crisis.

As for Rangers, couldn't agree more. The SFA should show some nuts and relegate the club once, if not twice or more. But of course they need Rangers as much as Rangers needs them

[Ian Royal]

For Pompey, don't their parachute payments automatically go towards paying their football creditors?

Thought so too but it seems the PL have provided £1m of their parachute payment due this summer to help ease their latest debt crisis.

As for Rangers, couldn't agree more. The SFA should show some nuts and relegate the club once, if not twice or more. But of course they need Rangers as much as Rangers needs them

Articles I read say it was due in March, not the summer. The majority of the payments having already been made.

[Victor Meldrew]

For Pompey, don't their parachute payments automatically go towards paying their football creditors?

If I were owed money by Pompey and was part of the original CVA, I wouldn't accept any change to the terms I originally accepted. Mind you, I'd also either refuse point blank to do business with them again, or insist on cash up front before supplying them with any services!

Due to the Pompey situation, the FA have to look again now at the whole question of clubs going into administration; do it once - fine, 10 point deduction. Do it a 2nd time within a reasonable period of time (say 10 years) 25 point deduction. Do it a 2nd time within a short space of time (say 3 years) then its out of the Football League.

As for Rangers situation, how can it be right for any company to rack up a massive tax liability, then simply go into administration, form a new company with the same owners/directors, leaving the old company (with the debts) to be wound down, so the new company starts again with zero debts.

Thats mental.

Regarding your last paragraph, firms in the building industry have done this time and time again but the same fellas trade in new limited companies.
It is far from being just a football problem.

[Z175]

It's.all because governments have created lax rules to prevent scenarios where profitable businesses are lost for lack of cash flow.
Football clubs are unique because they are generally not for profit and their assets are often not realiseable. This means people will willing buy loss making ones and thus makes exits from administration more likely. Sellin g pompeys ground to Tesco is a less attractive option than finding someone willing to lose a few million.

Another example is the Rangers tax scheme. Forgive my boring post but I saw a.question above about what it is. I work in this area was once told how.it works. This was apparently peddled by accountancy firms to a lot of clubs. Including Arsenal and yep, Pompey.

Basically the players are not paid any wages, but are given interest free loans to say Andrei Arshavin Benefit Trust. Arshavin then is the trustee and the beneficiary, ie he controls the trust and its assets are his. He is free to loan arshavin the person, say, 100k a week out of the trust, and avoid income tax. However most of us can't so this, as companies can't deduct such payments of their corporation tax bill, whereas with wages they can. It therefore only works in a trading business that has no.intention of ever making profit, so just football clubs. Arsenal had to pay a lot of corporation tax to make HMRC go away.

I expect with Rangers and Pompey the tax man had to.find another way, so got his fine tooth comb out. Pompey got hit with VAT and the Gers probably made some admin error on the scheme. Oops!

[Nick Shorey my Lord!]

So they reckon there's even more dollar dollar bills y'all that Rangers owe now the administrators are in. Listening to R5 this morning they also talked about how they are mortgaged to the hilt and have already offset significant future earnings and gate receipts to support this.

[Geekins]

Pompey did a 'Pack the Park' event last night verses Ipswich to show the owners what it means to the fans. Only 14,500 turned up which hasn't gone down well. One said maybe they are just a small football league club after all... about time they realised!

[Badger Finger]

Pompey did a 'Pack the Park' event last night verses Ipswich to show the owners what it means to the fans. Only 14,500 turned up which hasn't gone down well. One said maybe they are just a small football league club after all... about time they realised!

Lolz..

[Barry the bird boggler]

Presumably they'll blame that shortfall on Ipswich not taking their full allocation.

[Barry the bird boggler]

Following the Rangers debacle, some PL clubs down here could find themselves with serious problems

http://uk.eurosport.yahoo.com/15022012/58/premier-league-paper-round-prem-clubs-rangers.html

Eight Premier League sides are in danger of going into administration as HM Revenue and Customs widen their tax probe, according to Wednesday's papers.

The Sun reports that the tax authorities have launched investigations into the clubs, which like Rangers used Employment Benefit Trusts to pay foreign players. The money is paid tax free into an overseas account, resulting in the player saving 50 per cent tax - so long as they do not draw out the money until they leave the country at the end of their contract.

HMRC have now declared war on the tax dodge, however, opening the floodgates for a number of actions similar to that being carried out at Rangers.

"Rangers may be the tip of the iceberg," football finance expert Dr Chris Brady told the paper. "EBTs became popular with clubs as a means of reducing crippling wage bills. We believe at least eight current or former Premier League clubs are being investigated."

The Daily Record carries fresh allegations about Rangers owner Craig Whyte's behaviour, alleging that £9 million of income tax collected from employees' salaries via PAYE has been kept by the club. It is this, the paper reports, that prompted HMRC's court action on Tuesday to hurry Rangers into administration.

[FiNeRaIn]

I'm fairly sure you can't play in europe if you're in administration

they may be out of it come next season. but would qualifying for european football while in administration be allowed? it shouldn't be.

lol thank god we don't have clowns like you running things. The other SPL clubs have themselves to blame if they are behind a club who just got a 10 point deduction at the end of the season. If Rangers are in administration next season and this breaches Uefa's rules...they won't be in it and the team below will. Complete non story.

[Silver Fox]

Following the Rangers debacle, some PL clubs down here could find themselves with serious problems

http://uk.eurosport.yahoo.com/15022012/58/premier-league-paper-round-prem-clubs-rangers.html

Eight Premier League sides are in danger of going into administration as HM Revenue and Customs widen their tax probe, according to Wednesday's papers.

The Sun reports that the tax authorities have launched investigations into the clubs, which like Rangers used Employment Benefit Trusts to pay foreign players. The money is paid tax free into an overseas account, resulting in the player saving 50 per cent tax - so long as they do not draw out the money until they leave the country at the end of their contract.

HMRC have now declared war on the tax dodge, however, opening the floodgates for a number of actions similar to that being carried out at Rangers.

"Rangers may be the tip of the iceberg," football finance expert Dr Chris Brady told the paper. "EBTs became popular with clubs as a means of reducing crippling wage bills. We believe at least eight current or former Premier League clubs are being investigated."

The Daily Record carries fresh allegations about Rangers owner Craig Whyte's behaviour, alleging that £9 million of income tax collected from employees' salaries via PAYE has been kept by the club. It is this, the paper reports, that prompted HMRC's court action on Tuesday to hurry Rangers into administration.

As I think I've read in Private eye HMRC have been on to this for quite some time and most clubs involved have either coughed up what they owe and/or satisfied HMRC that their deals are above board. rangers apparently did this but did it all wrong so HMRC are still on their arse

NB I may have misremembered all of the facts here

[Geekins]

Presumably they'll blame that shortfall on Ipswich not taking their full allocation.

And Valentines Day!

[Terminal Boardom]

Football Clubs have had long enough to make sure their house is in order. If it takes down up to 8 PL Clubs then sobeit. No sympathy from me. The Directors of the clubs involved should be banned from holding Directorships anywhere else for at least 10 years. Can't wait for next season's fixtures: Bristol City v Barnsley in the Prem anyone?

If only

[Magnus]

Yeh you should only be allowed to complete your existing domestic league fixtures IMHO.

And if you're not sorted by next season you forfeit your place in the league.

[Friday's Legacy]

Following the Rangers debacle, some PL clubs down here could find themselves with serious problems

http://uk.eurosport.yahoo.com/15022012/58/premier-league-paper-round-prem-clubs-rangers.html

Eight Premier League sides are in danger of going into administration as HM Revenue and Customs widen their tax probe, according to Wednesday's papers.

The Sun reports that the tax authorities have launched investigations into the clubs, which like Rangers used Employment Benefit Trusts to pay foreign players. The money is paid tax free into an overseas account, resulting in the player saving 50 per cent tax - so long as they do not draw out the money until they leave the country at the end of their contract.

HMRC have now declared war on the tax dodge, however, opening the floodgates for a number of actions similar to that being carried out at Rangers.

"Rangers may be the tip of the iceberg," football finance expert Dr Chris Brady told the paper. "EBTs became popular with clubs as a means of reducing crippling wage bills. We believe at least eight current or former Premier League clubs are being investigated."

The Daily Record carries fresh allegations about Rangers owner Craig Whyte's behaviour, alleging that £9 million of income tax collected from employees' salaries via PAYE has been kept by the club. It is this, the paper reports, that prompted HMRC's court action on Tuesday to hurry Rangers into administration.

As I think I've read in Private eye HMRC have been on to this for quite some time and most clubs involved have either coughed up what they owe and/or satisfied HMRC that their deals are above board. rangers apparently did this but did it all wrong so HMRC are still on their arse

NB I may have misremembered all of the facts here

arsenal were one and have since repaid the tax. west ham are another, but i believe that is ongoing.