Post by QPR Report on Jun 3, 2010 6:11:09 GMT
From Times Online June 3, 2010
Revenue & Customs contests creditors rule Gary Jacob
Revenue & Customs filed a writ against the Premier League and the Football League on May 18 in an attempt to overturn the creditors rule.
Under the rule, clubs coming out of administration must first settle football debts in full, while other creditors, such as Revenue, are paid later and often receive only a fraction of the sums they are owed.
Revenue has pointed to examples such as Portsmouth, where, after the club went into administration, it may be paid 16 per cent of the ÂŁ17 million it claims to be owed, while debts to other clubs and players of about ÂŁ23 million are paid in full. The counter-argument is that if football creditors are not paid in full, there could be a knock-on effect for other clubs. For example, Watford might have entered administration without a guarantee that they would be paid ÂŁ950,000 owed by Portsmouth for the transfer of Tommy Smith.
The rule was labelled “unlawful” by Revenue, which argues that there is nothing in insolvency legislation that permits the preferential status of football. “Non-football creditors are being seriously short-changed and enough is enough,” Revenue said.
The crux of the rule is that clubs — and, significantly, people with which they deal, such as Revenue or suppliers — must adhere to the League’s regulations for entry into the competition. Revenue counters that it has no choice but to trade with clubs.
Danny Davis, an insolvency expert for Mishcon de Reya, the commercial law company, said that the case could have ramifications for the transfer system. “If the Revenue succeeds, a player will have to factor in that he may not be paid in full if the club runs into problems,” Davis said. “He will ask for a higher wage and transfer fees may fall.”
Revenue was treated as a preferential creditor in insolvencies before the Enterprise Act of 2003, but lost a similar challenge in the Court of Appeal relating to Wimbledon’s exit from administration in 2004. The Premier League has said that it will robustly defend its position.
www.timesonline.co.uk/tol/sport/football/article7142953.ece
GUARDIAN/Digger
Revenue and Customs to challenge football creditors rule in high court• Premier League faces HMRC challenge to insolvency rules
• 'There is no legal basis for the football creditor rule'
(5)Matt Scott The Guardian, Thursday 3 June 2010
The controversial "football creditors" rule, which permits millionaire players to take huge sums out of insolvent clubs while smaller creditors such as St John Ambulance and local businesses are denied most of their dues, is being challenged in the high court.
Premier League officials will inform shareholder clubs at their annual meeting today that HM Revenue & Customs (HMRC) has named the Premier League as the defendant in a complaint that could change the face of football. "There is no legal basis for the football creditor rule," a spokesman for HMRC said. "Non-football creditors are being seriously short-changed and enough is enough."
The Premier League said yesterday it will "robustly defend" its position.
The taxman has grown angry at a spate of club insolvencies that have cost it tens of millions of pounds. Last month HMRC submitted a claim for more than ÂŁ35m in the Premier League's first-ever insolvency, at Portsmouth.
It is not the first time HMRC has taken action against the rule. In 2004 it pursued Wimbledon in the high court after it was given only 30p in the pound in respect of a ÂŁ525,000 debt the club had run up. Its complaint was that the football creditors rule permitted football participants, unfairly, to receive full compensation when others had to take a hit. Although it overruled HMRC's complaint, which was restricted to the narrow constraints of Wimbledon's application of the rule and not Ăł as in the current case Ăł against the rule itself, the court noted: "The power of the league to impose the obstacle and secure full payment for creditors of its choice may be objectionable and indeed the All Party Parliamentary Group in its First Inquiry Report has found it objectionable and recommended its abolition."
HMRC's subsequent appeal also failed but HMRC's determination has not dimmed.
Football will argue that removing the football-creditors rule would damage a delicate ecosystem.
The League will contend that when failed clubs are forced to honour their debts to competitor clubs it contains the problem – if not a knock-on effect could ensue, potentially causing more insolvencies. It will also argue that change would prompt more liquidations than rescues, with debtor clubs unable to secure re-election to the league, and leaving creditors such as HMRC receiving even less.
The timing of the decision is perhaps a little strange: new rules introduced last season have seen the Football League apply a transfer ban on clubs with one month's tax arrears. From next season sanctions for tax debts will also apply in the Premier League.
But when even senior player representatives privately admit they are embarrassed at a rule that protects footballers over groups such as St John Ambulance, it appears momentum has shifted.
Coaching crisis continued
Digger's revelations this week of the paucity of coaches in this country who hold the top qualifications (one for every 812 players; Spain have one for every 17) have caused a stir. This column has been inundated with messages from coaches who explain that achieving qualifications is prohibitively expensive since no subsidy is available from the authorities and that coaching is a poorly paid career once they are qualified.
One coach, who holds the Uefa A qualification – the second-highest available – said: "Can I question how many of that number are actually doing any coaching? It is over five years since I was asked to do any work on behalf of the FA and my background includes coaching at [several Premier League and top-flight clubs overseas]."
Leeds Metropolitan University sent Digger an all-sports study it delivered to an international conference last month. It concluded: "In popular sports, like football, up to adolescence age, reliance on unpaid coaches is high [85% voluntary]. There is a great shortage of adult coaches [including volunteers] as 1,113,000 adults in the UK wanted but did not receive any professional coaching in 2006." And still we wonder why our footballers cannot keep the ball.
No time for 25th Hour
The former Labour government's 25th Hour legacy campaign, aimed at getting people to give an hour a day for voluntary projects around London 2012, appears to have run out of time. A glitzy video released at the end of March to launch the ÂŁ600,000 campaign contained messages from Amir Khan, Rio Ferdinand and Austin Healey among others. In it the then secretary of state for the Olympics, Tessa Jowell, said: "We're calling on everyone in the UK to pledge their 25th hour between now and the 2012 Games." But two months on and only 13 people in the entire West Country and 29 people in all of Scotland and Wales had joined the campaign.
There are also signs that the new government does not share Jowell's enthusiasm. On the campaign's Twitter site the last entry was made on 6 April – the day the general election was called.
Bent's Tweet sorrow
Upon learning of his exclusion from England's World Cup squad on Tuesday in favour of Emile Heskey, Darren Bent, left, declared himself "gutted" through the medium of Twitter.
Whereupon a Sunderland fan by the name of TheflyinPig alighted on it to keep his hero's chin up: "Rene Higuita – GK – 68 caps, 8 goals; Jose Luis Chilavert – GK – 74 caps, 8 goals; Emile Heskey – FWD – 58 caps, 7 goals. Got to laugh." Doubtless Bent was in stitches.
www.guardian.co.uk/sport/2010/jun/03/hmrc-football-high-court
Revenue & Customs contests creditors rule Gary Jacob
Revenue & Customs filed a writ against the Premier League and the Football League on May 18 in an attempt to overturn the creditors rule.
Under the rule, clubs coming out of administration must first settle football debts in full, while other creditors, such as Revenue, are paid later and often receive only a fraction of the sums they are owed.
Revenue has pointed to examples such as Portsmouth, where, after the club went into administration, it may be paid 16 per cent of the ÂŁ17 million it claims to be owed, while debts to other clubs and players of about ÂŁ23 million are paid in full. The counter-argument is that if football creditors are not paid in full, there could be a knock-on effect for other clubs. For example, Watford might have entered administration without a guarantee that they would be paid ÂŁ950,000 owed by Portsmouth for the transfer of Tommy Smith.
The rule was labelled “unlawful” by Revenue, which argues that there is nothing in insolvency legislation that permits the preferential status of football. “Non-football creditors are being seriously short-changed and enough is enough,” Revenue said.
The crux of the rule is that clubs — and, significantly, people with which they deal, such as Revenue or suppliers — must adhere to the League’s regulations for entry into the competition. Revenue counters that it has no choice but to trade with clubs.
Danny Davis, an insolvency expert for Mishcon de Reya, the commercial law company, said that the case could have ramifications for the transfer system. “If the Revenue succeeds, a player will have to factor in that he may not be paid in full if the club runs into problems,” Davis said. “He will ask for a higher wage and transfer fees may fall.”
Revenue was treated as a preferential creditor in insolvencies before the Enterprise Act of 2003, but lost a similar challenge in the Court of Appeal relating to Wimbledon’s exit from administration in 2004. The Premier League has said that it will robustly defend its position.
www.timesonline.co.uk/tol/sport/football/article7142953.ece
GUARDIAN/Digger
Revenue and Customs to challenge football creditors rule in high court• Premier League faces HMRC challenge to insolvency rules
• 'There is no legal basis for the football creditor rule'
(5)Matt Scott The Guardian, Thursday 3 June 2010
The controversial "football creditors" rule, which permits millionaire players to take huge sums out of insolvent clubs while smaller creditors such as St John Ambulance and local businesses are denied most of their dues, is being challenged in the high court.
Premier League officials will inform shareholder clubs at their annual meeting today that HM Revenue & Customs (HMRC) has named the Premier League as the defendant in a complaint that could change the face of football. "There is no legal basis for the football creditor rule," a spokesman for HMRC said. "Non-football creditors are being seriously short-changed and enough is enough."
The Premier League said yesterday it will "robustly defend" its position.
The taxman has grown angry at a spate of club insolvencies that have cost it tens of millions of pounds. Last month HMRC submitted a claim for more than ÂŁ35m in the Premier League's first-ever insolvency, at Portsmouth.
It is not the first time HMRC has taken action against the rule. In 2004 it pursued Wimbledon in the high court after it was given only 30p in the pound in respect of a ÂŁ525,000 debt the club had run up. Its complaint was that the football creditors rule permitted football participants, unfairly, to receive full compensation when others had to take a hit. Although it overruled HMRC's complaint, which was restricted to the narrow constraints of Wimbledon's application of the rule and not Ăł as in the current case Ăł against the rule itself, the court noted: "The power of the league to impose the obstacle and secure full payment for creditors of its choice may be objectionable and indeed the All Party Parliamentary Group in its First Inquiry Report has found it objectionable and recommended its abolition."
HMRC's subsequent appeal also failed but HMRC's determination has not dimmed.
Football will argue that removing the football-creditors rule would damage a delicate ecosystem.
The League will contend that when failed clubs are forced to honour their debts to competitor clubs it contains the problem – if not a knock-on effect could ensue, potentially causing more insolvencies. It will also argue that change would prompt more liquidations than rescues, with debtor clubs unable to secure re-election to the league, and leaving creditors such as HMRC receiving even less.
The timing of the decision is perhaps a little strange: new rules introduced last season have seen the Football League apply a transfer ban on clubs with one month's tax arrears. From next season sanctions for tax debts will also apply in the Premier League.
But when even senior player representatives privately admit they are embarrassed at a rule that protects footballers over groups such as St John Ambulance, it appears momentum has shifted.
Coaching crisis continued
Digger's revelations this week of the paucity of coaches in this country who hold the top qualifications (one for every 812 players; Spain have one for every 17) have caused a stir. This column has been inundated with messages from coaches who explain that achieving qualifications is prohibitively expensive since no subsidy is available from the authorities and that coaching is a poorly paid career once they are qualified.
One coach, who holds the Uefa A qualification – the second-highest available – said: "Can I question how many of that number are actually doing any coaching? It is over five years since I was asked to do any work on behalf of the FA and my background includes coaching at [several Premier League and top-flight clubs overseas]."
Leeds Metropolitan University sent Digger an all-sports study it delivered to an international conference last month. It concluded: "In popular sports, like football, up to adolescence age, reliance on unpaid coaches is high [85% voluntary]. There is a great shortage of adult coaches [including volunteers] as 1,113,000 adults in the UK wanted but did not receive any professional coaching in 2006." And still we wonder why our footballers cannot keep the ball.
No time for 25th Hour
The former Labour government's 25th Hour legacy campaign, aimed at getting people to give an hour a day for voluntary projects around London 2012, appears to have run out of time. A glitzy video released at the end of March to launch the ÂŁ600,000 campaign contained messages from Amir Khan, Rio Ferdinand and Austin Healey among others. In it the then secretary of state for the Olympics, Tessa Jowell, said: "We're calling on everyone in the UK to pledge their 25th hour between now and the 2012 Games." But two months on and only 13 people in the entire West Country and 29 people in all of Scotland and Wales had joined the campaign.
There are also signs that the new government does not share Jowell's enthusiasm. On the campaign's Twitter site the last entry was made on 6 April – the day the general election was called.
Bent's Tweet sorrow
Upon learning of his exclusion from England's World Cup squad on Tuesday in favour of Emile Heskey, Darren Bent, left, declared himself "gutted" through the medium of Twitter.
Whereupon a Sunderland fan by the name of TheflyinPig alighted on it to keep his hero's chin up: "Rene Higuita – GK – 68 caps, 8 goals; Jose Luis Chilavert – GK – 74 caps, 8 goals; Emile Heskey – FWD – 58 caps, 7 goals. Got to laugh." Doubtless Bent was in stitches.
www.guardian.co.uk/sport/2010/jun/03/hmrc-football-high-court