Post by QPR Report on Mar 9, 2010 6:30:08 GMT
Guardian/Owen Gibson
League clubs' total outstanding debt amounts to £25m, says HMRC• Non-payment of tax 'not endemic' across the game
• Clubs will be treated like everybody else, says HMRC
Her Majesty's Revenue & Customs has called on English football to heed the warning of Portsmouth's predicament but moved to reassure fans that non-payment of tax is not "endemic" across the game.
According to senior HMRC sources, the total outstanding debt across the 92 English clubs in the top four divisions is around £25m. It is pursuing Portsmouth for about £15m in unpaid VAT and PAYE and will return to the high court next week to hear the club's response to questions over the process by which it was placed into administration.
The outstanding debt is believed to be spread across between 10 and 20 clubs. Nick Lodge, the HMRC's director of debt management and banking, said it did not treat football clubs any differently from other businesses but it had become more effective at chasing debts.
"The principles we apply to football clubs are the same principles we apply to everybody. Those principles play out a little differently depending on the particular circumstances of the case. I don't think we're applying those principles particularly differently," said Lodge.
"But I do think our general handling of debt across the board is improving and we are getting into a dialogue with people more quickly and they are much clearer about the consequences if they don't live up to their commitments to us and one or two football clubs have found themselves in that position."
This year alone, Cardiff City, Crystal Palace, Southend United and Notts County have joined Portsmouth in being petitioned by the HMRC for non-payment of tax. While declining to comment on individual cases, Lodge said a winding-up petition would only be issued as a last resort where there was a history of non-payment. "The proportion of cases where we end up in court is really small and we don't like ending up there. If this recent period causes clubs to reflect and make changes to avoid getting into difficulty, then all to the good.
"We would rather the total was nil. It's not nil but non-payment is not endemic and the amount owed is perhaps not as large as some people might generally think but of course we will carry on working to reduce it further."
Lodge reaffirmed the HMRC's opposition to the rule that insists so-called football creditors must be paid first and in full by any club in administration. "The football creditor rule isn't our rule. Like any unsecured creditor, we would not look favourably on any preference being given to other creditors where in our view that unfairly reduces payments to us. In those terms the football creditor rule is not a rule that meets with our favour."
The HMRC failed with a legal challenge to the football creditor rule in 2004 and has ever since opposed any voluntary agreement where football debts have been paid in full but a settlement offered to other creditors. Recently football authorities have become more proactive in trying to police non-payment of tax. The Football League has introduced tough new rules banning clubs from signing any new players if they are not up to date with their monthly payments.
The Premier League this month introduced rules requiring clubs to provide forward-looking financial information to prove they will be able to meet all their commitments to other clubs and the tax man over the course of the year. But Lodge said he would like to see them go further and follow the Football League model.
"The Football League did not do that because they wanted to become tax collectors. They did that because it's an issue of the relative competitiveness of clubs. They want competition. They don't want one club or another to be able to gain an unfair advantage. That's their agenda and it fits our agenda," he said.
"We've got a strong working relationship with the Football League and what they have done has been enormously beneficial. I am sure they would say the same. Would I like other football authorities to do that? Yes, but it's a matter for the football authorities."
www.guardian.co.uk/football/2010/mar/08/portsmouth-hmrc-paye-tax
League clubs' total outstanding debt amounts to £25m, says HMRC• Non-payment of tax 'not endemic' across the game
• Clubs will be treated like everybody else, says HMRC
Her Majesty's Revenue & Customs has called on English football to heed the warning of Portsmouth's predicament but moved to reassure fans that non-payment of tax is not "endemic" across the game.
According to senior HMRC sources, the total outstanding debt across the 92 English clubs in the top four divisions is around £25m. It is pursuing Portsmouth for about £15m in unpaid VAT and PAYE and will return to the high court next week to hear the club's response to questions over the process by which it was placed into administration.
The outstanding debt is believed to be spread across between 10 and 20 clubs. Nick Lodge, the HMRC's director of debt management and banking, said it did not treat football clubs any differently from other businesses but it had become more effective at chasing debts.
"The principles we apply to football clubs are the same principles we apply to everybody. Those principles play out a little differently depending on the particular circumstances of the case. I don't think we're applying those principles particularly differently," said Lodge.
"But I do think our general handling of debt across the board is improving and we are getting into a dialogue with people more quickly and they are much clearer about the consequences if they don't live up to their commitments to us and one or two football clubs have found themselves in that position."
This year alone, Cardiff City, Crystal Palace, Southend United and Notts County have joined Portsmouth in being petitioned by the HMRC for non-payment of tax. While declining to comment on individual cases, Lodge said a winding-up petition would only be issued as a last resort where there was a history of non-payment. "The proportion of cases where we end up in court is really small and we don't like ending up there. If this recent period causes clubs to reflect and make changes to avoid getting into difficulty, then all to the good.
"We would rather the total was nil. It's not nil but non-payment is not endemic and the amount owed is perhaps not as large as some people might generally think but of course we will carry on working to reduce it further."
Lodge reaffirmed the HMRC's opposition to the rule that insists so-called football creditors must be paid first and in full by any club in administration. "The football creditor rule isn't our rule. Like any unsecured creditor, we would not look favourably on any preference being given to other creditors where in our view that unfairly reduces payments to us. In those terms the football creditor rule is not a rule that meets with our favour."
The HMRC failed with a legal challenge to the football creditor rule in 2004 and has ever since opposed any voluntary agreement where football debts have been paid in full but a settlement offered to other creditors. Recently football authorities have become more proactive in trying to police non-payment of tax. The Football League has introduced tough new rules banning clubs from signing any new players if they are not up to date with their monthly payments.
The Premier League this month introduced rules requiring clubs to provide forward-looking financial information to prove they will be able to meet all their commitments to other clubs and the tax man over the course of the year. But Lodge said he would like to see them go further and follow the Football League model.
"The Football League did not do that because they wanted to become tax collectors. They did that because it's an issue of the relative competitiveness of clubs. They want competition. They don't want one club or another to be able to gain an unfair advantage. That's their agenda and it fits our agenda," he said.
"We've got a strong working relationship with the Football League and what they have done has been enormously beneficial. I am sure they would say the same. Would I like other football authorities to do that? Yes, but it's a matter for the football authorities."
www.guardian.co.uk/football/2010/mar/08/portsmouth-hmrc-paye-tax