Benji Posted 23 November 2008 Posted 23 November 2008 Worse than a Student? Football clubs owe tax millionsBy Paul Grant The Donal MacIntyre Programme, BBC Radio 5 Live Football finance graphic The study involved 18 of the 42 clubs that have gone into administration More than £28m of tax money owed by struggling football clubs has been written off by HM Revenue and Customs (HMRC), a BBC investigation has found. The debt was incurred by 18 clubs which have gone into administration with unpaid tax bills in recent seasons. In one case, Leicester City settled just 10% of their £7m tax bill. Under league rules, clubs pay football-related debts such as player salaries first, but HMRC wants them to face the same tax obligations as other firms. The Football League says it will consider stricter financial controls, including asking all clubs to provide it with more information about their accounts. Since 2000, 42 professional clubs in the Football League and the lower divisions such as the Football Conference have gone into administration - some more than once. The BBC examined the tax debt in 18 cases. In total, the 18 clubs owed approximately £31.7m to the taxman, but paid back only £3.5m - meaning the public purse lost out to the tune of more than £28m. That figure would be higher if all the other clubs that have gone into administration had been included in the BBC study. 'Taxman not a priority' When a football club goes into administration, the "football creditors rule" requires all football-related debts - to players, coaching staff and other clubs - to be paid first and normally in full. HMRC is not deemed a preferential creditor and has to line up with other non-football creditors to share what is left in the pot. That means the taxman is typically paid 5-10% of what is actually owed. Finance regulations set by The Football Association and The Football League means professional football clubs have a unique way of dealing with debts. The debt to HMRC is often substantial because large player salaries mean big income tax and national insurance bills. When Luton Town went into administration in 2007 it owed £2.5m to the taxman, but paid back just £275,000. Leicester City owed £7m, but paid £700,000 and Ipswich Town had unpaid tax debts of £5m in 2003, but reached a settlement of £391,000. Leeds United went into administration in 2007 owing nearly £7m to the taxman. The Revenue and other creditors were initially offered just a penny in the pound - in contrast to former players, who were paid hundreds of thousands of pounds each to honour their contracts. HMRC challenged the offer, but are still likely to get only 10p in the pound - meaning it will have to write off more than £6m of public money. Rule changes needed Phil Willis, the MP for Harrogate and Knaresborough and a strong critic of the Leeds deal, says clubs should not be allowed to write off such huge tax debts. He said: "It is quite ludicrous that the taxpayer has to pick up the tab for what are often poor business dealings. We should get rid of the football creditors rule and all creditors should get an equal share of the money, as happens when other businesses go into administration." The Football League say the football creditors rule is necessary to prevent clubs gaining an unfair advantage over their rivals by not paying for player transfers. However, it is now looking at ways of preventing clubs running up huge tax debts in the first place. Football League chairman Lord Mawhinney told the BBC that the league is considering a plan for clubs to provide more financial information. "Trying to ensure debt to the Revenue is manageable is clearly an issue... and we are looking at regulations which will try to prevent clubs getting into this situation. Prevention is better than cure," he said. HMRC now routinely opposes any deals offered by football clubs in administration - a move seen by many within football as one designed to put pressure on the FA and Football League to change its creditors rule. HMRC is so opposed to the rule that, when the new owners of Luton Town Football Club offered to pay a £2.5m tax debt in full in order to come out of administration, the Revenue refused. '50-60 clubs in arrears' Luton Town managing director Gary Sweet told the BBC: "It's politics, it's the Treasury versus football. If we were another business I think the deal we were talking about with HMRC would have been accepted." HMRC told the BBC: "Football clubs and other employers are well aware of their responsibility to pay over any tax and National Insurance deducted from their employees' pay-packets. " Last week, a well-placed industry source with a detailed knowledge of the tax affairs of football clubs, told the BBC there are 50 to 60 clubs in either the Football League or the Football Conference who are currently in arrears to the HMRC. He said his conservative estimate was that football's current unpaid tax bill was at least £50m. FOOTBALL CLUBS IN DEBT League Tax owed Amount club is to repay Deficit Leicester City League One £7m £700k £6.3m Leeds United League One £6.8m £680k £6.1m Ipswich Town Championship £5m £391k £4.6m Bradford City League Two £2.6m £26k £2.58m Luton League Two £2.5m £275k £2.2m Wrexham Blue Square P. £1.45m £507k £943k Bournemouth League Two £1m £100k £900k Halifax Town Unibond D1N £795k £0 £795k Huddersfield League One £723k £101k £622k Cambridge U Blue Square P. £532K £101k £431k Oldham League One £520k £260k £260k Notts County League Two £487k £96k £391k AFC Wimbledon Blue Square S. £460k £0 £460k Rotherham League Two £450k £20k £430k Exeter City League Two £442k £62k £380k Darlington League Two £416k £2k £414k Lincoln City League Two £350k £143k £207k Crawley Town Blue Square P. £193k £96K £97k
jonno24 Posted 23 November 2008 Posted 23 November 2008 Rite time to look behind the sofa me thinks im sure ive got a spare 7 million somewhere
LeeCovFox Posted 23 November 2008 Posted 23 November 2008 Ok, so we owe a lot to the tax man. I have no issue with that being highlighted as it is the largest lump sum. But why cite our percentage of owed tax paid rather than other clubs on that list who have paid far less than the ten per cent that we have?
Finnegan Posted 23 November 2008 Posted 23 November 2008 I love how the article's all about Leeds and Luton and we're top of the list.
Ultra Posted 23 November 2008 Posted 23 November 2008 We shouldn't feel guilty. It wasn't the fans that fleeced the taxman. If the leagues had a proper system of regulation where clubs had to produce a certificate of compliance from HMRC before being allowed to compete, these cases would not arise.
Fez of Mahrez Posted 23 November 2008 Posted 23 November 2008 Old news where we're concerned. Drag it up in the current climate though, by all means. Wankers.
Daggers Posted 23 November 2008 Posted 23 November 2008 We shouldn't feel guilty. It wasn't the fans that fleeced the taxman.If the leagues had a proper system of regulation where clubs had to produce a certificate of compliance from HMRC before being allowed to compete, these cases would not arise. What he said.
C-man Posted 23 November 2008 Posted 23 November 2008 How ridiculous is the topic title? A missing £28m tax has nothing to do with the economic crisis, its not even a scratch on the surface!
Benji Posted 23 November 2008 Author Posted 23 November 2008 How ridiculous is the topic title? A missing £28m tax has nothing to do with the economic crisis, its not even a scratch on the surface! joke?
Corky Posted 23 November 2008 Posted 23 November 2008 We shouldn't feel guilty. It wasn't the fans that fleeced the taxman.If the leagues had a proper system of regulation where clubs had to produce a certificate of compliance from HMRC before being allowed to compete, these cases would not arise. Spot on.
Scow Posted 23 November 2008 Posted 23 November 2008 I'm surprised by the lack of rivals fans registering on here and spouting the same old ill-informed drivel we've been accustomed to over the years. Or maybe I speak to soon.
General Smuts Posted 23 November 2008 Posted 23 November 2008 I assure you that its Thatcher's fault.
act smiley Posted 23 November 2008 Posted 23 November 2008 AFC Wimbledon Blue Square S. £460k £0 £460k Someone made a hash of their research there perhaps?
purpleronnie Posted 23 November 2008 Posted 23 November 2008 Economic crisis my arse I've just transfered some money from my US bank to my UK bank and made a small fortune.
act smiley Posted 23 November 2008 Posted 23 November 2008 Surely you mean lost, considering the way the pound is going down the toilet?
Bellend Sebastian Posted 23 November 2008 Posted 23 November 2008 Surely you mean lost, considering the way the pound is going down the toilet? If he was converting Dollars into pounds, he'd be quids in, so to speak. Relatively strong dollar buys lots of weak pounds - hurray!
act smiley Posted 23 November 2008 Posted 23 November 2008 Yeah, but as its still going down its a bit premature, surely!
lcfc81 Posted 23 November 2008 Posted 23 November 2008 Quoted from article He said his conservative estimate was that football's current unpaid tax bill was at least £50m. FOOTBALL CLUBS IN DEBT League Tax owed Amount club is to repay Deficit Leicester City League One £7m £700k £6.3m Leeds United League One £6.8m £680k £6.1m Ipswich Town Championship £5m £391k £4.6m Bradford City League Two £2.6m £26k £2.58m Luton League Two £2.5m £275k £2.2m Wrexham Blue Square P. £1.45m £507k £943k Bournemouth League Two £1m £100k £900k Halifax Town Unibond D1N £795k £0 £795k Huddersfield League One £723k £101k £622k Cambridge U Blue Square P. £532K £101k £431k Oldham League One £520k £260k £260k Notts County League Two £487k £96k £391k AFC Wimbledon Blue Square S. £460k £0 £460k Rotherham League Two £450k £20k £430k Exeter City League Two £442k £62k £380k Darlington League Two £416k £2k £414k Lincoln City League Two £350k £143k £207k Crawley Town Blue Square P. £193k £96K £97k Someone should sue this guy as this is libellious As we have settled our debt it is not a debt and as his article implies it still is a debt he is bringing our good name into disrepute. W*NKER
Thracian Posted 23 November 2008 Posted 23 November 2008 Rite time to look behind the sofa me thinks im sure ive got a spare 7 million somewhere It's a bit off at a tangent but that reminds me of a small-time auctioneer who cleared a house in the West Midlands a few years back. When he arrived the best bits had gone and the job seemed barely worth doing. It worked out as three loads to the tip and one for himself. He and his oppo finished up by teatime and were just heading down the drive to the pub when he suddenly stopped. "Sod it," he said "We've been told to take the lot and I'll have the last crumb out of this - let's go get the stair carpet." Back in the house he went, up came the runner, and there underneath was a two large brown envelopes containing £6,000 in notes. From what he said the beer that night never tasted better.
The Stig Posted 23 November 2008 Posted 23 November 2008 Top of two leagues. Impressive eh. Anyway I think we can all breathe a collective sigh of relief. Some controversy. I know its not the biggest controversy we've been involved in but for a minute there I thought we were going to have a few weeks without any.
Foxes_Trust Posted 23 November 2008 Posted 23 November 2008 We will be checking the accuracy of these figures. The initial deal was 10p in the £1, therefore the 10% stated. HOWEVER The club was then promoted and a further payment was made to all creditors as part of the administration deal, so we don't see how the Inland Revenue would not have received a second payment.
carterfox90 Posted 24 November 2008 Posted 24 November 2008 I assure you that its Thatcher's fault. never did like that ben thatcher :giggle:
purpleronnie Posted 24 November 2008 Posted 24 November 2008 Yeah, but as its still going down its a bit premature, surely! I'm not going to be converting them back to dollars so I am very much quids in. I'm sure most working brits in the US will be doing the same.
The People's Hero Posted 24 November 2008 Posted 24 November 2008 No, no, no, Fez, Alex and I have put together a list. The main reason was Liv's hair, I think.
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