Date: 19th July 2010 at 10:12am
Written by:

Her Majesty’s Revenue and Customs has launched a savage and what looks like prolonged attack on Porstmouth Football club.

The reason is becoming increasingly clear as more details start to appear. Football clubs have a loophole which saves them millions of pounds in tax.

The taxman’s aim, according to the paper, is to reclaim more than £100 million that they claim should have been paid, when players are paid for image rights.

A tax spokesman is said to have admitted that the Government is committed to the task of ensuring that everybody pays a fair share of tax.

That people who endeavour to avoid payment will not be able to. Image rights and VAT reclaiming from fees paid to agents are the main areas of interest.

In the case against Pompey the taxman is claiming £13,293,651.72 for just this type of evasion.

Stupidly it seems that the almost unknown players involved in this are players like Tal Ben Haim,John Utaka and Lauren.

For the same period of time it is estimated that Manchester United, which is one of the biggest clubs in the world, would have a bill worth approximately £5.3 million.

United can probably claim that the £760,000 they pay Wayne Rooney every six montha is worth the expence. But how do Pompey justify £1.7 million that they are supposedly still owing Sol Cambell.

The Hong Kong based company that owns Birmingham estimate a potential bill of around £5 million. Somehow the figures for Pompey are strange to say the least, when seen to be so large.

The main suspicion is that clubs who are after a certain level of player use the image rights deals to avoid paying tax so that they can meet a players wage demands.

This to me seems a perfectly feasable argument. If this loophole is indeed found to be a way of cheating the taxman many more clubs will suddenly be pulled into the limelight as they fail to make ends meet.

The taxman will also apparantly be fighting to have VAT rebates which clubs claim on agents fees confiscated.

The taxman will also be going for the Premier League and it’s rules. The rule where all football bills have to be paid in full when all others have to agree to a percentage of the debt owed, is the biggest target.

Not before time, lots of people will say. Why should local businesses suffer and sometimes fail, because their biggest unpaid debt is owed by a football club.

Players can earn in a week, much more than most people will earn in a year. Yet if their club goes under they will be paid before the local businessman who is owed a few thousand pounds. Money that if paid would keep his small business afloat.

Pompey were being run by incompetent fools. They had a ground that can hold just over 19000 and yet paid millions to players worth less than half of what they were earning, in hidden bank accounts. All IMHO.

In June Pompey’s creditors were able to agree a CVA for the club which meant the club paying 20p in the £ for all non football debts.

This meaning that after the players and other football bills which undoubtedly will include the odd high wage earning management member, everybody gets a fifth of what is owed.

This is the part of the agreement that the taxman has the biggest problem with. I believe that this section of the rules is the bit that set the wheels turning for this push by the taxman.

Many clubs will almost certainly be forced to suffer if this does get pushed through. Me, although I feel this would be fair, I do not believe making Pompey the scapegoat to be fair.

I know that the taxman has his reasons but there has to be a certain element of fair play in their quest. Just over £1 million could see the taxman gain a poaition whereby the Pompey CVA can be blocked, I think. It may be slightly more.

This in itself would be fair if it was the normal way of doing things. It hasn’t been so I am hoping that the agreement for all bills to be treated the same way would then appease the HMRC enough to accept any new agreement.

I know that HMRC have to win the case but morally there is no argument. They have right on their side and thus, if given the rights by the court I would hope that then the taxman shows a degree of common sense.

Not something for which they are known perhaps but a genuine hope. If they win their case and are then able to block the CVA, is it possible for them to accept a revised offer which includes all debtors. The amount offered may rise a penny or two but all would be in the same boat.

The alternative is too drastic to comprehend and could mean lots of clubs instantly hitting the wall.

Pompey in their defence are not the Pompey of yesteryear. They still have a faithful band of heartbroken soldiers ready to stand behind their team.

Lots of other fans will be watching closely. Some will swear, and curse the stupid Pompey boards that have wasted millions over the last few years.

They will say that all bills should be met no matter what. Sadly that is neither the way of life nor is it going to happen.

Still more will turn and shout that Pompey have brought this upon themselves. True!!! But, and this is my personal but, nobody really knew that the World economy was about to collapse so drastically.

The main requirement now is one of speed. While this case is dragging it’s heels, the club is unable to operate fully as one would want.

The longer this is dragged on the worse the creditors could become tangled in their own tale of torment over money problems.

Win or lose time is off the essence. Now we want to see some action taking place, because the case prepared for the appeal must be ready, so let it be heard and sorted.

It is in the Governments own interests to see this is finished as quickly as is possible. Time is money, as we are always being told.


6 Replies to “HMRC After Football’s Blood”

  • Bit long winded but it does look from that as though it is the whole of football that is the real target. Pompey are just the unfortunate fall guys. Wonder how the men who did this, like Storrie, feel about the situation. The whole sorry saga sucks and my hopes lay with the fans.

  • Portsmouth’s business dealings have been atrocious, simple as that… there is no defending the disgusting way in which their owners have run things. Whether Pompey fans like it or not, their team represent everything about the Premiership, big gambles, overspending.. and doing whatever they can to not honour their debts, and therefore HMRC decided to target them. Is that bad? no, EVERYONE should pay the same tax no matter who they are, whether they are Roman Abramovich or my next door neighbour, that’s the end of it and those who don’t pay tax deserve the same punishment as everyone else. The Premier league insult every creditor they have and if HMRC want to clean things up by getting tough on every single club in the country, that is fantastic because finally these gamblers will lose their license. The image rights for Sol Campbell might be ‘excessive’, but those were the terms AGREED in the contract when they signed him, that’s down to PORTSMOUTH’s ludicrous contract offers. That’s like your boss offering a ludicrous salary and bonus… you wouldn’t say no would you? and the RECESSION? oh come on! even in the boom time they were unsustainable, its not as if they were making money pre-recession, and I also believe the recession was in place when the Gaydamaks took over! Portsmouth are corrupt and criminal (the owners anyway), and the fact that the HMRC haven’t wound up clubs sooner is a miracle. The fans suffer and that’s the bad point of all of this, but that is a necessary evil.

  • I think a lot of what you say is accurate. That I don’t think is what the taxman is doing this for. They want the privilege that football related bills have over non football related bills… . To me as well it seems ludicrous that a club can spend money on something not connected to the actual football side of things and then that is only pasid a % of what is owed…..How a small firm that gives cards and stationary or a firm that supplies food and drink is not treated the same I am at a loss to justify…..To me it appears that the Premier League knows that clubs will run into trouble and thus they have safeguarded their own people above all else..

  • SFC, HMRC wan’t to change the football creditors rule to remove this Premiership protection, because once they remove that they can start claiming for big bucks, and clubs will have to start being a little more responsible, and the idea of HMRC threatening to wind them up every month is enough reason for clubs to pay the revenue.

  • Why are clubs responsible for tax on sums paid to players? Surely this is the responsibility of the individuals concerned. If not, I want all my income tax back for the the last 24 years and the companies I worked for liable for the tax! Some thing is awry here. Don’t trust what HMRC say btw, they have a tendency to put in wild claims on people who then settle for a lower amount even if they don’t owe anything, I know this from personal experience and from others I know.

  • Lemmi the only way I can see it is that your club has but been used as the scapegoat. I think that hMRC want the clubs to stop paying players for image rights which seems an avenue clubs use to avoid tax contributions etc.

Comments are closed.