HMRC gives extra time to Hearts FC - update

 

Edinburgh football club Hearts feared for its survival last week after being issued with a winding-up order from HMRC for a tax bill of over £400,000. (Since this article was first written [12/11] we have updated with further information)

This weekend's match against St. Mirren could have been the team's last unless it received financial support from fans, club bosses said. 

However, fans and HMRC have both responded to the club's "emergency backing" plea by donating money and giving it extra time to get its affairs in order. 

HMRC's agreement with Hearts allows the club to repay the debt via two staged payments, with a final settlement date of December.

On their website, Hearts FC said they had provided HMRC with an assurance that tax would be paid on time in future. 

Continued...

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Comments

Football clubs and debt...    7 thanks

louisVW4 | | Permalink

As much as I love the (sometimes not so) beautiful game, I have no sympathy with clubs who amass huge debts to HMRC, whilst pandering to the extortionate wage and transfer fee demands of players who invariably fail to deliver to expectations, yet still demand to be paid. Not only that, they then collude with them in dubious tax avoidance arrangements, and think it's all ok... because they are a football club.

We then find, as with this Hearts article, the clubs going cap in hand to their loyal fans, most of whom are on low wages, and can only dream of being paid the sort of money their 'idols' receive.

Where is their sense of morality? Where is their sense?

This is a pan-European problem. Where have we heard... "If we don't pay top dollar, our top talent will go elsewhere". Well, let them try. The football world, as with banking, is a merry-go-round. There is a finite number of top clubs that players can command top dollar from. If they stop the merry-go-round, and pay players for performance, maybe some reason will enter the game. The idea that a club could be too big to fail has been debunked with the Rangers fiasco. It's high time more followed, and maybe the players and clubs will start to realise they are no different to any other business.

 The only certainties are Death and Taxes. Every SME knows the first thing you (should) do is pay HMRC, so why do football clubs believe they are somehow exempt from this reality?

BKD's picture

The bigger picture

BKD | | Permalink

HMFC clearly have to look at their own failings here, and it is hard to feel sympathetic. Nevertheless, it needs to be borne in mind that while they owe the taxman £450k, they are still owed £800k from Rangers. As you say, the whole thing is one big merry-go-round. If Hearts go under, you can be pretty sure that others will follow.

dreamcatcher's picture

I fully back HMRC here    6 thanks

dreamcatcher | | Permalink

Why should football be any different to Joe Blogs Ltd.  Its about time that HMRC wound these football clubs up once and for all.  If a client of mine had received 6 winding up orders in 3 years I would advise them to stop trading and do something else as the business is clearly not viable.

Hopefully once a few high profile clubs have gone bust this might put an end to the excesses of over paid footballers who have ruined the beautiful game over the last 10 to 15 years (speaking as an ex football fan).

HMRC

Steve192 | | Permalink

HMRC aren't taking any prisoners. I had a client who owned a taxi company which was solvent and they wouldn't wait 10 days for him to raise the money. Granted the client put his head in the sand for too long... but still! 

Football

Steve192 | | Permalink

On the football debate I have to agree with dreamcatcher. Hit the nail on the head.

stevebritgimp's picture

They are not paying over the    1 thanks

stevebritgimp | | Permalink

They are not paying over the PAYE they 'deduct' from wages.  Really they're trading insolvently.  The people who run football clubs need the book thrown at them.  Also football clubs with some fan oversight should be in a position to tell fans how many months' PAYE and VAT they haven't yet paid HMRC.  News headlines just say 'tax bill'.  These aren't surprise tax bills in the post.  They are bills like any other, and they should be budgeted for.

Chris Smail's picture

Why am I, a taxpayer, expected to subsidise soccer clubs?    1 thanks

Chris Smail | | Permalink

Just close them down.

Yeah lets...

markfd | | Permalink

...close down every business that's late paying its tax.  In fact lets go one further and introduce lots of regulations, fine people for not meeting them and then we can close them down as well when they don't pay the fine.  We can employ 50% of the staff made redundant to administer benefit payments to the other 50%.

Once we've closed down all the businesses in the UK, the economy can really start motoring.

dreamcatcher's picture

There is....    2 thanks

dreamcatcher | | Permalink

a very big difference between businesses that pay their taxes late and businesses that don't pay their taxes at all.  Businesses who are struggling with cashflow in an economic downturn should be assisted by the government by way of being allowed to pay tax late or by installments providing the business is viable and providing the tax payer is not subsidising excessive directors salaries and/or dividend payments.

The difference with football clubs is that many of them aren't viable businesses.  Even in the 'good times' many of them struggled to pay their tax bills or didn't pay them at all leaving the tax payer out of pocket, whilst at the same time paying players via EBTs or other trust arrangements to avoid further tax liabilities.  To me this is just plain wrong.

In my opinion these football clubs should be wound up sooner rather than later as HMRC is unlikely to ever recover the full amount of tax owing even if yet more time is granted, but continue to waste tax payers money on reoccuring legal fees in an attempt to collect the debt.

Perhaps if HMRC do shut a few clubs down then it would send a message to other clubs to get their house in order, which in turn may actually improve tax collection from clubs in the long term, which would benefit the economy for all of us.

stevebritgimp's picture

PAYE

stevebritgimp | | Permalink

These aren't 'their' taxes.  These are their employees' taxes.