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07 Jun 2010
The taxman is set to reject Portsmouth Football Club's plans to save itself from collapse, as it regards the troubled club's offer of 20p in the pound return to creditors as too low.
"[Portsmouth Football Club] have offered 20p in the pound to creditors, which we don't regard as an acceptable return to the taxpayer," an HMRC source told Accountancy Age.
Portsmouth is hoping to hammer out a Company Voluntary Arrangement (CVA), giving the South Coast outfit the ability to carry on as a football club - with a creditor meeting scheduled for next week.
The club needs 75%, or more, of creditors to vote in favour of the CVA for it to be approved.
Because of the amount of money owed to the taxman, the agency holds 25% of the vote.
"We are determined to achieve a decent return to the taxpayer," the source
added.
HMRC had previously changed the first draft of a CVA as it wanted the proposal
to include a liquidation in order to investigate antecedent activities.
Accountancy Age revealed earlier this month that HMRC filed a writ against the Premier League regarding its controversial "football creditors rule ".
The FCR essentially means all football creditors, including players and managers will be paid in administrations, with the money usually deducted from payments received through TV rights.
Further reading:
HMRC tackles Premier League football creditor rule
Portsmouth
CVA shakes up FC insolvency rules
Portsmouth
FC heading for groundbreaking deal
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Visitor comments Add your comment
HMRC
Good on HMRC for finally challenging this stupid situation where football creditors get 100% and everyone else takes the pain.
It's a bizarre and ridiculous rule that allows millionaire footballers to be paid, but stops lowly paid admin staff from getting more than the statutory minimum. It has to stop.
Posted by: Matt, 07 Jun 2010 | 00:00
Tax owed by Portsmouth FC
Well done HMRC. They should be tough. 20p in the £1 is totally unacceptable. Time for football to get real.
Posted by: Terry South, 08 Jun 2010 | 00:00