HEART OF MIDLOTHIAN FC has reached a settlement with HM Revenue & Customs after a dispute over tax and national insurance contributions.
The Scottish FA Cup holders agreed to pay £1.5m over three years, and in a separate deal paid a £450,000 tax bill in two instalments in order to stave off a winding-up order.
The first dispute related to players taken on loan from Lithuanian club FC Kaunas, which is controlled by Hearts owner Vladimir Romanov.
The players from Kaunas had paid tax to the Lithuanian authorities and not to HMRC, despite working in the UK.
The Edinburgh club’s share issue brochure stated HMRC “claimed unpaid tax liabilities of circa £1.75m (excluding interest and penalties) in relation to the arrangements between the company (Hearts) and FC Kaunas in relation to certain players who were loaned to the company by FC Kaunas”.
But it announced on Tuesday that no penalties are payable under its agreement with HMRC and that the tribunal it held last month has now been concluded without any evidence being heard.
Club director Sergejus Fedotovas said: “We are satisfied that this resolution provides the club with an opportunity to now move forward with certainty. We believe that the payment terms agreed with HMRC allow the club to manage repayments in a way that will not be detrimental to longer-term development of the club.”
The final settlement figure is lower than the original amount assessed by HMRC of £1.75m, excluding interest and penalties.
CIot urges HMRC to consider a delay to the 1 September 2017 introduction of its new corporate offence of failure to prevent the criminal facilitation of tax evasion
The current business rates system is over-complex and reform is needed, but reforms should focus first of all on simplifying the appeals process, particularly for businesses which are subject to business rates exemption
The CIoT has called on the government to rethink its approach to ensuring online sellers pay the correct amount of VAT.
Jane Ellison to serve as 'tax minister' following ministerial responsibilities for public health. David Gauke become chief secretary to the Treasury