Breaking news: HMRC to veto Portsmouth CVA

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