Football - Clubs split on Budget
The new financial reporting standard on goodwill added #8m to Manchester United’s #11m pre-tax profit for the six months to 31 January.
The profits boost added #2.3m to the club’s tax bill, but this will be reduced by tax relief at its year end under a concession granted in the Budget. Whether they make a profit or loss, football clubs will be able to claim relief for the year on players signed before FRS 10 – which requires players’ fees to be capitalised and written off over the period of their contracts – came into effect on 23 December.
Manchester United’s interims released on Tuesday showed the club’s turnover increased by almost 10% to #54.5m, but transfer fees of #28.2m during the year helped to lower the pre-tax profit from #15.4m as restated for the comparable period in 1997/1998.
Leicester City, which reported its interims last week, said a #2m charge imposed by the new treatment contributed its #1m pre-tax loss for the six months to 31 January.