BusinessBusiness RecoveryHMRC v Premier League insolvency battle set for 15 February

HMRC v Premier League insolvency battle set for 15 February

HMRC and Premier League will battle in the courts over controversial insolvency rule that allows football creditors to be paid out ahead of others

A trial “window” for HMRC and the Football Association Premier League (FAPL)
to battle out insolvency rules in court has been set for 15 February,
Accountancy Age has learned.

A source close to the case said it was expected that the FAPL will attempt to
strike-out the taxman’s claim that the football creditor rule is unlawful. A
trial window allows the FAPL to submit its arguments and the court to hear both
sides of the dispute before a trial date is set.

Under the football creditor rule, when a club enters administration,
creditors such as players and managers are paid in full from the administration.
The remaining money is then divided between the unsecured creditors, including
HMRC.

A spokesman from HMRC said: “There is nothing in insolvency legislation that
provides for unsecured debts due to ‘football creditors’ to be paid in
preference to other unsecured creditors such as HMRC.

“Our view is that the practical application of the so called ‘football
creditors rule’ may be unlawful.”

The taxman filed a legal claim against the FAPL on 18 May.

Further reading:

HMRC
tackles Premier League football creditor rule

Premier
League defends preferential insolvency rule

Budget
2010: HMRC’s new powers will hit football clubs

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