Portsmouth CVA sees HMRC chase image rights payments

The latest Portsmouth company voluntary arrangement (CVA) proposal, released
today, shows HMRC increased its tax claim by approximately £18m for unpaid taxes
on image rights.

Details released in the latest proposals to creditors claim one of the main
reasons the creditors’ debt increased significantly from previous estimates was
due to HMRC increasing its claim from £17.1m to over £35.3m.

The outstanding debt to creditors increased to around £105m, from
approximately £93m.

The increased claim from HMRC is primarily due to “unpaid taxes of the image
rights of certain players”, according to the CVA document.

Under the proposals the administrators expect the club to pay back at least
£16.5m to unsecured creditors over the lifetime of the CVA. If the club is able
to re-enter the Premier League it is expected the return to creditors would
increase.

Other details include the administrators hoping to reduce player’s annual
wages from approximately £42m to £13.6m for the next season. They hope to reduce
this further for the following season from between £10m – £8m if the club does
not re-enter the Premier League.

Unsecured creditors are expected to receive approximately 20p in the pound
over the next five years.

A creditors meeting to vote on the CVA is to take place on 17 June.

Andrew Andronikou, Peter Kubik and Michael Kiely, from UHY Hacker Young, were
appointed joint administrators on 26 February 2010.

Further reading:

Portsmouth
FC heading for groundbreaking deal

Taxman
increases Pompey debts

Portsmouth
administrators win £4m boost