BusinessBusiness RecoveryHMRC to begin Premier League court battle

HMRC to begin Premier League court battle

The taxman will meet with the Premier League tomorrow in High Court as it tries to tackle the football creditor rule

HMRC IS DUE TO FACE the Football Association Premier League (FAPL) in High Court tomorrow, over the controversial football creditor rule.

Both sides are expected to put forward their arguments in court. The Premier League is expected to ask for the case to be thrown out.

The taxman is battling to have the football creditor rule overturned as it  believes the rule – which prioritises players, managers and clubs in the event of an administration – is “unlawful”. If a football club enters administration all football creditors are paid in full. The remaining funds are then divided among remaining secured and unsecured creditors.

In the Portsmouth FC administration the taxman is likely to be paid just one fifth of an estimated £37m it is owed.

A spokesman from HMRC said last year: “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 trial window will allow both sides to put forward their arguments and will be heard by a judge. If necessary the judge will allocate time and set a trial date.

 

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