BusinessCompany NewsHMRC fails to fast-track football insolvency case

HMRC fails to fast-track football insolvency case

HM Revenue & Customs has lost an appeal to fast-track its action against the Football League's controversial football creditor rule

THE TAXMAN has failed in its attempt to fast-track a legal battle against the Football League’s insolvency rule.

HM Revenue & Customs made a court request for a speedy trial against the league’s football creditor rule, which it believes is unlawful.

The rule prioritises the payment of football creditors such as players, managers and clubs over all other creditors in an administration.

The taxman wants the rule overturned before League One club Plymouth Argyle exits adminstration, so it can claim a larger slice of funds than would be possible with the rule in place.

HMRC was recently upset at receiving just 5p in the pound following the Portsmouth FC administration.

The main reason for Mr Justice David Richards’ dismissal of the request was that HMRC was unlikely to receive dividends from Plymouth even if the football creditor rule did not exist.

He was told, by lawyers for Plymouth Argyle’s administrators, that the rule was unlikely to have a significant effect in the case of Plymouth Argyle.

The club owes £4m to £5m to secured creditors and it is unlikely anything will be left to pay unsecured creditors such as HMRC following a sale.

The taxman is also taking on the Premier League over the football creditor rule in court later this year.

However, HMRC is awaiting the decision on another legal action involving Lehman Brothers that it believes could support its own action, before continuing its court battle against the Premier League.

The administrators of Plymouth Argyle have until midday today to sell the club in order to avoid further points being deducted and possible liquidation. The administrators hope to arrange a company voluntary arrangement, proposals on how to repay creditors, in two weeks.

Brendan Guilfoyle, Christopher White and John Russell, from the P&A Partnership were appointed joint administrators at Plymouth earlier this month.

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