Someone really touched a nerve at HM Revenue & Customs when they started
writing about the department’s attitude to football clubs and their tax affairs.
The implication that HMRC goes easy on clubs so annoyed Mike Eland, HMRC’s
director general of enforcement and compliance, that he felt compelled to write
to the papers insisting that football clubs would be held liable for their
His letter said: “Where clubs have a debt, we expect them to clear it – even
if that takes time – and we will take action to recover the money or stop the
debt growing if a club fails to come up with sensible proposals, or fails to
stick to an arrangement.”
Something to bear in mind is that there is a bit of previous between HMRC and
football clubs and that’s all about the clash over something called the super
creditor status. Super creditors, under Football Association rules, receive
priority when it comes to a club going bust.
That means the exorbitantly paid players and managers get their hands on the
money first, the taxman comes somewhere behind.
Attempts to reorder the priority have so fair failed and so HMRC lives with
In fact the taxman has tried very hard in the past to get itself to the front
of the line, but all efforts have ended with HMRC more or less back where it
Which means, in reality, the taxman doesn’t really want clubs to go bust
because the taxpayer ends up towards the back of the queue when it comes to
And if the taxpayer is so far behind, there’s little chance of realising the
best possible return.
Even if HMRC forces clubs into administration to recover the money it has to
take a back seat to the super creditors.
So, quite simply, as Eland says, the taxman really does have to work hard on
making sure football tax debts don’t grow out of control and that the money is
recovered while the club remains a going concern.
Not such an easy task when you’re dealing with a group of people perhaps more
concerned with how much they raise to spend in the next transfer window rather
how they meet their tax liability.
After all, it’s the winning that’s important. Isn’t it?
But that doesn’t necessarily mean going soft on football clubs. This is more
like making an unpalatable compromise because of the current state of the law.
It would be a little harsh to call it a pact with the devil, though some might
see it that way.
What Eland, and the policy makers at HMRC really need is to sort out is the
super creditor rule.
But that’s a toughie. After all, politically you don’t want to be the people
that puts clubs out of business. But until the taxman does however, it will
always run the risk of looking like it’s being pushed around by the clubs.
Gavin Hinks is editor of Accountancy Age
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