TaxAdministrationRevenue on losing streak

Revenue on losing streak

They say it's a funny old game - and that's just for insolvency practitioners. The profession has long struggled with football's controversial 'super-creditor' rule, under which players and others must be paid in full - even ahead of preferential creditors.

Practitioners admit the rule is strange – some say wrong – but they accept it as one of the rules of engagement.

The Inland Revenue, however, is on the warpath over what it sees as an unfair loss of public money. Its belligerent stance is most evident in recent challenges against clubs’ company voluntary arrangements (CVAs), which are attempts to exit administration that usually honour the rule.

Football directors are increasingly put in an impossible position, facing threats of expulsion from the League if they don’t pay football creditors or liquidation if they do.

So the Revenue’s recent defeat in its most high-profile challenge against a CVA to date, taking to task Wimbledon FC, has provoked great interest.

The big question is whether the case signifies the end of the taxman’s war on the super-creditor rule, or merely one battle in an ongoing conflict.

Wimbledon’s solicitor John Verrill heralded the decision as facilitating the rescue of clubs ‘at the heart of their communities’. Though the Dons could hardly be described as at their community’s heart since relocation.

Others believe the Revenue will simply open different fronts against clubs trying to pay off super creditors.

The litmus test of the ruling’s significance will be the taxman’s next move in its long-running challenge to Exeter City’s CVA.

For the Revenue, dropping the case would be an embarrassing climbdown; pursuing it leaves it open to accusations of pursuing a pointless vendetta.

The conference minnows – precisely the kind of ‘heart of the community’ team referred to by Verrill – celebrated their centenary with an unlikely tie against Brazil’s vintage 1994 side on Sunday. So far the Revenue has only said it is ‘considering its position’ in light of the Wimbledon case.

Despite playing the world cup winners, Exeter’s most dangerous opposition this summer could be the taxman.

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