Generic clubs in financial crisis Thread

[Franchise FC]

Is there any way that HMRC can demand that money can be deposited to cover future PAYE payments? And what about VAT for Q3? Has this been paid? Or how about Corporation Tax for 2010/11? Just how can a football club be allowed to operate with this level of debt? It's criminal.

You need to make a taxable profit to pay corporation tax - doesn't seem terribly likely in the circumstances.

The level of debt is almost irrelevant - it's the ability to service it that matters.

Man Utd have significantly more debt but (as far as I know) don't have administration waiting round the next corner.

As in all these cases, it's a club living beyond its means.
Should be a new rule - every club that goes into administration should be expelled from the respective league and have to fight their way up ala AFC Wimbledon/Aldershot Town.

[PieEater]

I am aware that Rangers and HMRC are both attempting to win the right to appoint administrators. So why is NSML wrong?

I concur with NSML, it's Whyte who's put them into admin and HMRC will only get a percentage of the tax owed as an unsecured creditor.

The chairman could opt to pursue the legal routes of receivership or pre-pack administration to avoid paying any tax liabilities.

These routes would involve Rangers' assets being transferred to a new company or companies and the old club - formed in 1873 - being left behind with the unpayable debts. It would, almost inevitably, be wound up.

In these cases, HMRC, as an unsecured creditor, would receive very little if anything.

[PieEater]

I am aware that Rangers and HMRC are both attempting to win the right to appoint administrators. So why is NSML wrong?

I concur with NSML, it's Whyte who would gain with them into admin as HMRC will only get a percentage of the tax owed as an unsecured creditor.

The chairman could opt to pursue the legal routes of receivership or pre-pack administration to avoid paying any tax liabilities.

These routes would involve Rangers' assets being transferred to a new company or companies and the old club - formed in 1873 - being left behind with the unpayable debts. It would, almost inevitably, be wound up.

In these cases, HMRC, as an unsecured creditor, would receive very little if anything.

[exileinleeds]

NSML utterly wrong. How unusual.

Oh Louise. So are you telling me that the fact they haven't paid the bill, in other words, dodged the bill is good practice? Regardless of who instigated what, the root cause is the same; ill practice at club board level which in some eyes smells like law breaking.

No. I am saying that HMRC are attempting to have the company put into administration, because they will have a significant chance of appointing the administrator, who, regardless, will have a legal obligation to obtain the best settlement they can for ALL unsecured creditors. It appears they prefer to deal with their own nominee than with a Whyte appointee. One may infer what one will from that concerning the relationship between Whyte/Rangers and HMRC.

Please point to anywhere I have ever said that dodging bills, or tax evasion is good practice? I suspect if you read this very thread, you might find one or two examples that demonstrate my view is completely opposit. As I said, once again NSML utterly, foolishly wrong.

[Friday's Legacy]

rangers have been given until 15:30 to appoint an administrator or hmrc will be able to do so.

[Barry the bird boggler]

And who is appointing Pompey's administrators - anyone but them I hope.

[Nick Shorey my Lord!]

NSML utterly wrong. How unusual.

Oh Louise. So are you telling me that the fact they haven't paid the bill, in other words, dodged the bill is good practice? Regardless of who instigated what, the root cause is the same; ill practice at club board level which in some eyes smells like law breaking.

No. I am saying that HMRC are attempting to have the company put into administration, because they will have a significant chance of appointing the administrator, who, regardless, will have a legal obligation to obtain the best settlement they can for ALL unsecured creditors. It appears they prefer to deal with their own nominee than with a Whyte appointee. One may infer what one will from that concerning the relationship between Whyte/Rangers and HMRC.

Please point to anywhere I have ever said that dodging bills, or tax evasion is good practice? I suspect if you read this very thread, you might find one or two examples that demonstrate my view is completely opposit. As I said, once again NSML utterly, foolishly wrong.

So my point, how is it utterly wrong when in fact Mr Whyte knows full well that this agreement could well reduce the size of the bill or even remove it entirely? And Mr Whyte (as pointed out) would have known about this "debt" for years; and it has to be years to the sheer size and scale. That very fact (and it is fact) indicates that it's as much the HMRC as is Rangers instigating proceedings.

Furthermore I'd like to know why on God's earth either party thought they'd wait until now to publically address this issue. Racking up this sort of tax debt, to this size indicates to my "foolish" self (EIL - give it up) that Rangers have been feeding the HMRC a load of bollocks and / or the HMRC hasn't been strong enough to challenge this issue much, much earlier. Surely it's in their interest to get this sorted early on? It's less costly and you'd be more likely to get what's owed than go through this process where they may not end up with anything.

[exileinleeds]

And who is appointing Pompey's administrators - anyone but them I hope.

Very interesting question. AA is, I believe, currently the administrator for CSI the parent company...he is obligated to do the best for CSI creditors. Could there be a conflict of interest in also attempting to do the best for PFC (2010) Ltd?
Who has applied to put PFC into admin? If it is Portpin (Chanarai) then that will automatically disqualify him from football. (FA Law re admin twice in 7 years.)
Who will fund the administration?
Is there enough future income to realistically cover costs until the end of the season?

Who realistically can see a profit in Pompey? Without that, I can't see a way out for them.

[T.R.O.L.I.]

Re the Pompey adminstration fiasco - if it does get agreed, presumably the idea will be for them to enter into another CVA? If so, what proportion of their current debt is currently debt to HMRC? As presumably, if this is more than 25% then HMRC can block any CVA and thus Pompey would end up with a far greater penalty than -10 points (and that's if they are able to survive bankruptcy).....

[exileinleeds]

So my point, how is it utterly wrong when in fact Mr Whyte knows full well that this agreement could well reduce the size of the bill or even remove it entirely? And Mr Whyte (as pointed out) would have known about this "debt" for years; and it has to be years to the sheer size and scale. That very fact (and it is fact) indicates that it's as much the HMRC as is Rangers instigating proceedings.

Furthermore I'd like to know why on God's earth either party thought they'd wait until now to publically address this issue. Racking up this sort of tax debt, to this size indicates to my "foolish" self (EIL - give it up) that Rangers have been feeding the HMRC a load of bollocks and / or the HMRC hasn't been strong enough to challenge this issue much, much earlier. Surely it's in their interest to get this sorted early on? It's less costly and you'd be more likely to get what's owed than go through this process where they may not end up with anything.

Correct me if I am wrong- Mr Whyte believes he is right, and to this end has appointed lawyers to argue his case in court. Preparing for potentially losing the case, makes sense. Who wouldn't have a plan B?

As to the rights and wrongs of the case, and if the scheme was designed to evade rather than reduce tax liabilities- well, far far better tax experts than I are going to decide. HMRC are understandably equally aggressively arguing their case and preparing to make sure that they are in the driving seat on decisions in relation to any administration.


FTR, "Racking up this sort of tax debt" isn't difficult when HMRC routinely add 100% penalties, plus interest. I am guessing the lawyers are cheaper than the taxman.

[LUX]

has to be said, this is a good season. Rangers and Pompey (probably the most unpleasant clubs in Britain) maybe going out of business and Chelsea (the most unlikeable) having a mare.

[Friday's Legacy]

rangers have met the deadline and appointed duff and phelps as the administrators.

http://www1.skysports.com/football/news ... nistration

strathclyde police want guarentee from rangers that all costs will be met for policing of matches, otherwise they will not provide a service.

[Wax Jacket]

FTR, "Racking up this sort of tax debt" isn't difficult when HMRC routinely add 100% penalties, plus interest. I am guessing the lawyers are cheaper than the taxman.

I can't help but think that sympathy for 'the little man' (albeit a very rich one) was at the heart of the jury finding in favour of Harry Redknapp

[Nick Shorey my Lord!]

So my point, how is it utterly wrong when in fact Mr Whyte knows full well that this agreement could well reduce the size of the bill or even remove it entirely? And Mr Whyte (as pointed out) would have known about this "debt" for years; and it has to be years to the sheer size and scale. That very fact (and it is fact) indicates that it's as much the HMRC as is Rangers instigating proceedings.

Furthermore I'd like to know why on God's earth either party thought they'd wait until now to publically address this issue. Racking up this sort of tax debt, to this size indicates to my "foolish" self (EIL - give it up) that Rangers have been feeding the HMRC a load of bollocks and / or the HMRC hasn't been strong enough to challenge this issue much, much earlier. Surely it's in their interest to get this sorted early on? It's less costly and you'd be more likely to get what's owed than go through this process where they may not end up with anything.

Correct me if I am wrong- Mr Whyte believes he is right, and to this end has appointed lawyers to argue his case in court. Preparing for potentially losing the case, makes sense. Who wouldn't have a plan B?

As to the rights and wrongs of the case, and if the scheme was designed to evade rather than reduce tax liabilities- well, far far better tax experts than I are going to decide. HMRC are understandably equally aggressively arguing their case and preparing to make sure that they are in the driving seat on decisions in relation to any administration.


FTR, "Racking up this sort of tax debt" isn't difficult when HMRC routinely add 100% penalties, plus interest. I am guessing the lawyers are cheaper than the taxman.

What he believes is one thing; what is morally right is another of course. No-one would argue having a plan B isn't a sensible thing to do, but using this potential route instead of actually paying the thing in the first place which is what the majority of business' would do, is completely crazy. This clearly indicates he knew exactly what he was doing, regardless of who actually started official proceedings. You could even argue he did that since he knew it would come to this! So, once again, how was I foolish and wrong in my assessment?

This is the same guy who has been accused of fibbing his way into club ownership...

[exileinleeds]

So my point, how is it utterly wrong when in fact Mr Whyte knows full well that this agreement could well reduce the size of the bill or even remove it entirely? And Mr Whyte (as pointed out) would have known about this "debt" for years; and it has to be years to the sheer size and scale. That very fact (and it is fact) indicates that it's as much the HMRC as is Rangers instigating proceedings.

Furthermore I'd like to know why on God's earth either party thought they'd wait until now to publically address this issue. Racking up this sort of tax debt, to this size indicates to my "foolish" self (EIL - give it up) that Rangers have been feeding the HMRC a load of bollocks and / or the HMRC hasn't been strong enough to challenge this issue much, much earlier. Surely it's in their interest to get this sorted early on? It's less costly and you'd be more likely to get what's owed than go through this process where they may not end up with anything.

Correct me if I am wrong- Mr Whyte believes he is right, and to this end has appointed lawyers to argue his case in court. Preparing for potentially losing the case, makes sense. Who wouldn't have a plan B?

As to the rights and wrongs of the case, and if the scheme was designed to evade rather than reduce tax liabilities- well, far far better tax experts than I are going to decide. HMRC are understandably equally aggressively arguing their case and preparing to make sure that they are in the driving seat on decisions in relation to any administration.


FTR, "Racking up this sort of tax debt" isn't difficult when HMRC routinely add 100% penalties, plus interest. I am guessing the lawyers are cheaper than the taxman.

What he believes is one thing; what is morally right is another of course. No-one would argue having a plan B isn't a sensible thing to do, but using this potential route instead of actually paying the thing in the first place which is what the majority of business' would do, is completely crazy. This clearly indicates he knew exactly what he was doing, regardless of who actually started official proceedings. You could even argue he did that since he knew it would come to this! So, once again, how was I foolish and wrong in my assessment?

This is the same guy who has been accused of fibbing his way into club ownership...

Perhaps by assuming that what is "morally right" has any premis in law?

How many companies (still in business) do you know who would pay taxes voluntarily rather than argue the case in court. My s-i-l would certainly argue...she won a substantial case against HMRC. She is of impeccable morals. She was working for a bank/building society at the time though.

[Tony Le Mesmer]

Re the Pompey adminstration fiasco - if it does get agreed, presumably the idea will be for them to enter into another CVA? If so, what proportion of their current debt is currently debt to HMRC? As presumably, if this is more than 25% then HMRC can block any CVA and thus Pompey would end up with a far greater penalty than -10 points (and that's if they are able to survive bankruptcy).....

I didnt think you could enter into a CVA when you already have one? Or at least that would be a breach of the old CVA, which leaves them with an unlimited points deduction?

[PieEater]

It's pretty easy to rack up a massive tax bill with the wages being paid. On a £40m wage bill, over 10 years of paying 50% of wages into an offshore EBT would add up to £200m that's potentially taxable.

[Friday's Legacy]

good points raised re: rangers points deduction.

-10 points leaves them in 2nd and still in a good position for european football next season. other spl clubs feel this is unfair as if it were them it would most likely result in relegation.

how will uefa feel about that? as they apparently frown upon clubs in rangers situation.

it would be a joke if rangers were allowed to compete in europe next season and enjoy the extra income they'll receive for taking part.

[Silver Fox]

I'm fairly sure you can't play in europe if you're in administration

[Friday's Legacy]

I'm fairly sure you can't play in europe if you're in administration

they may be out of it come next season. but would qualifying for european football while in administration be allowed? it shouldn't be.