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Footballs Finances and HMRC

 



MistaFozzII
First Team Regular


Feb 17, 2012, 1:25 AM

Posts: 1406
Location: Shildon, Co Durham
Team(s): Darlingto

Post #1 of 13 (2520 views)
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Footballs Finances and HMRC Can't Post or Reply Privately

Couple of questions regarding Rangers, the Taxman and Footballs Finances.

1. How does this Employee Trust work that Rangers used to pay there players, is it foreign bank accounts i.e Cayman Islands, Switzerlad or Monaco, does it simply mean players are bypassing the British Banking and Tax Systems, if so, is this what Harry Redknapp and Milan Mandaric were on trial for recently

2. Does Rangers current predicament prove the Old Firm would probably be better off playing South of the Border

3. The media is reporting about a third of English Premier League teams are in a situation similar, is the identity of these clubs been revealed at all. Is it time HMRC and Courts make an example of someone and get a club liquidated to send a message to football in general, I am thinking Rangers and Pompey as an example

4. I know financial fair play rules are about to come into the game, but would football better if a salary cap was imposed, along with a Transfer Cap, to me nobody is worth 10's of millions a year and nobody is worth 80-100 million in transfers, so would some kind of cap across the whole of football, I would personally go as far as capping nearly everything from Ticket Prices to replica kits and merchandise to wages and transfers.

Your thoughts please



Mista Fozz

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leohoenig
Administrator

Feb 17, 2012, 9:38 AM

Posts: 13548
Location: Outer Cheltenhamshire
Team(s): Cheltenham Town

Post #2 of 13 (2503 views)
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Re: [MistaFozzII] Footballs Finances and HMRC [In reply to] Can't Post or Reply Privately

1) Very complicated - see http://rangerstaxcase.com/...-tax-case-all-about/
2) Celtic and Rangers would both increase TV income by coming south of the border. Attendences and other income would be difficult to increase. Costs, particularly players wages would have to rise to compete. They would lose the guarantee that one or other of the pair appear (however briefly) in the Champions League, but they would increase the rewards for when they did (or even from the group stages of the Europa League). All in all, it is easy to make a case both ways, as no one has all the details to hand. I feel the risk of finishing mid table means the balance remains with the Scottish Leagues.
3) The taxman has got it in for the status of other football clubs as preferential in settling CVAs. This needs to be tested in court, but the Rangers case will not do so, (maybe Portsmouth). Once this hurdle is settled, football will get the same treatment as other failing companies, which means the choice between CVA and liquidation should settle on the solution that produces the most money for the creditors. Many Premier clubs (and even more Football League clubs) have underlying problems, but I do not know if any tried for the same trust as Rangers.
4) A salary cap would be sure to be circumvented. Just as Rangers were trying to divert money to avoid tax, so clubs would divert money to avoid the cap. There is no good reason why a company making profits should not divert these to the workforce anyway, (a salary cap prevents this). Fair play regulations based on balanced books is the way to go. This means a club with greater income can spend more money. the system needs to be rigorous enough to make sure those cheating to get their hands on the glittering prizes are caught, and enough teeth should be there to prevent those whose books do not balance from claiming the prizes. Still, I am not convinced that clubs should be prevented from living on the proceeds of "gifts", so long as these are "gifts" (including the purcahse of equity) and not loans. Some other form should be used to keep competition in the face of this (the word I am looking for is tax, although applying within a competition, it may be called levy).



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PaulC
Man City Transfer Target!


Feb 17, 2012, 9:47 AM

Posts: 11691
Location: Ayrshire, Midlothian
Team(s): AFC Darwen, Troon, Ayr Utd, Burnley

Post #3 of 13 (2498 views)
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Re: [MistaFozzII] Footballs Finances and HMRC [In reply to] Can't Post or Reply Privately

"2. Does Rangers current predicament prove the Old Firm would probably be better off playing South of the Border "

Indeed it does. Rangers and Celtic do not have the funds to compete for players with the Premiership (or even the Championship) because of the TV money available in England. When Rangers won the SPL last season they got £2 million TV money. Relegated Blackpool got £30 million plus £39 million for being relegated (parachute payments). It must be galling for Rangers and Celtic who pull in 50,000 spectators to be unable to compete with teams with the drawing power of Blackburn, Blackpool or even Peterborough.



buncranaboy
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Feb 17, 2012, 2:10 PM

Posts: 17968
Location: South Birmingham
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Post #4 of 13 (2468 views)
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Re: [PaulC] Footballs Finances and HMRC [In reply to] Can't Post or Reply Privately


In Reply To
"2. Does Rangers current predicament prove the Old Firm would probably be better off playing South of the Border "

Indeed it does. Rangers and Celtic do not have the funds to compete for players with the Premiership (or even the Championship) because of the TV money available in England. When Rangers won the SPL last season they got £2 million TV money. Relegated Blackpool got £30 million plus £39 million for being relegated (parachute payments). It must be galling for Rangers and Celtic who pull in 50,000 spectators to be unable to compete with teams with the drawing power of Blackburn, Blackpool or even Peterborough.



Why would they want to be competing for players with the Premiership when they haven't got the income to pay for it? Pie-in-the-sky economics or head-in-the-sand, whatever fits best. Clubs in Holland, Belgium and France could utter the same plaintive "unfair" cry but at the end of the day they play in a Different Country and being so comparatively big in that country is what makes them prominent. They'd run the risk of losing that prominence and, given their fiscal "prudence", would you trust Rangers (or Celtic, come to it) to spend any increased income in a managed way, or just use it as an excuse to further increase their spending?


PaulC
Man City Transfer Target!


Feb 17, 2012, 3:10 PM

Posts: 11691
Location: Ayrshire, Midlothian
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Re: [buncranaboy] Footballs Finances and HMRC [In reply to] Can't Post or Reply Privately

"Why would they want to be competing for players with the Premiership when they haven't got the income to pay for it?"

Erm. that's why they would be better off competing in the Premiership and having the income to do so. They already have the structure, they have the support, but they cannot compete at the moment with lesser teams in the Premiership in terms of structure and support.

For all that, Rangers' debts are small compared to several Premiership clubs


buncranaboy
Qatar World Cup bid member!


Feb 17, 2012, 6:20 PM

Posts: 17968
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Post #6 of 13 (2441 views)
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Re: [PaulC] Footballs Finances and HMRC [In reply to] Can't Post or Reply Privately


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For all that, Rangers' debts are small compared to several Premiership clubs



In terms of their income stream they're not and that's the point I was making. The way they have been run, who's to say more income wouldn't have just gone west as well by way of increased commitments on expenditure. They have been spending like an English club but on (known) Scottish levels of income. I guess they may have anticipated more revenue from the CL which hasn't been realised - parallels with Leeds in that respect. Other than that, isn't income pretty much as predicted?
The continuous bleating is rather tiresome though; they have enjoyed a dominant position in their own country for a very long time and in their own country is where they belong. Eindhoven is very close to some of the biggest German clubs but I'm sure they don't attempt to match their expenditure on their comparatively-reduced Eredivisie income.


PaulC
Man City Transfer Target!


Feb 17, 2012, 7:21 PM

Posts: 11691
Location: Ayrshire, Midlothian
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Re: [buncranaboy] Footballs Finances and HMRC [In reply to] Can't Post or Reply Privately

The question was would Rangers be better off in the (English) Premier League. The answer is "Yes". Whether they should be in the EPL or will ever be in the EPL is neither here nor there. I'm not sure where this "continual bleating" you claim to hear is coming from - perhaps you'll tell us.

As a big club in a small country, they cannot now compete with many relatively small clubs in a big country, because of the way football is funded. You mention Eindhoven in a country with a population of 16 million. What R and C would give to play in country with a TV market of 16 million. There are no other clubs in Europe which are of the size of Rangers and Celtic, in terms of support, yet play in a small country with a population of only 5 million.


VP
Man City Transfer Target!


Feb 17, 2012, 7:35 PM

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Post #8 of 13 (2432 views)
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Re: [MistaFozzII] Footballs Finances and HMRC [In reply to] Can't Post or Reply Privately


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3. The media is reporting about a third of English Premier League teams are in a situation similar, is the identity of these clubs been revealed at all.


HMRC will no longer publicly reveal which clubs owe them money. SportingIntelligence have put in requests under the FOI act but these days HMRC will only give out info based on whole leagues. (This was the position in November anyway).

In June 2011 it was reported "The Premier League’s clubs have cleared their entire backlog of tax debts to Her Majesty’s Revenue & Customs (HMRC)"

"At the end of the last tax year (April 2010), as this website previously reported, the Premier League collectively owed £14.4m in PAYE, National Insurance contributions and VAT. That figure rose to £27.4m a few months later as the full scale of Portsmouth’s tax liabilities were uncovered by HMRC."

"A Freedom of Information enquiry by sportingintelligence shows the Premier League is the only one of the UK’s 14 senior leagues to have no tax outstanding at the end of the 2011 tax year."

http://www.sportingintelligence.com/...report-looms-160602/


(This post was edited by VP on Feb 17, 2012, 7:35 PM)


VP
Man City Transfer Target!


Feb 17, 2012, 7:52 PM

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Post #9 of 13 (2427 views)
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Re: [leohoenig] Footballs Finances and HMRC [In reply to] Can't Post or Reply Privately


In Reply To
3) The taxman has got it in for the status of other football clubs as preferential in settling CVAs. This needs to be tested in court, but the Rangers case will not do so, (maybe Portsmouth).


This issue is currently going through the High Court. The case was heard in December with the outcome due, well, any day now.

http://www.insolvencynews.com/...-set-for-spring-2012


mick
Chelsea Transfer Target

Feb 17, 2012, 9:43 PM

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Post #10 of 13 (2403 views)
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Re: [VP] Footballs Finances and HMRC [In reply to] Can't Post or Reply Privately


In Reply To

In Reply To


"A Freedom of Information enquiry by sportingintelligence shows the Premier League is the only one of the UK’s 14 senior leagues to have no tax outstanding at the end of the 2011 tax year."


Where do they get 14 from ?


leohoenig
Administrator

Feb 18, 2012, 12:13 AM

Posts: 13548
Location: Outer Cheltenhamshire
Team(s): Cheltenham Town

Post #11 of 13 (2384 views)
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Re: [mick] Footballs Finances and HMRC [In reply to] Can't Post or Reply Privately

The 14 divisions mentioned are EPL, Football League (3), Conference (3), Scottish (4), Welsh (1) and Ireland (2)

The figures shown are amazingly small, and and given the news this week with Rangers and Portsmouth, clearly inaccurate. Here lies the biggest problem. HMRC expect you to tell them (accurately) how much you owe them



Fat AND Pompous.
The proof that you can have too much of a good thing
Now blogging at http://www.leohoenig.com



VP
Man City Transfer Target!


Feb 18, 2012, 12:21 AM

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Post #12 of 13 (2381 views)
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Re: [leohoenig] Footballs Finances and HMRC [In reply to] Can't Post or Reply Privately


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The figures shown are amazingly small, and and given the news this week with Rangers and Portsmouth, clearly inaccurate. Here lies the biggest problem. HMRC expect you to tell them (accurately) how much you owe them


It's all in the small print Leo.

HMRC also points out that the debts are a snapshot taken on a single day and expects that football’s current tax debts of £900,000 to rise over the course of the year. The latest FOI figure does not include debts liabilities of clubs that cannot pay the full sum up front and have agreed a payment plan spread over a period of time.

In a note with the FOI, HMRC said: “Extreme care should be taken not to attribute the level of debt shown in the accompanying figures to a resolution of the bulk of football debts owed to HMRC.”


**edit**
I've just re-read a piece from November on that website and have to correct what I said earlier. HMRC won't give out any figures at all now. There was another FOI request in October that was turned down.

an HMRC spokesperson said: “Whilst I appreciate that HMRC has, in the past, provided information to answer similar enquiries, following a review of our treatment of such requests we are no longer able to do so.
I must therefore advise that HMRC neither confirms nor denies it holds the information because saying so would necessarily tell you something about this person or persons. Such information, if held, would be held for HMRC’s function to assess and collect.”


The HMRC rejection came after a review of government guidance on FOIs, which suggested that the previous responses to Sportingintelligence requests for information on tax debts came too close to identifying individual clubs.

The details about tax and football that HMRC now declines to answer:

The amount of direct & indirect tax owed by the clubs in the Premier League, the three divisions of the Football League & the three divisions of the Conference (Blue Square Premier, Blue Square North & Blue Square South) & the Welsh Premier League.
How much direct & indirect tax is owed by the clubs in the Scottish Premier League & the three divisions of the Scottish Football League & the Carling Premiership in Northern Ireland.
The most up-to-date figure for each of these competitions.
The amount of tax owed by clubs in payment settlements that have been agreed (but not yet publicised) to resolve long-term debts with HMRC.


http://www.sportingintelligence.com/...9-case-looms-141101/


(This post was edited by VP on Feb 18, 2012, 12:40 AM)


MistaFozzII
First Team Regular


Feb 20, 2012, 8:12 AM

Posts: 1406
Location: Shildon, Co Durham
Team(s): Darlingto

Post #13 of 13 (2301 views)
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Re: [leohoenig] Footballs Finances and HMRC [In reply to] Can't Post or Reply Privately


In Reply To
The 14 divisions mentioned are EPL, Football League (3), Conference (3), Scottish (4), Welsh (1) and Ireland (2)

The figures shown are amazingly small, and and given the news this week with Rangers and Portsmouth, clearly inaccurate. Here lies the biggest problem. HMRC expect you to tell them (accurately) how much you owe them


Should it not be them telling you(accurately) how much is owed in tax, just a thought



Mista Fozz

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