Revenue and Customs let rip as football falls apart « Untold Arsenal: Arsenal News. Supporting the Lord Wenger in all he does

The news has just emerged that the Revenue is having a battle with Manchester United over the issue of who pays tax on image rights.  The offer document for the new bond mentions that there might be a legal case over the matter.

It also seem that Man U have difficulty in remembering their own stories.  They had said previously that they could grow because of their rising marketing.  But now they are congratulating themselves on doubling prices over the Glazer years.  And still, no matter how many spins they put on it, most financial analysts seem to find it hard to work out how they can get out of the mire.

As things stand the Revenue might be a minor issue for Man U, not because it is, but because of the size of their other issues.  But this is not the case elsewhere.   Man U’s is just one of a series of cases in which the Revenue is having a bash at football clubs.

The most famous I guess is Portsmouth where they are challenging the previous owner, the previous manager and Peter Storrie whose job title I have currently forgotten.  Court cases start soon.

The Supporters Direct group who particularly have an interest in some of the smaller clubs have noted in a recent email on their news group that Kings Lynn have gone, following a taxman attack, while Rochdale only survived at the last minute, as did Accrington Stanley.  Notts County and Cardiff City are now being threatened.

At the heart of the Revenue’s annoyance with football is the issue of clubs having to pay “football debts” in full if they run into trouble, before they pay off anyone else.   Much was made of this when Leeds United went bust, and paid the likes of St John’s Ambulance and everyone else outside football just 10% or so of everything that was owed.

Deals like that mean that the taxman gets only 10% of what is owed while footballers get their full whack.  So if the Revenue can move on its own before the whole club comes tumbling down, they might manage either by negotiation or through a court order, to get their money in full.

It is possible that the Revenue might even challenge the validity of “football debts first” rule in court.  There is no legal basis for it, and I guess it might be possible for it to be ruled illegal.  That would give football a problem, because it would allow clubs to buy lots of players, go bust, and then only pay 10% of the cost.   Man U might fancy that.

What’s interesting is that there is often something decidedly odd around the clubs that are seriously challenged by the Revenue.  Notts County are a case in point – buying the club for zero, promising the earth, then nothing being as it seemed, then selling the whole thing for £1 with no one knowing who owned the club, and endless oddities involving North Korea of all places.

The only person who comes out of Notts County with any integrity is Sol Campbell who went in, looked, and realised it was all a con, and walked out.  Of course the papers won’t ever give him is due – not least because he was infinitely more intelligent about the affair than they were.  But it would be nice if just one of those sniggering Radio 5 journalists had the decency to apologise.

Another factor in common is the incredulity expressed by everyone who is challenged by the Revenue in football cases.   It is as if they can’t believe what’s going on, and that of course there is nothing wrong.   Maybe the Revenue is run by a bunch of dodos but in the cases they have featured in thus far, this does not look like the case.

The questions we always want answered are:

• Do you owe the taxman anything?
• If yes, why haven’t you paid?
• If no, have you been talking to them about anything recently?

But it is not just tax in this murky world.  As we saw with Notts C ownership can be a difficult business.  We might worry about one of our owners hitting the 30% button and trying a takeover, but if that happened at least we would know who it was.

Notts C have never really found out who owned Qadbak, the firm that promised them the EPL.   As the Guardian has reminded us Qadbak was described by Rothschilds as “a wholly reputable organisation”.  We might giggle a bit now, but we could be giggling even more now we find the same organisation is representing West Ham.

According to the Guardian it was the same Rothschilds that provided the Glazers with the funds to make their purchase of Manchester United.

Now the main American bidder for WHU has gone away, they are left with the ex-owners of Birmingham who don’t seem to want to put up that much money. All a bit sticky three stops from Barking, especially as they have just been found guilty of letting their fans run on the pitch.

What I wonder there is, how could they ever raise a defence?   Millwall fans might sometimes be a bit beyond the pale, but they didn’t go on the pitch.  Only WHU fans did.

So how did the case go?

Judge: You are charged with allowing your fans to go on the pitch.  How do you plead?

WHU: Not guilty

Judge: On the TV footage your fans can be seen on the pitch.  So I ask you did your fans go on the pitch?

WHU: Yes

Judge: Then how can you plead not guilty to the charge of allowing your fans to run on the pitch?

WHU: I’m forever blowing bubbles.

What then of Liverpool? The Liverpool semi-owner (Hicks the elder) said (according to our old friend A Journalist (hic):  “Our debt is very managable and we never use player sales for debt service. Our interest on £200m is about £16m. The new stadium will be the game changer. Christian Purslow is working very hard on it. January is a poor-quality market. The summer window will be big.”

Mr Purslow is the MD and his actual job seems to be searching for new investors – just as Man U are doing the same.  Paying off the banks, paying off some of the semi-owners own debt, buying players and building a stadium seems quite a lot to ask – but they say that they can do it.

It’s a funny old world.

(c) Sir Tony Attwood (my thanks to readers who nominated me for the knighthood, which I accept with deep humility.

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