Pompey Win Court Case

The High Court judge has today ruled in favour of Portsmouth FC’s Administrators in the battle to stop Pompey’s CVA proposal going ahead.

The hearing was a key part in HMRC’s ongoing vendetta against football in general.  The appeal related to certain PAYE payments that HMRC believed were still due but were not calculated in the debts of the company, these debts would have given HMRC the needed 25% vote in the CVA to reject it initially.

The payments relate to certain image rights payments to players that no PAYE or National Insurance has been paid on.  It was thought that if the judge did rule in their favour today, it would open the floodgates so to speak for HMRC to go after approximately 10 clubs, many in the Premier League, who had been paying image rights to their players in the same way.

Portsmouth will now leave Administration via the CVA and will also avoid any further punishment from the Football League.  Leaving Administration by any method other than CVA would have meant further points penalties in the new season.

It is thought that the image rights of the players has been being paid via an offshore company, thus eliminating any PAYE liability, HMRCs argument was that as the players were employed by the company, then the PAYE liability was still there.

Leeds United are amongst the other clubs reportedly doing the same thing, it is widely thought  that HMRC would have targeted Leeds first as they have already lost out on large sums in previous cases with Leeds.

Posted at 04:44PM Aug 05, 2010 by Marc Stenton in Insolvency  |  Comments[0]