EFL’S TAX WAR
HMRC demand huge sums from struggling clubs
Football league clubs are locked in a battle with HMRC over tax demands for up to hundreds of thousands of pounds that could leave them struggling to pay players next month.
Sportsmail has learned that, having granted clubs a four-month payment holiday from Vat and PaYE at the start of lockdown, the Government are now demanding that the unpaid bills are settled in one lump sum.
this adds to the clubs’ financial problems at a time when they remain without gate receipts and have yet to receive a bailout from the Premier league. the Revenue are understood to be refusing to negotiate a collective agreement with the EFl and are instead picking off clubs individually, demanding the unpaid tax which covers the period from March to June.
the sums involved vary from a few thousand pounds at the smaller clubs up to several hundred thousand pounds in the Championship, but given clubs are operating with minimal income in the absence of match-going fans, the tax bills could still have a major impact on their ability to keep trading over the next few months. the EFl have attempted to help by relaxing their own regulations which state that any club with outstanding tax bills will be given a transfer embargo.
as a result, the EFl deadline for clubs to have paid their tax without incurring sanctions has been extended from the start of the month until october 15, by which point it is hoped they will have received some financial assistance from the Premier league. the EFl are confident all of their clubs will be able to start the season this weekend after all 72 made pay-roll last month, but there are concerns about the ability of some to pay players from next month, when most of the funds they have been advanced will have been used.
Many of the clubs are effectively living off borrowed money — the £77m solidarity money advanced by the Premier league and £30m of Sky Sports tV rights that has been paid early by the EFl — which will leave them with major holes in their finances later in the season. the EFl are seeking a £250m aid package from the Premier league payable over the next four years, but no agreement has been forthcoming so they are considering other options including a commercial loan, as revealed by Sportsmail last month.
the clubs lost a combined £50m through missing gate receipts after lockdown and a further loss of £200m is expected if significant crowds are kept away this season.