HEARTS supporters have been warned by their club that there are “further battles ahead”, despite a £1.5 million settlement with Her Majesty’s Revenue and Customs in a dispute over tax and national insurance.
The £1.75million dispute, relating to players loaned to the club from majority shareholder Vladimir Romanov’s Lithuanian club Kaunas, emerged in a share issue brochure in October when Hearts launched a scheme to raise £1.79m.
However, the settlement reached yesterday will see Hearts pay £250,000 less than previous estimates. The club have agreed to pay £1.5m – £1.2m in tax and NIC, plus £300,000 in interest – over a three-year period. The deal is separate to the settlement of a £450,000 bill on Monday which staved off the threat of a winding-up order.
However, Tynecastle director Sergejus Fedotovas warned of more trouble if supporters don’t continue to support the share issue scheme, which runs until 19 December.
“The share issue is designed to create stability and it is important to achieve the targets we have set,” Fedotovas said on the club’s website.
“Unless these targets are hit, going forward we forecast that there will be further battles ahead when it comes to timely payment of bills. In this scenario, we will be forced again to look at what we can do with our cost base as all revenue streams are sweating at the moment and there is no reasonable expectation that we can bring significantly more revenue to the club at this moment.”
The Tynecastle club, whose defence of the Scottish Cup ended with a fourth-round loss at rivals Hibernian on Sunday, still face a £2m shortfall in revenue this season. Before last month’s match against St Mirren, Fedotovas claimed it could be the last game in Hearts’ 138-year history. Fans rallied and showed their support and Hearts hope the agreement in the tax cases has allayed immediate fears and will prompt hesitant parties to support the club.
“We would urge those supporters, and particularly those in the corporate sector, to act now if they have not done so already,” Fedotovas added. “Much work lies ahead and the window of opportunity for supporters to play their part is closing quickly. The resolution of this dispute gives us a positive nod to expect that those supporters who were wary of the immediate effect on the club of the tax case can now step forward in confidence.
“We are keeping our promise to keep this club alive and we have the results – the petition was agreed and paid, the tax case is resolved. It is good to know that we are not alone in our ambitions but we need more involvement as we are in far from good shape and the recent Scottish Cup result is the best evidence of this. Now, more than ever before, is the time for our fans everywhere to stand up and be counted.”