Half of SPL clubs are late with tax payments

HALF of the clubs in the Clydesdale Bank Premier League were late in making tax payments over the last year, a survey of club finance directors has revealed.

The study, by accountants and business advisers PKF, found clubs were continuing to control costs amid concerns over the impact of the recession. However, almost half of SPL clubs continue to operate with excessive levels of debt.

Due to an anonymity agreement, the identity of these clubs cannot be revealed by PKF, whose tenth annual football study concluded that the financial outlook for the game in Scotland remains “pessimistic”.

Clubs remain concerned about revenues falling further at a time when player costs remain static. One tactic to help with cost management is to delay making payments to HMRC.

However, Charles Barnett, head of PKF’s football industry group, has advised clubs to be alert to the more stringent climate.

HMRC no longer makes allowances for football clubs who default in making such statutory payments. “Unless [payment] delays are agreed by prior arrangement with HMRC it is likely that we will see increased enforcement action,” said Barnett.

He noted also the likelihood of interest being added to outstanding sums owed to HMRC. “We have seen what can happen,” he said.

“HMRC know that if they don’t take action then they will be the last to be paid.”

The survey found 44 per cent of clubs require personal guarantees of debt funding from shareholders and directors while the three main concerns over the current season are a potential fall in TV income, falling attendances and difficulties in attracting sponsorship.

Barnett welcomed the fact that clubs are “responding sensibly and practically to the new world order that is present in Scottish football”.

However, he did express concern that while clubs were expecting revenue to drop again throughout the season, some were still signing players on long-term contracts.

With an upturn in the economic climate not expected any time soon, Barnett stressed the need for clubs to invest in youth initiatives. “That’s the way forward,” he added.