Hearts have unpaid council debt totalling £55,000

The Tynecastle club owes the city nearly £55,000 for overdue business rates and rent on its McLeod Street grounds.

The debt has forced finance chiefs to call in recovery agents and agree a repayment plan with collection firm Scott & Co.

It is understood Hearts have agreed to repay the outstanding balance within five weeks.

Failure to do so could result in the club being dragged to court and forced to pay.

A city council source said: “If appropriate we [will] take steps under our debt recovery  procedures.”

The News can reveal the arrears owed to the council amounts to £18,069 in car park rent and £36,587 in  business rates, according to figures released under Freedom of Information legislation.

Today, an insider revealed how debts to the council have been accruing since the start of the financial year and relate to annual fees that must be paid upfront in full, or staggered as part of an agreed monthly plan.

“There’s always bit of leeway to arrange a payment plan and you would get around half the year before inquiries start to find where the money is,” they said.

“It works a little like council tax in that as soon as you are issued with a bill, you are effectively in debt to the council and have to agree a plan to pay it off over that financial year.”

Hearts have so far failed to pay any of the debt owed on business rates or car park rental, it is believed.

Councillor Steve Cardownie, right, a Hearts fan and deputy council leader, said: “I’m sure the council would treat Hearts as they would any business in a similar situation and act according to policy.

“Officials will take appropriate action with no influence from elected members, and nor should there be.”

Former club chairman Lord George Foulkes described the late payment of rates and rent as “bad practice”, but said Hearts’ recent on-field success would allow the club to pay the outstanding council debt.

He said: “I think this is part of a policy of leaving everything to the last minute but it’s not just Hearts that do it, many businesses do it.

“There shouldn’t be a problem with the club now given the succession of home games coming up and now the League Cup Final at Hampden.”

The latest saga comes after months of financial turmoil at Tynecastle that took the club to be brink of extinction.

Late payment of wages in September and October resulted in a 60-day transfer embargo. Hearts then admitted they were short of money to see out the season and fans rallied round to raise  £1 million in a share issue.

In November, HMRC issued a winding-up order over £450,000 of unpaid tax. Hearts later settled the PAYE and VAT bill before striking a deal to stagger payments over a separate claim for £1.5 million which stemmed from players on loan from Lithuanian side FBK Kaunas. The SPL lifted the transfer embargo this month, but the club is restricted to signing under-21s and can only to replace players who leave.

A Hearts spokesman said: “There is a payment plan that has been arranged for the remaining balance to be paid and has been agreed by both parties.”

A council spokesperson said: “We’re committed to collecting outstanding amounts. The council has been in contact with Hearts to resolve this issue.”