League clubs to face closer scrutiny over tax

Last updated : 11 November 2008 By Smallsy
FOOTBALL League chairman Lord Mawhinney has called on clubs to face closer scrutiny to prevent them from incurring large tax bills.

The highest power in the football league told the BBC that he was considering a plan for clubs to provide more financial information to the league in order for them to provide assistance.

Lord Mawhinney said that the full plan would be put to chairman next year.

Last week Bristol City became the latest club to announces losses with Steve Lansdown confirming that player wages and bonuses due to the club's successes had left City making losses of around £2million.

An industry source suggests that between 50 and 60 clubs in the Football League and Football Conference owed a total of £50m in tax,

"We are now looking at whether we should put in place arrangements that require clubs to give more information about their finances," Lord Mawhinney told the BBC.

At present there is no priority creditor for clubs should they get into tax trouble, although those in administration are able to use HM Revenue and Customs. If financial problems at a club ensue then players, other football clubs and other creditors get priority but the league is hoping that preventative measures mean that no club will be left with a large unpaid tax bill,

"Of course the clubs would have to vote on that," Mawhinney continued.

Luton Town owner Gary Sweet whose club owed £2.5million in tax believes that is is wrong that clubs be allowed to be run with large tax bills outstanding and he said he fully supports the move,

"I would like to know exactly what the Revenue's stance is in moving forward with football clubs and football businesses because I think that position is wholly disastrous for football.

"It is the population that is subsidising football clubs - and that's wrong, not just for the taxpayer but also wrong for the football club, which shouldn't be permitted to get into deep waters like that."