SPL Heart Of Midlothian Settles Tax Dispute With U.K. Tax Authority HMRC
Scottish Premier League club Heart of Midlothian revealed that it has reached an agreement with U.K. tax authority HMRC "in a dispute over tax and national insurance contributions," according to Doug Gratton of the LONDON TIMES. The £1.75M ($2.8M) dispute "was revealed in the share issue brochure as Hearts launched a scheme to raise £1.79M ($2.9M) at the end of October." Now Hearts "have come to an agreement to pay £1.5M ($2.4M) over a three-year period." The deal is separate to the settlement of a £450,000 ($724,000) bill Monday, which "staved off the threat of a winding-up order" (LONDON TIMES, 12/4).
CHEAPER SETTLEMENT: In Edinburgh, David McCann reported "the final settlement is now £250,000 ($402,000) lower than the £1.75M originally sought by HMRC -- a figure which could have risen by millions from interest and hefty fines." However, under the terms of the deal, Hearts "will pay £500,000 ($805,000) annually to the taxman over the next three years, with the first installment due in May." The club "will face no penalties and the tax tribunal, which began in November, has been concluded without any evidence being heard." The total payout for outstanding tax and National Insurance contributions "now amounts to £1.2M ($1.9M) plus interest charges of £300,000 ($483,000)." The news was also welcomed by Ernst & Young football finance expert Neil Patey, who said: "This shows how HMRC are prepared to be flexible when clubs and companies cooperate with them" (SCOTSMAN, 12/4).