RUFC - Clubs to face financial scrutiny?
League Chairman, Lord Mawhinney has told the BBC that the league are contemplating a plan for clubs to give them more information about their finances and would be put to the Chairman of each club next year.
The BBC have found out that between fifty and sixty League and Conference clubs owed a total of fifty million in tax and Lord Mawhinney said, 'We are looking at whether we should put in place arrangements that require clubs to give more information about their finances.'
As we found out when the Millers went into administration, the biggest creditor at a football club is often the HM Revenue and Customs. But, under both Football League and Football Association rules other creditors in the game, such as the players, get priority. Several Chairman admitted to the BBC that clubs running up huge tax debts were effectively being bankrolled by HMRC.
Gary Sweet, owner of Luton Town, whose club owed £2.5m in taxes said that the HMRC were wrong to allow the debt to spiral to such levels. 'I would like to know exactly what the Revenue's stance is on moving forward with football clubs and football businesses because I think that position is wholly disastrous for football,' he said.
HMRC said that they are sympathetic to to businesses experiencing cash flow difficulties but with the vast majority of businesses paying their tax on time then they owe it to these people to ensure that those who pay late do so only when they have good reason.
Lord Mawhinney says that the Football League are considering proposals to get more finacial information from clubs and to stop clubs from building up large unpaid tax bills but said the clubs would have to vote on it. 'As a former health minister,' he said, 'I believe that prevention is better than cure.'
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