Football clubs

The challenge by HMRC to the legality of the Company Voluntary Arrangement (‘CVA’) that Portsmouth City Football Club entered into was the subject of much press comment.

It shows also the impact that tax liabilities can have for a club.

HMRC argued first that the CVA gave preference to football creditors (including players) over other creditors including HMRC and second that HMRC was owed significantly more tax than the value put on its claim.

HMRC lost both arguments. The first argument (sometimes described as the ‘football creditors rule’) may well be the subject of further litigation and is not addressed below.
This article focuses on the second argument and the two areas where HMRC has recently claimed that more tax is due from football clubs: namely payments for image rights and agents’...