Hearts face a tax tribunal alleging that the club owe HMRC £1.75m in tax dating back to 2005.
The claim dates back to the early days of Vladimir Romaov’s reign at the club when upto a dozen players came in on loan from Kaunas, the Lithuanian side owned by Romanov.
HMRC are claiming that tax on the full salaries should have been paid in the United Kingdom, rather than in Lithuania, where tax rates are lower. Hearts believe the scenario is no different to any routine loan player arrangement, when wages can be subsidised by parent clubs.
The information came to light as the Edinburgh side prepared for a share issue designed to raise £1.7m which is remarkably close to the figure being demanded by HMRC.
Hearts have had a number of problems with HMRC in recent times but have so far always been able to settle their bills.
Whether the Hearts issue has similarities with Rangers remains to be seen although on the surface this issue is purely down to the meathod of taxation rather than whether undeclared payments were made outwith those contracts lodged with the SFA and SPL.
Like Rangers Hearts promise to ‘robustly defend’ the action with a club statement saying: “Heart of Midlothian plc. are subject to a significant ongoing dispute with HM Revenue & Customs (“HMRC”) which, if it ultimately goes against the Company, could have a dramatically negative effect on the Company. Specifically, HMRC has claimed unpaid tax liabilities of circa £1.75 million (excluding interest and penalties) in relation to the arrangements between the Company and Kaunas FC in relation to certain players who were loaned to the Company by Kaunas FC.
“The Directors are attempting to robustly defend those claims but the burden of proof is on the Company and the tax will be payable unless the Company is successful in challenging the claims.”
SFA President Campbell Ogilvie switched to become Hearts Operations Director from Rangers in 2005 while retaining his place as treasurer of the SFA.
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You’ve got to hand it to Campbell, he’s a brilliant football administrator. He must be, the Daily Record told me.
Another Sevco on the horizon
That’s probably what sevco will be hoping for or trying to tell everybody through their friends in the MSM: Hearts are just as bad as us.
But I don’t think there’s any real comparison. Heart’s problem seems to be a genuine mix-up, over £1.75m, whereas sevco’s problem was deliberate, with figures up to £200m involved.
However, I’m sure we can look forward to the zombies using this situation as another smokescreen. The papers will be full of it.
why do we need to comment on other teams we need to sort out our team performances after the hammering by a useless killie team that was the worst display from a celtic team in many many years the fact is celtic need to start playing in the spl aswell as champions league we played well last week against st mirren and about 75 mins caley other than that we have been very poor this season its not good enough