RSS feedsThe Premier League defended its preferential payments rule in an insolvency at a Business Finance and Accountancy (BFA) parliament group meeting.
Bill Bush, director of communications and public policy at the Premier League, defended the football creditor rule (FCR) at the briefing yesterday, claiming smaller clubs would suffer if it was taken away. He reminded attendees that HMRC has previously challenged the rule in court and lost.
The football creditor rule enables football creditors, such as players and other clubs, to receive payment in full ahead of preferential and unsecured creditors in the event of a club entering insolvency.
Bush said it would be "interesting" to see what happens at Portsmouth – where HMRC has legally challenged a company voluntary arrangement (CVA) deal proposed by administrators from UHY Hacker Young. The taxman said it was "unfairly predjudiced" in the voting process of the CVA.
One attendee at yesterday's briefing labeled the rule "disgraceful", while another claimed no other business would be able to "get away" with such a rule.
The BFA group concluded that if football wants to "justify" its preferential rules, it must give back to society.
The event was chaired by Iain Wright, MP for Hartlepool, who opened the discussions highlighting high debt levels, tax payment problems and financial sustainability problems in the football sector.
Deloitte's director in the sports and business group, Paul Rawnsley, said despite concerns of financial stability from football clubs, the industry increased revenues by 15% in the last season.
Deloitte was working with the UEFA on bringing financial stability to European clubs, he added.
The ICAEW is the secretariat for the BFA.
Further reading:
HMRC tackles Premier League football creditor rule
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