HMRC playing tougher refereeing role

Representatives from Portsmouth, Cardiff City and Southend United are all appearing in the High Court on Wednesday to defend winding-up petitions for unpaid taxes.

Premier League outfit Pompey - who lifted the FA Cup as recently as 2008 - face the prospect of going out of business, or being forced into administration meaning a points deduction and almost certain relegation from the top flight.

David Hudson, Head of Formal Insolvency at Baker Tilly says that - with the economy still recovering from recession - HMRC is now under more pressure than ever from the Government to use an iron fist on tax collection.

“Winding-up any of these clubs would ultimately result in their extinction, player contracts will be terminated with immediate effect and they would all become free agents.

"This is the extent of the power HMRC wields over the futures of these three clubs.

“Yet HMRC is now under real pressure from Government to get heavier on its tax collection so there has been a clear tightening of its ‘time to pay’ scheme."

He adds that these events serve as a reminder to how significant a role HMRC plays in UK businesses, and the authority and power it possesses.

"What we are witnessing is how tough HMRC is becoming as a key creditor in the insolvency process.

“Although football commands high levels of media attention, let’s make no mistake in realising HMRC’s authority as a major stakeholder in a whole range of UK businesses whose unpaid tax issues have reached crisis point.”

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