Portsmouth fail with tax appeal

LONDON - Troubled Portsmouth moved a step closer towards becoming the first Premier League club to enter administration when their appeal against a winding up order was dismissed by a High Court judge on Tuesday.

Portsmouth, owned by Saudi businessman Ali al Faraj, argued that the Value Added Tax (VAT) portion of its outstanding tax bill was too high by 7.5 million pounds.

A spokesperson for the Judicial Communications Office said: "At the High Court today Mr Justice Newey dismissed an application from Portsmouth Football Club Limited for a winding up petition to be struck out.

"A further hearing to consider HMRC's winding up petition will take place in due course."

That hearing has been scheduled for February 10 when Portsmouth could become the first Premier League club to file for administration.

The winding up order was issued by the Government's Revenue and Customs tax office.

However, in a statement, the club's solicitors Neumans LLP pointed out that despite his ruling, the judge commented that he found the issues in the case "difficult" and granted the club permission for appeal.

Neumans said that this meant the judge considered any appeal to the Court of Appeal would have "a real prospect of success."

Neumans added that if the appeal were to succeed "this would result in the judge's ruling being reversed and HMRC's petition being struck out, without the petition proceeding to a final hearing."

Portsmouth have seven days to lodge an appeal, but the decision comes as another blow for the club who have had a miserable season on and off the pitch.

Currently bottom of the Premier League, they have been banned from any transfer activity, have three times failed to pay their players on time, and last week the Premier League awarded 7.0 million pounds of their television revenue payments to other clubs who were still owed transfer fees by Portsmouth.

In turn the club have threatened arbitration proceedings against the Premier League, demanding the transfer embargo should be lifted.