Hearts issue dire warning over winding-up order

 

Hearts have warned fans the club might not survive until the end of the month after being hit with a winding-up order over a tax bill of almost £450,000.

The Clydesdale Bank Premier League club issued a plea for "emergency backing" after confirming action by Her Majesty's Revenue and Customs at the Court of Session in Edinburgh.

Hearts said they were attempting to negotiate a payment plan with the tax authority over the matter, which is unrelated to a £1.75million HMRC bill the club are challenging at a tax tribunal.

But they later asked supporters to find the money to see the club through the crisis in an appeal described as "not so much a request as a necessity".

Hearts urged supporters to buy tickets for forthcoming home matches and invest in a recently-launched share issue.

The board statement added: "Without the support of fans there is, as we issue this note, a real risk that Heart of Midlothian Football Club could possibly play its last game next Saturday, 17 November, against St Mirren.

"This isn't a bluff, this isn't scaremongering, this is reality."

New SPL rules introduced in the summer would see Hearts face a more stringent punishment than the previous automatic 10-point penalty if they are forced into administration.

The rules state Hearts would be deducted a third of their previous season's tally, rounded up to the nearest whole number. Hearts finished on 52 points last season, which could mean an 18-point deduction in the coming weeks.

It was court action by HMRC that forced Rangers into administration in February.

The statement added: "Without your help now, we could be entering the final days of the club's existence.

"There are limited options for the board of directors to take to avoid the catastrophic consequences that a funding shortfall would mean for the club.

"In a footballing sense alone Hearts will suffer an immediate 17-point (sic) penalty.

"This would just be the start of a painful process that will affect every one of us and could lead to far more damaging actions that threaten the very existence of the club."

Hearts earlier said they were "endeavouring to agree a suitable payment plan with HMRC for the outstanding amount of £449,692.04" and that the petition had only recently been presented.

A club spokesperson added: "We have guaranteed future revenues from forthcoming games and related broadcast income as well as additional guaranteed transfer income which will more than cover the outstanding amount stated in this petition.

"We would therefore be hopeful that HMRC will accept that winding up the club would be totally unnecessary."

But the tone became significantly more desperate in the subsequent statement.

Hearts urged fans to buy tickets for home games against St Mirren, Celtic on November 28 and Aberdeen on December 8.

They also continued their attempts to persuade supporters to sign up for the share offer.

"There are risks, we know, and these are laid out clearly so be very sure this is right for you before committing but please at least consider it," the board said.

"Discussions on whose name is above the door, talk about how the money has been spent and debate on whether the investment in silverware has been appropriate is all natural but quite simply worthless at this moment in time.

"The only valid debate now is how can you help the club. Is the club worth less than £110?"

The board said they would continue to seek the support of parent company UBIG, Vladimir Romanov's investment group, but the club has been moving towards a self-sufficient model.

The Scottish Government pledged to help Hearts find their way through the crisis.

A spokesperson said: "The Scottish Government stands ready to assist in any way it can, including making contact with HMRC if necessary.

"It is in everyone's interests to find a solution which ensures that Hearts can continue in business while also meeting their obligations to the tax authorities."

Hearts launched a £1.79million share issue two weeks ago but the prospectus revealed another tax dispute.

HMRC has claimed unpaid tax liabilities in the region of £1.75million relating to loan agreements for a number of players who joined Hearts from Lithuanian club Kaunas, who were then run by Romanov, the Tynecastle club's majority shareholder since 2005.

Hearts claim the situation was no different to other loan agreements when parent clubs pay some or all of the wages, and will contest the bill at a tribunal this month.

The winding-up order is not the first to be issued to Hearts by HMRC.

The club announced in February they had paid an outstanding tax bill after being given eight days to pay or face being wound up.

Last year, Hearts were forced to pay a bill in the region of £500,000 to defeat a similar order, while others were served in 2009 and 2010.

The club have faced growing problems meeting wage bills in the last 12 months and are currently under an SPL transfer embargo following consecutive late monthly payments to some players and coaches.

This came despite the club reducing their wage costs significantly in the summer with the departure of a number of experienced players.

PA

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Caption competition
Caption competition
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Bleacher Report

Daily Quiz
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

Career Services

Day In a Page

In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty
Greens on the march: ‘We could be on the edge of something very big’

Greens on the march

‘We could be on the edge of something very big’
Revealed: the case against Bill Cosby - through the stories of his accusers

Revealed: the case against Bill Cosby

Through the stories of his accusers
Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

The Meaning of Mongol

Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible