Taxing times as Port Vale face court battle for survival
THE taxman is preparing to issue a winding-up petition against Port Vale FC, pushing the stricken club towards a court battle for their very future.
The Sentinel has been told that HM Revenue & Customs officials are preparing to petition the High Court over the unpaid tax bill that saw a transfer embargo imposed on the club by the Football League last week.
Unless the debt is clear by the date of the High Court hearing, the sitting judge can ...
* Put Port Vale out of business by issuing a winding-up order. In that case, the club’s assets will be sold off to pay creditors such as Stoke-on-Trent City Council;
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* Give the club more time to pay the bill;
* Appoint an administrator to run the club until a new buyer can be found, or until it is decided Vale are no longer a going concern and should be shut down.
HMRC would not comment on the petition or disclose the size of the bill, but a spokesman said: “It is only fair to those clubs and to other taxpayers who do meet their obligations that HMRC enforces payment of tax debts – and if needs be, issues a winding-up petition, or seeks to appoint an administrator.”
Once the winding-up petition has been served on Vale, a date will then be set for the hearing, which is likely to go ahead in the High Court in London.
At that time, the club’s bank accounts may be frozen, while other creditors will be able to join the proceedings.
Vale are also being sued by shirt sponsors, Harlequin Property, over an outstanding loan.
They are also in dispute with the firm which produces their match programmes and the American sponsors of last year’s pre-season tour to the United States and Canada.
A local tax expert said it was likely HMRC would prefer to see the club initially put into administration.
Phil Wood, who runs Newcastle accountancy firm Barringtons, explained: “HMRC will want the club to go into administration, because if Vale are operating as a going concern that’s the best chance of getting their money back.
“The club’s value is greater when it is trading because you can add the goodwill value of the business to the assets.
“If the club is liquidated the club is sold off in a piecemeal fashion and the HMRC wouldn’t get as much back.
“HMRC want the problem sorted, but they also don’t want a situation where Vale continue not to pay tax and the debt keeps rising.
“I think everybody would want administration, even some fans, because it may give the club semblance of a future.
“It doesn’t seem to have that at the moment.”
The Sentinel revealed yesterday that Vale’s directors had gone to the city council seeking what was described as a figure “well in excess” of £300,000 to keep the club afloat.
Just a few hours later, it emerged that the club had failed to pay player and staff wages due yesterday.
Having just made budget cuts of £24m, the city council are wary of making further financial commitments to Vale when the club are still paying back the £2.25m loan provided by the authority in 2006.
With £1.8m of that loan still outstanding, the city council are the club’s major creditor and could seek to put Vale into administration ahead of the HMRC petition.
In either scenario, it will need to be established whether the club can be kept ticking over during the administration process. If this is not possible, it is likely to be wound up.