Administration looms but MP finally gets Pompey and HMRC talking
114431_POMPEY_SAINTS_18/12/11 Portsmouth FC V Southampton FC at Fratton Park in NPower Championship 2011/12. Picture: Allan Hutchings (114431-461)
TODAY Pompey bosses were due finally get a chance to speak directly to the taxman.
As fears grew that the club was about to enter administration for the second time in two years, HMRC agreed to get back around the negotiating table with the club.
Their decision is the result of an intervention by Portsmouth North MP Penny Mordaunt, who has been meeting Treasury ministers to try and set up a dialogue.
David Lampitt and other representatives from Portsmouth FC were set to take part in a conference call with the taxman this morning at 10.30am, in which they were expected to ask for more time to pay Pompey’s tax bill.
At the request of the club Ms Mordaunt was also due to take part in negotiations in the hope of arriving at a compromise which suits both sides.
It comes after a winding-up petition was issued by HMRC at the beginning of January which led to Pompey’s bank accounts being frozen, leaving them unable to pay players and staff.
This was after they missed two tax payments totalling £800,000 each for December and January. The club awaits a hearing on February 20 in the High Court to determine its fate.
But if the club goes into administration the winding-up petition will be stopped, giving HMRC less chance of recovering its money – see Q&A panel on the right.
Ms Mordaunt said it was time for the taxman to be pragmatic and realise that keeping Pompey afloat was in everybody’s interest.
She said: ‘I totally understand HMRC’s remit, I just want us to be practical about this. Of course there is a plan B and even plan C but let’s look at the timetable and see what is possible.
‘HMRC has to be repaid, but we can sort it out together.
‘What we can’t have is people not talking to each other because they don’t think they should or they have already decided what should happen.
‘It is encouraging that we have got them talking. I think my role in this is to facilitate conversations that are going to end up with a happy outcome.’
The MP’s calls were boosted by David Cameron during Prime Minister’s Questions last week, who said he would look to arrange a meeting between the two parties, adding ‘we must do everything we can’ to ensure Pompey survives’.
Ms Mordaunt added: ‘The situation is loads better than two weeks ago when there didn’t seem to be any possibility of them talking.
‘This is a very positive development. I have no doubt the club will survive. It could be sold, and we could buy more time with HMRC to get the club’s finances in order.
‘People are working so hard to make sure that we have got all bases covered and we are ready to do whatever is necessary to secure the club’s survival.’
Portsmouth South MP Mike Hancock agreed that the taxman should give the club more time to sort itself out.
‘It is in nobody’s interests if the club goes into administration,’ he said. ‘HMRC should be making sure that Pompey remains a viable business so that they can pay off what they owe. The club is going to get a substantial sum from the Premier League in the next week or two.
‘It is in HMRC’s interest to keep Pompey afloat and keep that parachute payment coming in so they can recover some of their money. But if they go into administration they will not receive anything.
‘I’m also hoping the Prime Minister could do something, he said he would help and now is the time for everyone to do everything they can.’
The club said it couldn’t comment on the ongoing financial negotiations, but maintained that it is seeking a validation order to unfreeze the accounts and pay staff, players and suppliers.
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Comments
There are 50 comments to this article
Page 1 of 4
bluelagoon
Friday, February 10, 2012 at 09:12 PM48 Hilzee - Yes, something like that, obviously the details are complicated (but they are in every scenario). I think that if HMRC don't back down, Chainrai will have to try for administration. HMRC can then challenge and go for replacing Andronikou with their own administrator. This would mean the process potentially going a different way from under a UHY Hacker regime. Whereas if HMRC were to back off, the company would be back fully under the control of AA and of Chainrai (charges on PFC and Fratton Park). So similar obstacles to a proper solution as recently, up to the time the WUP was issued. As I said, many details to be added and considered.
PO48RA
Friday, February 10, 2012 at 08:20 PMEvening everyone. So can someone bring me upto speed on whats happened today regarding the taxman meeting ?
Hilzee
Friday, February 10, 2012 at 08:15 PMbluelagoon...very thoughtful comments, however i am a little confused as to what will happen when we are in admin. Who has the power right now to put us in admin? What kind of CVA would HMRC agree too, if at all? Stating that admin is our best option (unless we get a new owner) assumes HMRC will agree a new CVA right? So would this be the hypothetical scenario if we go into admin?.........A new CVA which would be full repayment to HMRC, because that's all they will accept. Pay back BC (whatever we owe him). And we sell players on high wages and buy or loan players on cheaper wages to lower the tax bill. We get a points deduction this season and possibly next if still in admin. And get relegated due to lower ability players. Pay off CVA, and tick over in lower divisions.
Beer Can
Friday, February 10, 2012 at 07:33 PMDo we know how the meeting went? I'm guessing something like HMRC 'Have you got our £7m (whatever the latest figure is?'. Us 'No'. HMRC 'See you on 20th then'. Honestly, do we really think this is going to help? HMRC take no prisoners with tax debts in any other company. With football they've got the added bonus of the Football Creditors rule, so they try even harder. At this point it's a case of 'pay the whole lot, or show us some sensible evidence that someone is going to buy you imminently and pay the debt'. I simply cannot see how there would be any other outcome.
eastneyboy
Friday, February 10, 2012 at 06:43 PMI am hopeful today - yesterday I was not....Tomorrow? Who knows - we are Pompey and we live life on the edge. Unfortunately, nowadays, it's the edge of a fooking deep precipice! ---- PUP! Three points tomorrow to cheer us all up a bit.
bluelagoon
Friday, February 10, 2012 at 05:07 PM44 - MileEnder - Simply disagree, and I'm not for Plan B. I'm saying that the only way to cleanse the existing company - a small chance, but still a chance - is for Chainrai to be prised out. Survival of PFC with Chainrai in control is asking for more misery and liquidation. Very unfortunately, it is only administration that offers a small chance. This is Plan A. Mordaunt, whether out of naivety or political opportunism or both, is of no use in this connexion, on the contrary. For us, as opposed to Chainrai, HMRC standing firm would be good news.
MileEnder
Friday, February 10, 2012 at 04:49 PMbluelagoon - so ive seen where you're in error...its your initial premise ....."The priority now for us is to get Chainrai out of Pompey". Its not that at all it is to save the club in its existing format in The Championship and playing at Fratton Park. You're basically saying its Plan B or nothing..............well i think the majority of fans still want Plan A to suceed. A Plan B is a fall back position as back up if the original plan fails.
Farside1
Friday, February 10, 2012 at 03:59 PMBlueLagoon - good summary. Vote catching MP's are the last thing any football club needs
bluelagoon
Friday, February 10, 2012 at 03:53 PM17 Exgaffer - My thought is this. The priority now for us is to get Chainrai out of Pompey. He wants to avoid liquidation (players cease to be assets, etc.). He prefers administration to liquidation (players may be able to be sold) but HMRC could interfere. So the very best for him is that HMRC back off. In that way the company can operate freely under AA's "ownership" and control, i.e. Chainrai's. This gives him the possibility to siphen off assets without being obstructed. Penny Mordaunt's initiative, if successful, would achieve Chainrai's first preference and make his continued role in the club stronger. -- If there were no Chainrai situation, it would of course be better (from our point of view) for PFC not to go into administration. But since there is a Chainrai situation, we don't have the luxury of choice. Better administration, with a Court watching over PFC, even with minus points etc., than a continuation of the present situation, which means ongoing Chainrai domination AND makes a final liquidation more likely (Chainrai can more easily walk away with the proceeds from assets including players and then liquidate). -- This is only a rough account, of course. Just compare with family members of a seriously ill family member asking the hospital staff to delay an operation on that member "because it will hurt". Would that be kind? I know nothing much about Penny Mordaunt but suspect she hasn't got a clue about the real situation and is just playing to the gallery.
Laidlaw is a Legend
Friday, February 10, 2012 at 01:44 PMquestion? If we are put into admin, who will decide, PFC, AA or BC? And would UHY will be able to administer both. Or would be a conflict of interest ?
blue bob
Friday, February 10, 2012 at 01:36 PMBottom line is, HMRC's money is our money, it doesn't bother them how much they invest in pursuing tax dodgers.
blue bob
Friday, February 10, 2012 at 01:20 PMOn radio solent news this morning, they stated tha Pompey owe the taxman 7 million.
DunKirk
Friday, February 10, 2012 at 01:16 PM@33. He is CEO, he holds a position of responsibility, any news be it good or bad should come from his mouth and his alone, he should not leave that task fall to someone below his pay scale or authorithy. As I have said, spineless!!
Harry Stotle
Friday, February 10, 2012 at 12:50 PMCEO = Clueless Executive Officer
southseasteve
Friday, February 10, 2012 at 12:46 PM1 4 all all 4 1: well said.
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