THE taxman is trying to change Premier League debt rules which allowed Pompey to pay players before creditors.
HM Revenue & Customs (HMRC) is going to court to challenge controversial rules requiring clubs in financial trouble to settle debts with players, managers and other football clubs first – before paying creditors outside the game.
The rule allowed financially-strapped Portsmouth to pay only £4.8m of an outstanding tax bill of £24m, and the taxman insists the rule is unlawful and short-changes the taxpayer.
The Premier League, which represents many of the sport’s richest clubs, will ask the High Court on Tuesday to throw out the taxman’s challenge, but if it loses the ruling could apply to Football League clubs as well.
The verdict could have a dramatic impact on the way football’s business side is conducted, and some fear it will lead to financial chaos and will mean hard-up clubs going out of business.
But critics argue it is unfair that a player, manager or other football club is more deserving of being paid than other creditors. Local government officer and Pompey fan Tom Purnell was so outraged by the small settlement given to charities when the club paid its debts that he started a campaign to help St John Ambulance recover the £2,702 it was owed.
At the time he said: ‘All of the fans are disgusted by what has happened at the club.
‘Small charities, local businesses and schools have lost millions.’
Football’s authorities argue that the rule protects the national game’s stability and integrity, saying that it helped Watford avoid acute financial difficulties when Portsmouth recently got into trouble.