Pompey have been issued with a winding-up petition by HM Revenue and Customs over an unpaid £1.6m tax bill.
The club received the petition in writing around seven business days ago from HMRC after missing two payments.
CSI’s administrator Andrew Andronikou, the joint-administrator of the club’s parent company Convers Sports Initiatives (CSI), said the club was unable to pay a bill of £800,000 to HM Revenue & Customs (HMRC) in December – and said another £800,000 payment was due on January 20.
The news that the club had missed two payments came as Sicilian American businessman Joseph Cala pulled out of a bid to take over the club.
Mr Andronikou told The News on Saturday the HMRC are looking at the situation ‘very carefully’.
He said: ‘The HMRC have preserved their position and we will see what happens on Monday or Tuesday.
‘We are concerned about the short term and are working very hard to secure a deal.
‘Administration is not on the cards and it is the last thing we would consider.
‘I can say that the club has not got significant debts, it has significant cash flow issues.’
Sources at Her Majesty’s Revenue and Customs have confirmed that Portsmouth Football Club has been handed a winding up petition.
A notice publicising the petition should have appeared in the London Gazette this afternoon, the source said, but for some reason publication was delayed.
In a statement, an HMRC spokeswoman said: ‘Ensuring tax is paid on time should be at the centre of a football club’s business strategy just as it should be for any other enterprise.
‘Any business that regards paying tax as an optional extra after other expenses are met, or that uses tax collected from employees or customers as working capital, is potentially heading for trouble.
‘It is only fair to those clubs and to other taxpayers who do meet their obligations that HMRC enforces payment of tax debts owed – and if need be, issues a winding up petition or seeks to appoint an administrator.
‘There is little HMRC can do for a business - be it a football club or not - whose viability is dependent either on not paying the UK taxes to which they are liable, or on special treatment not available to other customers with similar tax affairs.’
What happens now is that other people owed money by Portsmouth FC are invited to get in touch with HMRC’s solicitors, and together all the creditors will go to court and demand to be paid.
If they cannot be paid, for example, and if Pompey cannot find a new owner, the judge may issue a winding up order and the club will be liquidated.