Premier League to face taxman in court
Tue 28th Sep 2010 | Legal
The Premier League look set to do battle with HMRC in the courts at the beginning of 2010 over the ‘football creditor’ rule.
A trial "window" for HMRC and the Football Association Premier League (FAPL) to battle out insolvency rules in court has been set for 15 February, according to Accountancy Age.
A source close to the case said it was expected that the FAPL will attempt to strike-out the taxman's claim that the football creditor rule is unlawful. A trial window allows the FAPL to submit its arguments and the court to hear both sides of the dispute before a trial date is set.
Under the football creditor rule, when a club enters administration, creditors such as players and managers are paid in full from the administration. The remaining money is then divided between the unsecured creditors, including HMRC.
A spokesman from HMRC told Accountancy Age: "There is nothing in insolvency legislation that provides for unsecured debts due to 'football creditors' to be paid in preference to other unsecured creditors such as HMRC.
"Our view is that the practical application of the so called 'football creditors rule' may be unlawful."
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