Now according to a report in the Telegraph “One club has now told Telegraph Sport privately of heightened fears that the case [involving Everton] will now be resolved after the start of next season.”
The issue behind all this financial fair play stuff is fairly easy: clubs can lose money but there is a limit on the amount of money they can lose. That limit is currently set at £105m over three years.
Everton have spent something in the order of £700 million in the last seven years and they are still only just escaping relegation – or so it seems. So with that level of spending it looks as if they might well have lost more money than they should have done.
However profit and loss figures are fairly notorious as they are affected by the value of assets held – that is the players, and different accountants will work with the figures they get in different ways. In the end of course, the only final arbiter is Revenue and Customs and they might in one case take quick action, and in another hang around for a while.
With my own work as chair of a small plc for a number of years my company was challenged three times by Revenue and Customs over the level of VAT we had paid. Each time the accusation was on the same technical point.
Now I always took the view in running the company that we should spend our time trying to make a profit not trying to find a way of avoiding tax, so we always did exactly what our accountants and the Revenue and Customs rulebook said. So we fought the tax office each time over demands that would have put the company out of business had they been allowed.
We won each time, the junior official who had made the original claim having “forgotten” a particular, but very important ruling in relation to VAT that was specifically aimed at companies in our line of business. But the experience did show me that even the government’s own tax inspectors often have no idea just what the rules say and what government regulation says about how they should be applied.
And if they can make cock-ups like that with a company a fraction of the size of a Premier League football club, who knows what nonsense they can dream up with a club like Everton.
But still at the heart of all of this is the issue of time. If Everton are found to have broken the rules and are docked three points are they then relegated half way through a season? Or will the league shuffle the mess under a convenient carpet and forget about it?
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