Hearts to challenge £1.75m tax bill over loan players

Hearts are "robustly" disputing a £1.75m bill from Revenue and Customs.

The tax bill, revealed in a document detailing an upcoming issue of Hearts shares, relates to players loaned to the Tynecastle club from FBK Kaunas.

Tax authorities have claimed what they regard as unpaid liabilities and the amount of the bill does not include interest and penalties.

"The claims will be heard by the relevant tax tribunal in November 2012," Hearts stated.

Should the club be unsuccessful in their defence, they say it "could have a dramatically negative effect on the company".

And they added: "The directors are attempting to robustly defend those claims but the burden of proof is on the company and the tax will be payable unless the company is successful in challenging the claims."

Hearts argue that the players concerned were paid in Lithuania and tax was paid by FBK Kanuas.

The Tynecastle club's share issue, which could result in fans taking a 10% holding, aims to raise up to £1.79m.

Late payment of player wages in September and October has resulted in Hearts being placed under a transfer embargo, meaning the proposed capture of Rudi Skacel failed to materialise.

The midfielder, who has won the Scottish Cup in each of his two previous spells at Tynecastle, has instead joined Dundee United.