Scotland business

Hearts football club faces action over unpaid tax

Hearts public notice
Image caption Notice of the latest legal action appeared in the press on Tuesday

Heart of Midlothian Football Club is facing fresh court action over unpaid tax.

HM Revenue and Customs has given the Edinburgh club eight days to pay a tax bill or face liquidation.

It is the fifth time in recent years that the club has faced legal action over unpaid tax.

Late last year, Hearts was forced to pay about £500,000 to ward off a winding-up order over an outstanding tax bill.

The club had similar winding up orders served against it in 2009 and November 2010 over unpaid tax to HMRC.

Both of these were settled after the club paid the bills.

In a statement, Hearts said: "The club is aware of the notice placed in a newspaper relating to an earlier petition presented to the Court of Session.

"We are confident, however, that the relevant matter involving HMRC will be resolved in the very near future and no action as specified in the public notice will be necessary."

Hearts' financial predicament has been highlighted by the delayed payment of players' wages.

January was the first time in four months the players received their salaries on time, with Hearts avoiding unlimited sanctions from the Scottish Premier League as a result.

'Getting tougher'

Tax experts said they were not surprised at HMRC's latest court move.

John Cairns, tax partner at BDO LLP in Glasgow, said tax officials were "getting tougher".

He said: "It used to be that football clubs were pretty well left alone, but they are very much in focus now.

"I think that clubs generally are in a pretty perilous position - their cash flow is quite tight and being very carefully managed."

He added: "With Hearts in particular, with them perhaps struggling to pay their players' wages, they have got to be struggling, as well, with paying their tax liabilities.

"I think football clubs are a sector under pressure and probably the last thing they need is another creditor going after them.

"But in fairness, why shouldn't HMRC pursue debts that are validly due?"

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