Hearts agree tax and NI payment plan with HMRC

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Tynecastle Stadium

Hearts have reached an agreement with Her Majesty's Revenue and Customs in a dispute over tax and National Insurance contributions.

The £1.75m dispute was first revealed in Hearts' share issue brochure last month as the Edinburgh club launched a scheme to raise £1.79m.

Now Hearts have agreed to pay £1.5m over a three-year period.

The deal is separate to Monday's settlement of a £450,000 tax bill which ended the threat of a winding-up order.

That was paid in two instalments after HMRC agreed that Hearts could pay the overdue amount in two stages.

The £1.75m dispute related to players loaned to the Scottish Premier League club since 2005 from Lithuanian outfit Kaunas, which is controlled by Hearts' majority shareholder Vladimir Romanov.

The players from Kaunas had paid tax to the Lithuanian authorities and not to HMRC, despite working in the UK.

The Tynecastle club's share issue brochure revealed HMRC "claimed unpaid tax liabilities of circa £1.75m (excluding interest and penalties) in relation to the arrangements between the company (Hearts) and Kaunas FC in relation to certain players who were loaned to the company by Kaunas FC".

Hearts announced on Tuesday that no penalties are payable under the terms of the agreement and that the tax tribunal private hearing held last month has been concluded without any evidence being heard.

In a statement on the club's website, Hearts director Sergejus Fedotovas said: "We are satisfied that this resolution provides the club with an opportunity to now move forward with certainty.

"We believe that the payment terms agreed with HMRC allow the club to manage repayments in a way that will not be detrimental to longer-term development of the club."

Hearts have so far raised more than £600,000 in their share issue scheme.

The scheme's target is to raise almost £2m as the club battles to pay tax bills, meet running costs and develop its youth development programme.

The addition of a £500,000 bill for the next three years will clearly present the club with further financial challenges.

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55 comments

  • Live within your means. Is it really so hard to comprehend? Don't have a squad you can't afford and a wage bill you can't support. Other clubs live within their means and are laughed at for their lack of success. Hearts have survived by the skin of their teeth, lets hope they've learned a lesson.

  • nice one... out of the woods... but for how long... in 3 years will we be facing the same situation?

  • Nice to see some teams pay their taxes.

  • some people still trying to explain debt to a ....

    why waste your time? everybody understands why HMRC did not do a deal with rangers (IL). The information is out there in abundance if they really wanted to know. Instead they think if they keep repeating nonsense often enough we will start to doubt the facts.

    RFC were deliberately NOT PAYING TAX.

    long way to go for HoMFC hope you make it

  • Been saying for a while that Romonov would not let Hearts go down and that he would settle with the tax auithorities

  • Lets also not forget that far too often, Rangers deliberately fudged transparency by not fully cooperating with hector for a sustained period of 5 years. Seriously, to the idiots crowing conspiracy or an injustice here, your anger should be directed at Murray, Whyte & no one else. They put you where you are now, not the authorities.

  • Put simply rossconley (now, are you reading carefully?)

    We've complied with HMRC every step of the way & have not gone out of our way to avoid paying tax. This situation is to do with a ruling only made recently.

    Rangers on the other hand deliberately paid NO tax for a whole year under Craig Whyte's farcical tenure..

    Dundee just had too many creditors to deal with simultaneously .

  • Some people on here need to understand what has actually happened. This was not a case of refusing to pay (as in old Rangers) or not being able to pay (as in Dundee). Hearts have been co-operating with HMRC for years about this difference of opinion surrounding the HMRC's own rules on individuals receiving salaries from an employer outside the UK.

  • @47 - dirtyharry

    get a grip mate you talk aboutsolute nonsense

  • I'm sure there are lost puppies out there who will listen to you but again you ignore fact and pretend to be right. The appeal is based on the lack of unanimity. Its your idiotic assumptions about what I think and your foolish interpretation of the process and outcome that is at issue. Do you need yet another explanation? You're in my back pocket now, you won't like that but that is how it is:)

  • @51 lol! Rangers were cleared mate the verdict was not unanimous but it does not have to be, do you understand that? MIH (SDM's company was the company in question over this whole case) The appeal is a process, but untill and IF it changes anything the verdict still stands, i know you wish this wasnt the case but it is. So what ur saying to me is the outcome of the BTC doesnt matter just now? LOL

  • Dear Stewart,
    Rangers urny forcing their fans to go tae wur gemme; gonny spank them?

    What about all this, "We don't need Rangers. We don't want Rangers"?

    Has HMRC been given leave to appeal?

  • Firstly. I'm not talking about the media you were. I know it takes a long time, you it seems rely on the DRecord. Secondly, SDM was never in a court of law in the way you use this term - it was a tax hearing - and was never found not guilty. There is a process and its not over until the appeal is heard whether you like it or not. You are so dim I'm surprised they allow you to vote!

  • @49 media reaction and due process? Listen you dont know how long it takes and neither do i, me and you both go by what dates we are given by the media. SDM was found not guilty in a court of law, thats the verdict wether you like it or not, HMRC can appeal but unless its successful the verdict is Rangers were cleared, You are such a hater its unreal.

  • #38
    Try and distinguish between media reaction and due process: which in most criminal and civil takes an appreciable amount of time to conduct. About 20 new tax avoidance schemes arise every year: its a complex and lengthy process. SDM has not been cleared of anything: its ain't over until the appeal is heard.

  • @47 lol yeah and 'celtic plc 1994 are to be banned for 5 years because none of their fans attended the arbroath home tie' Can i ask a question to hearts fans? see the 450k that was recently paid, was that from the fans fund, or from the owner? Just thinking who is actually paying the clubs running costs?

  • Complain to the BBC about not using the correct"The" in front of newco "The Rangers" at www.bbc.co.uk/complaints
    The Arabs will be awarded the tie,due to police public safety concerns,the The Rangers will be fined £100k and banned from the Scottish Cup for 10 years.

  • @45 cont However Rangers didn't pay ANY tax for over 6 months with CW, this was going to lead to a winding up order which would have required an immediate payment. This is like the Hearts £495k bill. CW either didn't want to pay or couldn't pay that so put the club into administration. D@mn the text limit & time delay on here!

  • Plus for those going on about having to pay the bill immediately that is not the case as with any bill you have a time frame to make the payment. Hearts had only just received this one and were querying the amount and have arranged a scheduled repayment from the date of receipt. That is similar to the rangers EBT case.
    will cont...

  • Good news for Hearts, but I can't help thinking that there are just going to be more of these around the corner. Vlad won't let the club go under as he'd lose his investment and the chance to recoup some funds. With Rangers it cost CW a £1 so don't think he was as fussy.

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