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Jim Smith

Accounts question for NCFC accounts boffins

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Apologies for not raising this last week but I note that plymouth are now back in court today fighting off admin over £700K of unpaid tax to HMRC and it made me think back to our recently issued accounts. i am sure that in one of the commentaries on here someone raised the point that taxed owed had risen quite considerably? As it appears to me that many of the clubs who havereally hit the wall in recent years have ended up going into admin as a result of demands from the tax man should we be concerned about this?

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it is not so much demands from the taxman but a club cheating by not paying what is due. this tends to happen when '' hambitious'' clubs over spend and then regard money due to the taxman as a handy overdraft facility.

I don''t see us overspending, nor suddenly finding a dramatic drop in our income without a subsequent means of cutting the equivilant out goings.

However I normally get my season ticket a bit cheaper by arranging to slip the geezer a few readies, no questions asked, round the back of the club in the car park.

So who knows.

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I think it''s probably down to if those sides that go into administration can pay their loans/debts. Norwich have assetts such as Carrow Road and Colney which in extremely bad times, they could be sold. Plymouth may not have such assetts and so they aren''t very ''liquid'' and so any debts they get into can''t be paid very easily. NCFC probably have a high ''liquidity'' rating and so don''t need to worry as much as other sides (Ipswich went into Admin as they didn''t have any way of paying debts, one of these reasons is they dont have a ground they could sell,as it''s already the council''s). This is probably totally wrong, but that''s what I think, so knowbody shoot me down! :P

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I vaguely remember the arch-villain Doomcaster popping up from his underground lair to announce that we had nothing to fear from the tax-man, before turning into a bat and flying into the black of night.My memory is hazy on these things though, so this may not be what actually happened at the time.  For gods sake though nobody look through old threads to find out, you might upset MTV...

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OK ... This maybe a really naive question but, if the club have made a substantial loss and not made a profit for for a good few years, how have they managed to generate a bill for tax in the first place?

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tax isn''t on profit is it?

Isn''t it on any income? i presume they have had some income? (sorry if i''m wrong, i''m not an expert :P)

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I think if a loss is generated then no tax is due... There would of course still be the VAT to deal with

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[quote user="Pigs in Space"]OK ... This maybe a really naive question but, if the club have made a substantial loss and not made a profit for for a good few years, how have they managed to generate a bill for tax in the first place?[/quote]

the national insurance contributions must be enormous at a guess.

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I think that a lot of the trouble comes when Clubs fail to pass on National Insurance contributions and Income Tax drawn from the Players and other employees wages. Possibly these sums are used as a source of free loans.?

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I would imagine tax due is VAT, Nat Ins + PAYE. In my working days the latter were paid every month. These days judging by the amount owed by football clubs they appear to being treated very leniently. The Inland Revenue seem very reluctant to insist on prompt payment. Why I do not know. Possible answer is that Revenue are so disorganised they do not know where they are !!

The reason we are just about keeping afloat is that losses are being covered by substantial upfront season ticket payments (£7 million last accounts) plus land asset sales. It is a big juggling act which cannot go on for ever. At the end of the day they will have to make a profit or someone daft puts more money in to the Club.

The big light on the horizon is that Lambert will take us in to the Premiership and we will get a big payment to straighten us out.

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[quote user="Gingerpele"]tax isn''t on profit is it?

Isn''t it on any income? i presume they have had some income? (sorry if i''m wrong, i''m not an expert :P)[/quote]Tax is only payable on the profit figure not the overall turnover.

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Ah but there are profits, there are accounting profits, then there are taxable profits, then there are prophets of doom like First Wizard!

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Are you suggesting that 1st Wiz should be taxed ?

It could stop him posting

A tax relief for the rest of us, perhaps

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[quote user="kdncfc"][quote user="Gingerpele"]tax isn''t on profit is it?

Isn''t it on any income? i presume they have had some income? (sorry if i''m wrong, i''m not an expert :P)[/quote]Tax is only payable on the profit figure not the overall turnover.[/quote]Er, no. Corporation tax is payable on profits.VAT is payable on everything else the club sells regardless of whether the club makes a profit or a loss.

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[quote user="ricardo"][quote user="kdncfc"][quote user="Gingerpele"]tax isn''t on profit is it? Isn''t it on any income? i presume they have had some income? (sorry if i''m wrong, i''m not an expert :P)[/quote]
Tax is only payable on the profit figure not the overall turnover.
[/quote]

Er, no. Corporation tax is payable on profits.

VAT is payable on everything else the club sells regardless of whether the club makes a profit or a loss.
[/quote]

But the club just collects the VAT and passes it on, so it''s not a tax on the sales of the club, it''s a tax on their purchases (to the extent it''s not recoverable) which is paid to HMRC by whoever we buy items from on which VAT is charged. So what you say is a bit misleading I think.

 

The club will have a tax creditor because of the following:

 

- VAT collected and not passed on (less any recovery due)

- PAYE/NI collected and not yet passed on

- Employers NI contributions

 

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