An Open Letter To HMRC Regarding Wrexham FC
Regular readers of this site will be more than aware of the tribulations currently surrounding Wrexham Football Club. The former chair of the Wrexham Supporters Trust, Lindsay Jones, has sent this open letter to HMRC which he has granted us permission to reprint here.
Re Wrexham FC (2006)
Dear Mr Norrell,
I am writing to you on the above subject in the hope that I can help in some way to resolve the current situation.
As a Wrexham supporter of many years standing I have followed the slow decline of my club with a growing frustration and anger. This is shared by many thousands of my fellow supporters who can see our improved performance on the pitch matched by a jaw dropping incompetence off it.
We have observed a proud institution reduced to a circus side show by owners who have sought to utilise its assets to support their other business interests.
My only motivation in writing to you is to try and rescue my club from the machinations of these characters and of course help HMRC to recoup the monies owed to it by my club.
You may, or may not, be aware of the following brief narrative. If not I hope that you will be in a position to investigate this matter.
Wrexham FC is the oldest football club in Wales and plays its football at the oldest international stadium in the world, The Racecourse.
Through various accidents of history the club has come to be owned by a holding company called Wrexham Village Ltd. The majority shareholders are Geoff Moss and Ian Roberts.
The directors of Wrexham Village (Moss and Roberts) are also the directors of Wrexham FC (2006).
In December 2009 Wrexham Village acquired another company, the Celtic Crusaders, a rugby league franchise based in South Wales. The Crusaders franchise was moved north and subsequently played its matches at the Racecourse Stadium, the home of Wrexham FC.
The directors of the Crusaders were the same gentlemen who direct the affairs of Wrexham Village and also Wrexham FC. The Crusaders being owned within the same ownership structure as Wrexham FC.
At the time of the acquisition it was mooted by the owners that the Crusaders would pay a contribution to the football club for the use of its facilities.
In November 2010 the Crusaders entered administration.
The Crusaders financial difficulties were alleged to have been caused by hidden debts on acquisition.
The Crusaders were subsequently bought out of administration in January with the bulk of the creditors receiving nothing.
The new owners of the Crusaders were Messrs Moss and Roberts. This time the club would be owned outside the Wrexham Village structure.
The administrators report states that HMRC was owed £445k by the Crusaders and I assume that this amount was lost to the revenue.
It may interest you to know that the Rugby League was owed £701k and in a side deal the new owners of the Crusaders agreed to repay this amount to the Rugby League. The money was secured on the assets of Wrexham FC (2006). It is difficult to see any benefit in this transaction to Wrexham FC (2006).
To the uninitiated it may appear that the Rugby League assumed a position of preferential creditor in the above dealings. This view may be reinforced by the fact that the administrators, O Hara & Co, have worked on several Rugby related insolvencies and I believe they are currently assisting the creditors of Wakefield Trinity.
Of course I am not particularly au fait with the intricacies of insolvency law and could not comment on this.
Given that HMRC has lost so much money to Messrs Moss and Roberts I find it understandable that you are apparently unwilling to demand anything less than payment in full.
I would like to return to the Crusaders administration report as I believe it may help you to find the monies owed to you by our resident defaulters.
The report states as follows.
“there is an informal agreement in place in respect of the company’s occupation.”
This relates to the Crusaders occupation at the Racecourse. At a fans forum in January 2010 Mr Roberts was asked how much money the Crusaders was paying for the use of facilities.
He stated that:
“We are all ****ing in the same pot”
I am sure you will agree that this is a proposition that would be very difficult to quantify.
Wrexham FC (2006) did not appear on the Crusaders list of creditors which struck me as rather odd. Payment (or non ) of rent is often a cause of companies reaching for the sanctuary of administration.
A glance at the Crusaders expenses during the administration period also reveals that no rent was paid to Wrexham FC by the administrators.
The assumption would have to be that the Crusaders were not paying a market rent for the use of the Racecourse Stadium.
Of course this could be verified by a study of the latest accounts from Wrexham FC (2006), Celtic Crusaders and Wrexham Village. Sadly we will have to wait for this information as none of the aforementioned have filed accounts for the period under review.
A market rent for use of a stadium can vary from stadium to stadium. However I have yet to find any clubs that grant use of their facilities for less than £250k per annum.
This is a huge sum of money for any business to write off.
It could be argued that the directors of Wrexham FC (2006) were in breach of their fiduciary duties to the creditors, employees and shareholders of Wrexham FC (2006) by failing to charge the Crusaders a fair market rent.
I am sure that this is not the case and that the Directors of Wrexham FC (2006) would be happy to put this matter to rest by providing full disclosure of the relationship between the two clubs.
I note today that the directors of Wrexham FC (2006) claim to have loaned a sum of £1.8m to the football club. This claim is a cause of some confusion to me as I cannot understand why directors of a business should choose to loan it money from their own pockets when at the same time they are passing up legitimate income opportunities elsewhere.
You may suggest that by following this course of action they would be creating an obligation on the business which could be met by removing its assets at some point.
However I do not believe this to be the case as, once again, the directors of Wrexham FC (2006) would be in breach of their fiduciary duties.
I must add that since exiting administration the Directors of the Crusaders have announced that a deal has been agreed with the Directors of Wrexham FC (2006) for the use of the football clubs facilities. I have no knowledge of the detail of this agreement.
Wrexham FC (2006) must be the most badly run business in the UK. The directors of the company, both multi millionaires, are currently shaking the begging bowl around North Wales in an attempt to deflect their responsibilities for paying their debts to yourselves.
The supporters of the football club are desperate to see it succeed. We want our club to trade with integrity and pay its way. We are appalled at the shambles created by the clubs directors.
These characters are currently blackmailing the supporters with a “your club will die” approach if we do not cough up to clear up their mess.
I hope that the information in this e mail will in some way help HMRC to recoup the monies owed and also shine a light on the activities of those that currently guide the affairs of something we all hold dear.
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