Accrington & The Tax Man

By on Jun 1, 2009 in English League Football, Finance | 4 comments

The news that Accrington Stanley have been issued with a winding up order should come as no great surprise to those that watch lower league football that closely. As the cold wind of economic reality blows through the lower divisions, Accrington were always going to be amongst the favourites to struggle to keep their heads above water. With crowds having fallen by about one-third since their first season back in the Football League to an average of around just 1,400 and one of their main sponsors, Fraser Eagle, having run into financial difficulties and been unable to pay the remaining £100,000 on a stadium sponsorship deal, that the club managed to retain anything like full-time status was pretty much remarkable.

Of course, maintaining this status becomes easier if you can cut corners elsewhere, and Accrington have been doing this by not paying their tax bill. The debt – £300,000 – is not a completely insurmountable one, but the fact that it has not been paid would seem to indicate that other bills were taking preference. Such is the moral vaccuum at the heart of professional football. Had they wished to, Accrington could have looked elsewhere for examples of HMRC behaving as if they were sick to the back teeth of football clubs wasting money on players and evading their responsibilities to their creditors through entering into CVAs and paying back mere fraction of what they owe.

If the story sends a chill to the bones of their supporters, then it’s with good reason. When the original Accrington Stanley Football Club went bust in the middle of the 1961/62 football season it was over a debt of £62,000, but creditors’ concerns over the club were fuelled by how badly it appeared to be being run at the time, including neglecting to buy national insurance stamps for its players all season. The club resigned from the Football League in haste, and repented at leisure upon the involvement of Burnley chairman Bob Lord, who had been drafted in to prepare a plan to save the club, only to announce that they needed to close down. It was six years before Stanley started over, and not until 2006 that they worked their way back into the Football League.

Against this history and the Hooded Claw-esque shadow of the tax man in the background sits, perhaps unsurprisingly, a tale of backroom bickering. Ilyas Khan, based in Surrey but born in Accrington, is the club’s second largest shareholder and has been trying to buy the club for a decade or so. He recently submitted a £250,000 offer to the largest shareholder, Eric Whalley, but this appears to have fallen through because Whalley seems to think that his shareholding in the club is worth £1m at present. Whalley owns a shade over a 50% shareholding at present, meaning that he values the club at £2m. Considering their current financial plight (it’s safe to assume that Accrington are not turning a profit at the moment), where he gets this figure from is anybody’s guess.

Considering the events of the spiring of 1962, the backroom wrangling and the hard line status taken by HMRC since they lost preferred creditor status in 2003, it is only right that the clubs’ supporters be concerned over which direction the club is heading in. Once again, though, a football club has been run in a way that suggests that paying the day-to-day bills was a right rather than an obligation, and we must start to wonder at which point the FA or the Football League will step in and say “enough is enough”. If clubs can’t be trusted to pay something as basic as the tax bill themselves, it might be time for changes to the rules of league membership to ensure that they do.

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    4 Comments

  1. Your last sentence is absolutely spot on. That said, it is very sad that a club whose recovery has been heroic, should find itself on the edge of the precipice from which it started.

    Gervillian Swike

    June 1, 2009

  2. Perhaps the only way for most lower league clubs to get into the Football League is to play fast and loose with their ground, finances and the taxman?

    It’s just a smaller scale version of the killer step up between Division 2 and the Premiership.

    Martin

    June 2, 2009

  3. That last sentence makes a really valid point. The league should write a rule stating that tax obligations must be met, then creditors, followed by players. This would stop clubs paying way over the odds for players wages, and hopefully inject a much needed dose of realism into lower league football. Big wage bills cannot be sustained on gates of 1500 – 3000. Maybe part time could be the way forward.
    Another cracking article, by the way.

    Andy C

    June 2, 2009

  4. They just need to add HMRC to the football creditors rule. Simple.

    Martin

    June 3, 2009

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