HMRC gets tough on football...

Looks like HMRC are beginning to take more and more action against insolvent football clubs - Cardiff FC's turn now - see here.

It has to be said that the "Football Creditor's Rule" is an abuse of Insolvency Legislation. This "rule" is laid down by the Football Association which says that all the "football creditors" must get paid first before any other creditor if the football club in question is to retain its share in the Football Association. If those creditors aren't paid then the club loses its share and can't be an FA Club.

On a practical basis, this gives the football creditors a "super priority" over any other creditor if the club is to be preserved as an FA Club. This priority is against the principles of the Insolvency Act 1986 and the legislation doesn't provide for such a priority. HMRC have long expressed their dissatisfaction over this and Portsmouth FC nearly didn't get its CVA because HMRC was going to vote against it (amongst other matters) in relation to the football creditor rule. The CVA eventually got approved only because HMRC were out-voted.

I think it's only a matter of time before the Football Creditors Rule gets overturned...