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Millions of football clubs' tax debt written off
A BBC investigation has revealed that football clubs that have experienced financial difficulties owe millions of pounds in unpaid tax bills.
According to Radio 5 Live's Donal MacIntyre programme on 23 November, HM Revenue and Customs (HMRC) has been forced to write off nearly £30m between 18 clubs after receiving just a fraction of what was owed. The BBC examined 18 out of the 42 clubs which had entered administration since 2000, with one example suggesting that Leicester City Football Club paid back just 10 per cent of a £7m tax bill.
Other clubs found by the investigation to owe unpaid taxes include Leeds United Football Club, Ipswich Town Football Club and Luton Town Football Club. Unlike other businesses, when a club goes into administration, all football-related debts are honoured first, while HMRC is not deemed to be a preferential creditor.
Phil Willis, MP for Harrogate and Knaresborough, told the BBC: "It is quite ludicrous that the taxpayer has to pick up the tab for what are often poor business dealings. We should get rid of the football creditors rule and all creditors should get an equal share of the money." However, the chair of the Football League, Lord Mawhinney, said that the football creditors rule was essential to ensure clubs do not try to avoid paying transfer fees, but it would be looking at ways of preventing clubs from accumulating large tax arrears in future.
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