HMRC have lost their case against cash-strapped football club, Portsmouth.
HMRC were challenging a Company Voluntary Agreement that was created by Portsmouth FC in a bid to help them clear their debts. HMRC disputed the CVA as it results in them receiving less money than they desire. Portsmouth’s CVA instead opts to give priority to its unpaid players and other football creditors, a point that HMRC referred to as “unfair and seriously flawed.”
A successful ruling for HMRC could have led to the demise of Portsmouth Football Club, but Mr Justice Mann ruled that victory out: "I propose to find in favour of the company administrators and dismiss the application of HMRC," he said.
However HMRC have accepted their loss and stated that they will not appeal the decision: “HMRC is naturally disappointed not to have won this case and we can confirm that we do not intend to appeal. Our aim when pursuing debt of any kind is to achieve a fair outcome for the taxpayer and we will take this forward in the wider context of the football industry through separate and outstanding legal proceedings over the status of the so-called Football Creditors Rule.”