Written by: Keith Tully
Date: Wednesday 28th March, 2018
David Sullivan, the co-owner of West Ham United, has been adjudged at a tribunal to have used the football club to avoid paying £700,000 in taxes.
The matter relates to a £2 million transfer of funds from Mr Sullivan’s family business to West Ham United in 2010 through a purchase of shares in the holding company that owns the football club.
Mr Sullivan has now been told by a first-tier tax tribunal that he must pay back what sums he is deemed to owe because it is believed that the relevant transaction was motivated in part by a desire to avoid taxation.
Details of the issue being considered by the tribunal were first revealed by the Times, with its reports insisting that the £2 million of shares bought by Mr Sullivan’s company were, on the very same day in 2010, converted into “deferred shares” and deemed effectively worthless.
The allegations being faced by Mr Sullivan are that his company acquired shares in West Ham United’s holding company partly in order to bring about a loss on its balance sheet, which would then result in its tax liabilities being reduced by some £700,000.
Judge Jane Bailey, who heard the case at tribunal, said the overarching reason for the transaction was to provide funds to West Ham United but she also drew a number of other conclusions.
“It is clear from our findings of fact that there was more than one way to provide funding to the football club and that one of the reasons that Mr Sullivan chose to provide funds to the football club in the specific way that transpired was so that the appellant (Sullivan) could claim a capital loss,” she said.
“Therefore we consider securing a tax advantage to have been ‘one of the main purposes’ of the arrangements.”
The director general for customer compliance at HMRC, Penny Ciniewicz, said in a statement that Congate Ltd, Mr Sullivan’s family business, “built tax structures to avoid paying the tax that was rightfully due”.
West Ham United are currently battling against relegation from the Premier League, sitting 17th in the table having lost four of their last five matches under manager David Moyes.
5th April 2018 Real Business Rescue recalls some iconic high street names which have unfortunately deserted us in recent years. How many can you remember? And who might be next?
29th March 2018 The group which owns Bargain Booze is on the brink of entering administration after failing to raise the emergency funds required to resolve a severe cash flow crisis.
29th March 2018 The government has outlined a series of proposals that it hopes will help to tighten up rules around corporate governance in insolvency scenarios throughout the UK.
28th March 2018 David Sullivan, the co-owner of West Ham United, has been adjudged at a tribunal to have used the football club to avoid paying £700,000 in taxes. The matter relates to a £2 million transfer of funds
22nd March 2018 Carpetright is looking to close some of its most unprofitable stores as it considers entering a company voluntary arrangement (CVA) rescue deal to avoid becoming the next British high street retailer
Every day we help companies just like yours turn things around against seemingly impossible odds, regardless of your situation we can help. Find your nearest office today.