Hearts agrees HMRC settlement

04.12.2012

Heart of Midlothian Football Club (Hearts) is today pleased to report that it has resolved a dispute with HM Revenue & Customs (HMRC) about liabilities to tax and National Insurance Contributions ("NIC") relating to the arrangement between Hearts and Kaunas FC whereby players were loaned to Hearts by Kaunas FC.

The resolution involves Hearts paying a total sum £1.2m in tax and NIC plus £300k of interest in staged payments to HMRC over a three-year period beginning in May 2013. Under the agreement with HMRC no penalties are payable. The tax tribunal hearing due to begin in November 2012 has been concluded without any evidence being heard.

Club director Sergejus Fedotovas said: "We are satisfied that this resolution provides the club with an opportunity to now move forward with certainty. We believe that the payment terms agreed with HMRC allow the club to manage repayments in a way that will not be detrimental to longer-term development of the club."

The final settlement figure is lower than the amount assessed by HMRC of £1.75m, excluding interest and penalties, (as stated in the club's Share Issue brochure) and brings to an end a contingent liability that has been highlighted in the club's annual accounts since 2009.

Hearts World