CBRammette Posted July 27, 2020 Share Posted July 27, 2020 Furlough pay is treated as the club's income for accounting per HMRC guidance and staff still pay tax/NI on it. Its open to all employers affected by covid with a UK bank account and PAYE scheme. EFL cant now punish employers for using it. Link to comment Share on other sites More sharing options...
Gaspode Posted July 27, 2020 Share Posted July 27, 2020 11 minutes ago, Tamworthram said: I think wherever you heard that rumour/suggestion from you should cross off you "reliable source" list.? The suggestion came from Barnsley (and possibly Preston) who were whinging that it was unfair. Pair of tin-pot outfits that no one should pay any attention to.... Link to comment Share on other sites More sharing options...
RandomAccessMemory Posted July 27, 2020 Share Posted July 27, 2020 I'll forewarn people that this is a long post, anyone that's not interested in the 'speculation' or 'chatter' on this thread will likely want to scroll straight past. After my post the other day when I suggested that the fair market value clause was the only aspect I could see that was debatable as to where the EFL's "mistake" could have been made, I had a look for more information on it. I read the sections of FRS 102 that are relevant, I found that the EFL's 'Fair Market Value' descriptor is basically the 'fair value' one mentioned in there. https://www.frc.org.uk/document-library/accounting-and-reporting-policy/2018/frs-102-frs-applicable-in-the-uk-and-republic-of-i (The March 2018 one - as the sale was June 2018 and the others are dated after that - from here https://www.frc.org.uk/search?searchtext=frs+102&searchmode=anyword if the above link doesn't work) Quote 1.1.8 Fair Market Value means the amount for which an asset could be sold, licensed or exchanged, a liability settled, or a service provided, between knowledgeable, willing parties in an arm’s length transaction. Quote fair value The amount for which an asset could be exchanged, a liability settled, or an equity instrument granted could be exchanged, between knowledgeable, willing parties in an arm’s length transaction. In the absence of any specific guidance provided in the relevant section of this FRS, the guidance in the Appendix to Section 2 Concepts and Pervasive Principles shall be used in determining fair value. As per the quote above, there is guidance in the relevant section. From the club accounts, it appears (since the 2007 revaluation) to have been held under the revaluation model. Quote Revaluation model 17.15B Under the revaluation model, an item of property, plant and equipment whose fair value can be measured reliably shall be carried at a revalued amount, being its fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations shall be made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period. 17.15C The fair value of land and buildings is usually determined from market-based evidence by appraisal that is normally undertaken by professionally qualified valuers. The fair value of items of plant and equipment is usually their market value determined by appraisal. The Appendix to Section 2 Concepts and Pervasive Principles provides further guidance on determining fair value. 17.15D If there is no market-based evidence of fair value because of the specialised nature of the item of property, plant and equipment and the item is rarely sold, except as part of a continuing business, an entity may need to estimate fair value using an income or a depreciated replacement cost approach. The previous two valuations 2007 and 2013, both said they were on a depreciated replacement cost (DRC) basis. Prior to 2007 it looks to have been held at cost (+ any additions). The stated value for the December 2007 revaluation was £55m. If the 2018 £81.1m valuation for the sale was also done on a DRC basis, then this is acceptable as 'fair value' according to that section of FRS 102. Also it appears from the 2008 accounts (2007 revaluation), that as the name suggests the DRC value effectively includes any prior depreciation, as there was a revaluation adjustment on the depreciation of minus £5.407m, a new charge for the period of £1.076m and a total of £1.302m. The depreciation disposed of in 2018 for the sale was around £14.5m. According to an inflation calculator, that alone takes £55m in 2007 to around £75m in 2018, so I don't understand where the press speculation of a valuation obtained by the EFL of around £49m has come from. Link to comment Share on other sites More sharing options...
sage Posted July 27, 2020 Share Posted July 27, 2020 i thought the new EFL valuation was £60m Link to comment Share on other sites More sharing options...
RandomAccessMemory Posted July 27, 2020 Share Posted July 27, 2020 It may well have been, I got it from the Daily Mail, so not necessarily accurate. https://www.dailymail.co.uk/sport/football/article-7917941/Premier-League-probe-Aston-Villas-56million-stadium-sale.html Quote Villa Park was sold for £56.7m, much less than the £80m Derby banked for the sale of Pride Park, valued by the EFL at around £49m. Actually, Telegraph too were quite similar https://www.telegraph.co.uk/football/2020/01/16/Derby-county-faces-possible-points-deduction-efl-charges-club/ Quote But it is understood the EFL carried out an independent review of the stadium in November and the valuation was significantly lower at around £50m. Link to comment Share on other sites More sharing options...
Gringo Posted July 27, 2020 Share Posted July 27, 2020 https://sports.yahoo.com/efl-urged-resolve-legal-charges-141549172.html Link to comment Share on other sites More sharing options...
RadioactiveWaste Posted July 27, 2020 Share Posted July 27, 2020 I understand part of the valuation contention is our valuation included speculative added value (turning into a concert venue throughout the football season, east stand shopping and leisure expansion, planning applications etc) - Mel also paid the taxman at our valuation. Link to comment Share on other sites More sharing options...
RandomAccessMemory Posted July 27, 2020 Share Posted July 27, 2020 3 minutes ago, RadioactiveWaste said: I understand part of the valuation contention is our valuation included speculative added value (turning into a concert venue throughout the football season, east stand shopping and leisure expansion, planning applications etc) - Mel also paid the taxman at our valuation. There's a quote from Mel when he was on TalkSport that says that wasn't the case. https://www.hartlepoolmail.co.uk/sport/football/Derby-county-owner-mel-morris-hits-back-middlesbroughs-financial-complaint-581132 Quote “But the bottom line is we approached this thing very professionally 18 months ago when we looked at utilising the stadium for other purposes. “If we solve the problem of the weather and the grass we have the opportunity to use the stadium for a variety of different events. “The valuation of the stadium was not based on that, it was as a football stadium. When you put a roof on and are able to cover the pitch, the value of the stadium would rocket even further. Interesting how in September 2019 he said it all started "18 months ago", so around March 2018. Link to comment Share on other sites More sharing options...
G STAR RAM Posted July 27, 2020 Share Posted July 27, 2020 34 minutes ago, RadioactiveWaste said: I understand part of the valuation contention is our valuation included speculative added value (turning into a concert venue throughout the football season, east stand shopping and leisure expansion, planning applications etc) - Mel also paid the taxman at our valuation. Not sure where you got the highlighted bit from but very much doubt it is correct. Link to comment Share on other sites More sharing options...
CBRammette Posted July 27, 2020 Share Posted July 27, 2020 16 minutes ago, G STAR RAM said: Not sure where you got the highlighted bit from but very much doubt it is correct. He is correct that the other side of the transaction must have been recorded and reported officially on Mel's side but we wont know how he has dealt with the transaction personally and what he has had to report within another entity or to HMRC at this stage. Only his personal advisers would know that but perhaps Radioactive is or knows one of them or an HmRc inspector who is not great on client confidentiality! Link to comment Share on other sites More sharing options...
Rev Posted July 27, 2020 Share Posted July 27, 2020 44 minutes ago, G STAR RAM said: Not sure where you got the highlighted bit from but very much doubt it is correct. I think that comes from Mel's interview on Talksport at the beginning of the season, where he mentioned the EFL would be the least of his worries if he'd overvalued and then overpaid for the stadium. In that scenario he pointed out that HMRC would be on his case before the EFL. Link to comment Share on other sites More sharing options...
G STAR RAM Posted July 27, 2020 Share Posted July 27, 2020 37 minutes ago, CBRammette said: He is correct that the other side of the transaction must have been recorded and reported officially on Mel's side but we wont know how he has dealt with the transaction personally and what he has had to report within another entity or to HMRC at this stage. Only his personal advisers would know that but perhaps Radioactive is or knows one of them or an HmRc inspector who is not great on client confidentiality! I cant think of any tax that would have been paid on the transaction. Link to comment Share on other sites More sharing options...
RAMS1992 Posted July 27, 2020 Share Posted July 27, 2020 5 minutes ago, G STAR RAM said: I cant think of any tax that would have been paid on the transaction. Stamp duty? Link to comment Share on other sites More sharing options...
duncanjwitham Posted July 27, 2020 Share Posted July 27, 2020 2 minutes ago, G STAR RAM said: I cant think of any tax that would have been paid on the transaction. From my limited understanding, I don’t think it’s tax on the transaction so much as fiddling the profit/loss of the companies involved (and therefore potentially avoiding corporation tax). We reported a £25m profit that season, and presumably paid tax on that. If Mel had sold the stadium for what the EFL value it at (and £30m under what we value it at), that taxable profit would have all disappeared. (Just to repeat, I’m not an expert etc etc) Link to comment Share on other sites More sharing options...
G STAR RAM Posted July 27, 2020 Share Posted July 27, 2020 1 hour ago, RAMS1992 said: Stamp duty? Not if the transaction is between group companies. Link to comment Share on other sites More sharing options...
G STAR RAM Posted July 27, 2020 Share Posted July 27, 2020 1 hour ago, duncanjwitham said: From my limited understanding, I don’t think it’s tax on the transaction so much as fiddling the profit/loss of the companies involved (and therefore potentially avoiding corporation tax). We reported a £25m profit that season, and presumably paid tax on that. If Mel had sold the stadium for what the EFL value it at (and £30m under what we value it at), that taxable profit would have all disappeared. (Just to repeat, I’m not an expert etc etc) The football club has huge taxable losses, not much likelihood of us paying any tax in the foreseeable future! Link to comment Share on other sites More sharing options...
CBRammette Posted July 27, 2020 Share Posted July 27, 2020 1 hour ago, G STAR RAM said: I cant think of any tax that would have been paid on the transaction. Didnt say tax paid I said reported - sometimes disclosures made of transactions to HMRC even when no tax due Link to comment Share on other sites More sharing options...
duncanjwitham Posted July 27, 2020 Share Posted July 27, 2020 22 minutes ago, G STAR RAM said: The football club has huge taxable losses, not much likelihood of us paying any tax in the foreseeable future! My (again, limited) understanding was that it was to do with general HMRC rules about non-arms-length transactions having to be done at fair market value to avoid fiddling profit/losses. So whether we actually altered our tax position in this specific case doesn’t really matter, the rules say we had to sell at that value, so we did. Link to comment Share on other sites More sharing options...
G STAR RAM Posted July 27, 2020 Share Posted July 27, 2020 43 minutes ago, CBRammette said: Didnt say tax paid I said reported - sometimes disclosures made of transactions to HMRC even when no tax due The original post I questioned said "Mel also paid the taxman at our valuation" Link to comment Share on other sites More sharing options...
Mucker1884 Posted July 28, 2020 Share Posted July 28, 2020 I’m so glad I requested a name change for this thread. Its a lot more interesting now! ? Link to comment Share on other sites More sharing options...
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