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The taxman is getting ready for a huge legal battle in the High Court over the Football and Premier League’s highly contentious insolvency rule in November…

Mr Justice Neway has set a court date aside of the 28th November in the High Court to allow HMRC to have the infamous football creditor rule squashed as they believe it is unlawful.

Currently, if a football club enters administration then all football creditors, such as managers, players and other clubs, are prioritised and paid in full with remaining funds divided amongst secured and unsecured creditors.

HMRC are said to be fed up with millionaire football players being allowed to take huge amounts from failing clubs leaving local businesses and creditors such as St John’s Ambulance, and of course HMRC themselves, being awarded almost nothing.

A spokesman for HMRC said:

“There is no legal basis for the football creditor rule. Non-football creditors are being seriously short-changed and enough is enough.”

The Premier League, however, has said it will ‘vigorously defend’ its position.

Previously, in 2004, HMRC took Wimbledon to the High Court when they were awarded a mere 30p in the £1 after the club ran up a £525,000 debt.

Although HMRC lost the case their stance on the matter has not changed

The Premier League are expected to argue that the football creditors rule ensures that failed clubs honour debts to competitor clubs and so the money stays in the industry and therefore contains the problem but it seems HMRC are ready to fight tooth and nail against the seemingly unfair rule.

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