Sainsbury's deal helps Southend United FC avoid administration
Tue 3rd Aug 2010 | Football Club Administration
Southend United Football Club has avoided administration yesterday after reaching a repayment deal with HM Revenue & Customs following a winding up petition from the tax office.
The club appeared before the High Court yesterday where it was ruled that existing debts at the club had been settled and future payments would be made on time.
HMRC petitioned at the High Court on 8 July for a winding up order at Southend United, and for the appointment of administrators over a £238,710 tax bill.
It’s understood that the club had signed a partnership with supermarket giant Sainsbury’s which help to secure the finance required to pay the club’s outstanding debts.
HMRC warned Southend United they would take the club to court again if the club failed to make future payments.
A spokesman for the tax office told Accountancy Age that ensuring tax is paid should be at the "centre of football's business strategy" as it should with all businesses.
“HMRC doesn’t initiate insolvency action against football clubs - or any other business - lightly but we will not hesitate to do so when that is the right way to protect the country’s tax revenues and other creditors from those who trade whilst insolvent and run up debts that they simply cannot pay,” the spokesmand said.
The deal with Sainsbury's includes building a new store on the Roots Hall site with the club moving to another stadium.
Southend Chairman Ron Martin said all costs at the club for the next 12 months had been "underwritten".
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