League One side Southend United are in a further legal battle with the taxman - just two months after taking it to the wire over the initial dispute. The Shrimpers have received another winding up petition from HMRC, who are taking the club to court over failure to pay their November and December tax bills.
Back in November, the Essex club had to settle a £2.135m outstanding tax debt to avoid being wound up in the courts and a statement issued by the club claims that the current petition is directly related to a dispute over whether the November sum was calculated correctly.
Southend assert that the taxman had miscalculated to the tune of £205,333.83 when they produced their November petition. Rather than discuss this with HMRC though, they have taken the bull by the horns and chosen not to make any PAYE or National Insurance contributions for the months of November and December.
By the time Southend wrote to HMRC on December 22nd, following it up with solicitor's letters on December 23rd and 24th, it would appear that HMRC's hackles had been raised enough to produce a fresh winding up petition.
Southend's Finance Director now plans to meet with HMRC next week, although Chairman Ron Martin claims that if HMRC continue their court action, he may apply to the court for an injunction against the taxman's actions whilst the matter is still under dispute.
Martin has accused HMRC of "sending out winding-up petitions against football clubs like confetti". The Guardian newspaper states that Southend currently join Portsmouth, Notts County, Cardiff City and Plymouth Argyle in being on the receiving end of court action from HMRC.
What should be interesting here is what line the Football League choose to take over the issue. The League have promised that clubs that fall behind with their tax bills will be placed under transfer embargos whilst the debts are being cleared, in an effort to appease an increasingly frustrated HMRC, who feel football clubs are taking them and the taxpayer for a ride. However, in this instance, who exactly owes who what is a little unclear, and so they may need to adopt an "innocent until proven guilty" stance in the dispute, unless they feel that Southend's decision to withhold payments before the issue is resolved constitutes a breach of the new Football League rule.
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15 January 2010 : 
