More than a dozen football clubs in the EFL have refused to pay millions of pounds to Her Majesty’s Revenue and Customs in November in protest at a lack of financial support for the national game from government.
Sportsmail understands clubs discussed the unprecedented move during November and up to 15 decided to take coordinated action by withholding PAYE contributions to the taxman.
They see it as an attempt to put more pressure on ministers to offer financial aid.
It follows an EFL decision last month to change the league’s rules so that teams will not be penalised with a transfer embargo if they do not meet their commitments to HMRC.
Fans returned to football grounds this week but it will be some time before games turn a profit
Football League clubs are in increasingly dire straits after fans were banned from grounds, except in test events, in response to the coronavirus pandemic.
Almost no fans have attended matches since March, slashing revenues, but since games are still being played club’s costs remain high.
While supporters have been allowed to return in small numbers this week, coronavirus restrictions mean many clubs have not yet opened their turnstiles and the numbers involved are unlikely to generate much, if any, profit.
The lack of income is pushing clubs to the brink of collapse and chairmen are furious government has supported the arts and other sports, but not football, and there is still no agreement on the long-awaited bailout from the Premier League.
Under coronavirus restrictions only 2,000 fans can attend in tier two and 4,000 in tier one
One chairman told Sportsmail: ‘Clubs have started to take matters into their own hands. There is a group now refusing to pay PAYE contributions.
”The clubs feel so badly let down. And you cannot pay what you do not have.’
Individual EFL clubs are believed to pay hundreds of thousands of pounds a month to HMRC and the chairman said the total amount withheld ‘would be into millions of pounds’.
Chairmen in the EFL believe Culture Secretary Oliver Dowden is under pressure from Boris Johnson to ensure no club is wound up as a result of the current crisis, which would damage the Conservative’s standing in marginal constituencies, and they hope this move increases the pressure.
15 clubs refused to pay HMRC in November in protest at a lack of government support
The government has found £1.5 billion of support for the arts and announced a £300m ‘winter rescue package’ for other sports affected by the absence of fans.
A spokesman for HMRC said that as far as the organisation was concerned no club had refused to pay its tax bill.
He added: ‘We’re supporting clubs with tax debt and stand ready to support those who are concerned about meeting their tax obligations.’
The financial problems faced by Championship and lower league clubs is compounded by the fact that the Premier League and EFL have still not finalised a support package for ailing teams.
This is despite the EFL chairman, Rick Parry, and Premier League Chief Executive, Richard Masters, being dragged over the coals by MPs at the Department of Culture Media and Sport Select Committee on November 10.
Culture Secretary Oliver Dowden has said there is enough money in football to support the EFL
At that meeting committee chairman, MP Julian Knight, described their efforts to agree a bailout as a ‘farce’.
But while the clubs would welcome support from the Premier League, many of them also hold the government accountable.
‘The government needs to take control of this,’ said the chairman. ‘Someone needs to say there has to be a rescue package.’
Committee chairman Julian Knight said Premier League efforts to support EFL are a ‘farce’
Culture Secretary Dowden has always maintained that there is enough money in football to provide clubs in the EFL with the support they need, pointing to the £1.2 billion top-flight clubs spent on transfers in the summer.
As long ago as October 14, Dowden told a DCMS Select Committee he had ‘received assurances’ from both leagues that clubs will not be allowed to collapse as many struggle to balance the books without crowds.
He said the Premier League has the ‘resources to stop that happening’ as he urged both sides to ‘get this deal over the line’. A point he has made since.
Charlton Athletic was one of the first EFL clubs to play in front of fans under new rules
And despite a view in the game that Dowden has less interest in the sport than other aspects of his portfolio, Whitehall officials insist he cares and spends a huge amount of time working on football-related matters.
Last month, The Times reported Dowden had spoken to HMRC about financial pressure in the lower leagues and asked the taxman not to push clubs into administration over unpaid taxes while fans are banned from grounds.
Dowden has been credited with negotiating the return of fans to elite sports venues, including football grounds, this week, which is much earlier than expected.
Rick Parry, chairman of the EFL ( left) and the Premier League’s chief executive Richard Masters (right) have appeared before MPs on the DCMS Select Committee
While numbers are limited under the government’s coronavirus restrictions to 2,000 in tier two and 4,000 in tier one, the move is seen as an important first step and it is hoped numbers will rise quickly as infection rates fall and mass testing and the vaccine are rolled out.
Furthermore, Sports Minister Nigel Huddleston has pointed out that football clubs have received support from government through the furlough scheme and other measures amounting to £1.5 billion.
Football clubs across the country have previously made arrangements with HMRC to defer tax payments. Those debts, which in November reached almost £80m, fall due at different points with some clubs repaying what they owe now, and others scheduled to pay back in 2021.