QPR fiddling the books?

[El Presidente]

It's disappointing that QPR have left it to the final possible day to submit their accounts. Normally a sign of lack of transparency.

https://www.dropbox.com/s/nrrlxlpg9le4qv7/Screenshot%202015-03-02%2012.50.04.png?dl=0

 

[El Presidente]

Shirley it's a taxable gain though and would need to be disclosed as such?

I'm not a tax guru, but can't see how it is a gain, and even if it is, QPR's brought forward losses would dwarf it so no tax to pay.

 

[Tom Hark Preston Park]

Dodgy (book)keeper?

 

[seagullsovergrimsby]

Woolier than a mammoth during a particularly cold spell I suspect.

Given that the FL have effectively shown the white flag to FFP from next season, by allowing £39 million of losses over 3 seasons, perhaps they didn't fancy a fight with Fernandes' very expensive lawyers over the issue.

I am aware that there have been discussions between QPR and the FL for some time, suspect this is a cop out that suits both sides, QPR pay a small FFP fine if they go down, and the FL try to take the moral high ground by showing some money has gone to charity.

Is the Fair Play Tax going to charity about £760k based on them failing FFP by £1.8M ? Lose more than £10M and the Fair Play Tax is set at 100%

 

[rool]

I'm not a tax guru, but can't see how it is a gain, and even if it is, QPR's brought forward losses would dwarf it so no tax to pay.

Dunno, and there's no way I'm wading back through my old dusty ACCA s4it. I just can't see, or remember, how you can just change reserves without some kind of P&L disclosure.
Anyway, the whole thing boils down to how watertight the FA have made their allowables and disallowables regarding FFP rather than how company accounts are produced.

 

[KZNSeagull]

Without wanting to turn this into a double entry wankfest (I do have the film of the same name BTW), I would Cr Reserves, the write off has nothing to do with trading.

There is no way QPR have made a clean fist of these accounts.

 

[Mr Bridger]

There is no way QPR have made a clean fist of these accounts.

what have they spunked all their money on?

 

[beorhthelm]

But Forest have pumped in £500m over 10 years and called it stadium sponsorship.

this illustrates the point, Forest felt they had to get around the rules under the pretense of sponsorship, which is a reasonable source of income. obviously its far too much but they can argue that its to secure a future where they are in the Premier League and the deal worth more, blah. blah, in order to cover the reasonableness. as i understood it, income from sponsorship etc has to be at "market rates", now obviously the market can create its own rate to an extent, but they have to keep it looking... reasonable. yes, woolly indeed. this loan write off drives a coach and horses through the whole charade.

 

[KZNSeagull]

Is the Fair Play Tax going to charity about £760k based on them failing FFP by £1.8M ? Lose more than £10M and the Fair Play Tax is set at 100%

761k is correct for a loss of 1.8m over the 8m allowance. 100% once losses are 10m over the allowance, so if their loss is actually 69m, the fine would be 57,681,000 by my reckoning. Quite a difference!

 

[Pondicherry]

OK, what I dont fundamentally understand is how is writing off loans for £60 million (by shareholders), is not the same as shareholders funding losses above (in this case) the £5 million limit for last season?

 

[Hampster Gull]

Football is a cesspit. We were involved in a small way only recently.

 

[NooBHA]

The club could backdate an invoice for sponsorship. I really can't see HMRC ever complaining about a business using creative accountancy to convert a director's loan into income as surely it moves a very large sum of money from a non-taxable event to a taxable event. Saying that, I'm not sure what the position is if it's treated as a gift from the director. HMRC guidance is vague (of course!)

http://www.hmrc.gov.uk/manuals/bimmanual/bim41810.htm

This could well be a key point that makes a gift taxable:

if the character in the recipient's hands is that of a payment made in order that the money may be used in the recipient's business, to supplement trading or other business receipts and to enable the recipient to carry on business, or otherwise to preserve and maintain trading stability and solvency, then it will be a taxable trading receipt

What didderence doe it make to HMRC, the level of the loss. if the loss is £1 they get zero Corporation Tax. if the loss is £100million they get zero Corporation Tax. It makes a difference to the loss carried forward or back a year but that has no relevance to HMRC if there is a loss every year.

The only thing HMRC get money on from most football clibs is VAT on the movement of monies/income.

Writing off losses don't affect the profit and loss account unless interest is being paid on the loans but most football club owners invest in clubs in the form of interest free loans, so that should not affect the profit and loss account. They do affect the Balance Sheet in the Company accounts.

I think the fair play rules are not affected by the level of losses. I am not 100% certain but i thought they were governed by a clubs income/revenue in relation to what they pay in salaries to players and that determines whether they breach the fair play rules or not - if that is the case then their year in the Championship they could have broken the rules but i think if they can indicate that within the subsequent 18 monthes that they have rectified the situation then they can be given a reprieve. Thats the bit I am not so sure on as to what constitutes haveng rectified the situation.

 

[El Presidente]

I think the fair play rules are not affected by the level of losses. I am not 100% certain but i thought they were governed by a clubs income/revenue in relation to what they pay in salaries to players and that determines whether they breach the fair play rules or not

You're wrong, you are confusing the rules for League 1 and League 2 with those of the Championship.

 

[El Presidente]

761k is correct for a loss of 1.8m over the 8m allowance. 100% once losses are 10m over the allowance, so if their loss is actually 69m, the fine would be 57,681,000 by my reckoning. Quite a difference!

Agreed, QPR fiddle books to cheat charities of £57 million should be the heading!!

 

[Buzzer]

What didderence doe it make to HMRC, the level of the loss. if the loss is £1 they get zero Corporation Tax. if the loss is £100million they get zero Corporation Tax. It makes a difference to the loss carried forward or back a year but that has no relevance to HMRC if there is a loss every year..

You're right that it reduces the net loss for the year but occasionally football clubs do make profits and then those get offset against accumulated losses so it's very much in the interests of HMRC to reduce accumulated losses to as small a figure as possible.

 

[NooBHA]

I did say I wasn't sure so I stand corrected - Then i don't see how a loan write off can affect the level of losses unless interest in large amounts was being paid on the loans

 

[NooBHA]

You're right that it reduces the net loss for the year but occasionally football clubs do make profits and then those get offset against accumulated losses so it's very much in the interests of HMRC to reduce accumulated losses to as small a figure as possible.

I presume you mean get set off against profits. Thats true but very few football clubs turn a profit quite deliberately. I bet from 92 football leagues you won't find more than 20 turning a profit and almost none in the top divisions with wages as they are.

HMRC ar more than happy to accept this, quite simply because transfer fees are deemed as income and given that it is the transfer fees which often cause the losses, it has a double edged sword in that HMRC gets VAT on the transfer fees as ''Turnover/Income''

 

[Hotchilidog]

This is the death knell for FFP surely? All the money money Fernandes has written was spent on overpaid players, not infrastructure. This renders the entire process utterly pointless.

Whilst we are in debt to Bloom, the bulk of his money as all gone into the stadium and the training facility leaving us with very little wriggle room as regards transfer fees. So it now appears that benevolent owners are indeed free to fritter away away as much of their own cash as long as the club do not pay it back. Madness!

 

[NooBHA]

what have they spunked all their money on?

''Rosie'' (the dog) Redknapp

 

[Kinky Gerbil]

This is the death knell for FFP surely? All the money money Fernandes has written was spent on overpaid players, not infrastructure. This renders the entire process utterly pointless.

Whilst we are in debt to Bloom, the bulk of his money as all gone into the stadium and the training facility leaving us with very little wriggle room as regards transfer fees. So it now appears that benevolent owners are indeed free to fritter away away as much of their own cash as long as the club do not pay it back. Madness!

I wonder if Champions League clubs will go down the same path, or if it's more water tight.