Hearts will robustly defend claims they owe £1.75 million in tax as they prepare to face an HMRC tribunal next month, writes Darren Johnstone.
The issue centres on arrangements made for players who have been loaned to Tynecastle from FBK Kaunas, a Lithuanian team also backed by Hearts owner Vladimir Romanov.
Hearts revealed the impending case in a brochure handed out to supporters about their bid to raise £1.79m through a share issue.
Since Romanov brought the club in 2005, an estimated 19 players have featured for Hearts as part of a loan agreement with Kanuas.
Captain Marius Zaliukas was initially on a temporary deal before making his stay permanent, while former players such as Bruno Aguiar and Marian Kello also moved to Edinburgh as part of loan agreements.
Privately, Hearts are keen to play down any comparison with the benefit trust scheme at Rangers, which is still being probed by the SPL.
Under the sub- heading "Risk Factors" in the brochure, Hearts state: "Heart of Midlothian plc are subject to a significant ongoing dispute with HM Revenue & Customs which, if it ultimately goes against the company, could have a dramatically negative effect on the company.
"Specifically, HMRC have claimed unpaid tax liabilities of circa £1.75m (excluding interest and penalties) in relation to the arrangements between the company and Kaunas FC in relation to certain players who were loaned to the company by Kaunas FC.
"The directors are attempting to robustly defend those claims, but the burden of proof is on the company and the tax will be payable unless the company are successful in challenging the claims. The claims will be heard by the relevant tax tribunal in November 2012."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article