I have seen three news reports upon yesterday's ten minutes in Court. From what I have read so far I must have been in a different place.
I would like to have made a Statement yesterday but by the time I'd finished with our Lawyers I had a consecutive meeting whilst in London and when that finished it was too late.
Here are the facts:
- The petition debt claimed by HMRC is £228,000. Allowing for a small credit this reduces the debt to £222,000
- We appealed to the Tribunals Service in January against some £162,000 of (we say) inappropriately applied surcharges. Remember the Club had surcharges applied in almost identical circumstances 4 years ago. We appealed then also and were credited some £70,000.
Petition Debt £222,000
Wrongly surcharged £162,000
________
Balance due £60,000
We put our solicitor in funds for the £60,000 ahead of yesterday's Hearing.
- Last week an amount of VAT became payable of £35,000. This together with the sum due from February's PAYE (£47,000) gave an additional very recent debt including some further surcharges of £89,000.
- At a meeting with our lawyers and barrister last week the advice was not to unnecessarily antagonise HMRC (which we have no wish to do in any event) and recommended that we continue with the appeal to the Tribunal but NOT to conduct our case through the court ie pay what is claimed now and seek a rebate through the Tribunal.
- HMRC also sought to claim an amount that will not become payable until 22 April in view of some wages being paid late. An officer from HMRC inspects the Club's books once a month and assessed the payment in advance.
In line with the recommendation, we will pay the sums required to settle this action and yesterday simply requested one month to arrange the additional funds for the Club as it continues to be heavily dependent upon its parent company. This will remain the case until the Club moves when further Revenue streams will enable Southend United to be both more progressive and sustainable. At the moment, to compete in League One it needs to invest more than it attracts in income.
Let's put this into perspective. We are arguing, because we are being forced to, about some £162,000 of what we say was an inappropriate penalty charge when I made the payment of £2.15 million in November. It is not in the Club's, and therefore supporters' interests, for me to turn a blind eye and accept that the penalties are rightly due. I would add that if we had not won the 2006 case that we consider to be very similar (accepting that each case is looked at its individual merit) then I wouldn't waste my time 'pursuing' this. However, BECAUSE we had already paid the penalty surcharge and offset this against subsequent sums due we now have to defend our actions. What would fans have me do… simply roll over.
In November I jumped through hoops in a very short timeframe to put a further investment of £2.35million in the Club (£2.15 to HMRC and a further £200,000 of working capital requirement). It wasn't put in by some fairy godmother. Sainsbury's may have written the cheque but ONLY against significant tangible security that I was able to put in place… They are not a charity. This was part of a wider transaction to deliver the Club's Stadium and Sainsbury's new store - a "partnership" that is well advanced.
My message to supporters of the Club is that I have a clear line of sight to deliver our mutual objectives and that is a new Stadium with increased income, capital investment and the ability to maintain a position in the Championship by fulfilling Southend United's potential.
I accept it's been a difficult season so far but - hey - it could have been a great deal worse … Crystal Palace and Portsmouth.
Remember your Club does not have an overdraft and is only indebted to its parent company, ie me.
Now is not the time to be focusing on the negative but pulling together behind the Club and the team as that is what really matters in all this.
I hope that supporters of the Club will do just that on Saturday against Exeter City.
Ron Martin
Chairman
