Soccer-Hearts agree three year plan to settle tax dispute

Posted Tuesday, December 04, 2012 by YAHOO Sport

Hearts agreed on Tuesday to pay 1.5 million pounds ($2.4 million) over the next three years to settle a tax dispute as the debt-laden Scottish Premier League club try to clean up their finances.

The Edinburgh club cleared a separate tax bill of 450,000 pounds on Monday, lifting the immediate threat of liquidation.

Money is tight in Scottish soccer which is reeling from the downfall this year of 54-times champions Rangers who have been forced to relaunch from the fourth tier after collapsing under a pile of debt.

Hearts had been in dispute with the tax authorities over the treatment of players loaned to the team from Lithuanian club Kaunas. Lithuanian businessman Vladimir Romanov is the majority shareholder in Hearts and a number of players have moved between the two clubs in recent seasons.

In a statement on their website, Hearts said they would pay 1.2 million pounds in tax and national insurance contributions, plus 300,000 pounds in interest. Payments would begin in May 2013 and be spread over three years.

"We believe that the payment terms agreed with (tax authorities) HMRC allow the club to manage repayments in a way that will not be detrimental to longer-term development of the club," club director Sergejus Fedotovas said.

Hearts, who have debts of 24 million pounds, are hoping to raise more than one million pounds from a share issue this month, funds which the club hope will secure their short-term future.

Hearts are ninth in the 12-team Scottish Premier League and were knocked out of the Scottish Cup by city rivals Hibernian at the weekend.