Wednesday 17 December 2014

Scarlets - Palpitations in County Hall

There was some confusion on Monday morning regarding a winding-up Order listed in the High Court for the Llanelli based regional rugby club, the Scarlets. HMRC had brought the case suggesting it related to an unpaid tax bill. The press reported that the bill must have been paid as HMRC withdrew the case.

Later in the day the Scarlets issued a statement saying that HMRC had made a mistake, there was no tax bill, the club knew nothing about the hearing which was merely the taxman officially withdrawing the case. This is not unknown of course.

Due to annual heavy losses, or at least the capacity to offset any profit, the club does not pay any corporation tax (or rent for that matter) so presumably if they'd been sent a tax bill for that, they would have noticed immediately. Whether the mix-up related to tax and NI contributions for staff and players isn't known.
HMRC are refusing to comment citing client confidentiality

Whatever the confusion was, it seems that all was well in the end.

This incident, prior to the all-clear later on, must have sent a few palpitations through County Hall, Carmarthen.  Given the precarious nature of the club's finances, a net loss of over £600,000 according to the most recent accounts and an excess of liabilities over assets of £3.5m, the question of what would happen to the stadium should the receivers ever be called in must have flashed through several executive minds... and one in particular.

The council have said in the past that as the stadium is leased to the club, if the Scarlets went pop, it would revert back to the council. All well and good if that is the case but the council would then be saddled with a large useless stadium, in which they had invested millions, which they would then have to market or maintain (which they do anyway).

The stadium appears in the Scarlets' accounts as a fixed tangible asset worth £10m. As of course the council own the freehold, this figure must relate to the long 150 year lease, although the club's independent auditors have always questioned its value and presence as an asset given the 'material uncertainty' of the club as a going concern.

As it is of no use to anyone other than the Scarlets, it is really theirs to keep as long as they don't fold. With the current arrangement this £10m 'asset' is sent back and forth from County Hall to the Scarlets depending on which way the wind's blowing and who needs it on their CV.

Those who have observed council meetings will know that anyone who raises concerns over the council's financial involvement in Scarlets Regional Ltd is immediately, and unfairly, accused of knocking the team.

Whatever the mix-up was on Monday, it should act as a wake up call to the council to safeguard its assets and investments, which, when it comes to the Scarlets, have been extremely generous in loan interest deferments, back door subsidies and deductible expenses.


Entirely unrelated to the above, I noticed that @CarmsCouncil retweeted a tweet this morning highlighting the problems of alcohol fuelled violence. Very commendable.

However, only last week, @CarmsCouncil's Licensing Committee approved a licence for a new 'Bargain Booze' franchise in Lammas Street, Carmarthen.

This was despite Carmarthen Town Council objecting on the grounds that it was a 'hot-spot for anti-social behaviour', therefore aggravating the problems of alcohol fuelled violence...

1 comment:

Anonymous said...

Can anyone be surprised? There is no sense, integrity or will to do what is right and in the public interest.What on earth are these people thinking?
There is only one concern for them and that relates to themselves.