We Need to talk about Worcester

[Al Bangor]

In many American pro sports they have profit sharing. If a team is in financial trouble the others will help out. Do they not do that in Premiership rugby?

 

[Scotty]

In many American pro sports they have profit sharing. If a team is in financial trouble the others will help out. Do they not do that in Premiership rugby?

Not many teams actually make money so no as most dont and each on is run like an individual business.

Its also not really a sustainable model the prem they rely heavily on rich owners in alot of cases.

 

[Al Bangor]

Not many teams actually make money so no as most dont and each on is run like an individual business.

Thank you for letting me know.

 

[LeinsterMan (NotTigsMan)]

Reality is pro Rugby in England is like a 10 team max thing (If that)

 

[die_mole]

from what I've read the previous clubs that have entered administration have just folded their professional setup and used their amateur setup as a launching off point for the phoenix club. Those were London Scottish and Richmond. London Welsh did that a couple of years ago but that was a liquidation that ended up with their assets going to the amateur side.

In 2009 London Welsh were allowed to continue in the championship with a 5 point deduction.

I want to know how clubs that are constantly in the red have a £6 million tax bill.

 

[McTallshort]

from what I've read the previous clubs that have entered administration have just folded their professional setup and used their amateur setup as a launching off point for the phoenix club. Those were London Scottish and Richmond. London Welsh did that a couple of years ago but that was a liquidation that ended up with their assets going to the amateur side.

In 2009 London Welsh were allowed to continue in the championship with a 5 point deduction.

I want to know how clubs that are constantly in the red have a £6 million tax bill.

Isn't a company (might be wrong) responsible for collecting it's employees PAYE and sending it to the tax man?

 

[Geordie]

Dodgy rumours coming about now of the owners asset strpping. Purchasing the car park at the stadium for £50,000 through one of their other companies.

And Ollie Lawrence tweeting Cowboy emojies...

 

[LeinsterMan (NotTigsMan)]

Is that asset stripping or trying to save it?

Depends what they plan to do with it.
It's worrying but could also be a sneaky way of keeping ****

 

[TRF_Olyy]

Training fields sold for £350k to a new company, as well - saw someone say that they were valued in the millions in the last accounts

edit:
It's the entirety of Sixways complex that's valued a 8 figures but gotta think that the carpark/training pitches are worth more than £400k

The day after Warriors were hit by legal action for unpaid taxes, the directors used another of their companies to purchase the club's car park, for just £50,000.

As well as being directors of WRFC Trading Limited, Colin Goldring and Jason Whittingham are also directors of a number of other companies, including Mq Property Ltd.

On Wednesday, 17 August Mq Property Ltd completed the purchase of the freehold of the club's car park. This was paid for with a loan from another company, Triangle Estate & Petroleum Ltd.

Separately in June, training pitches owned and used by Warriors were sold to a newly-created real estate company, Worcester Capital Investments Ltd, for £350,000.

The car park and pitches are sizeable parts of the Sixways site.

Warriors' accounts for 2020 state that as a whole the site had been independently valued at £16.7m. That estimate includes Sixways stadium; the freehold of which also now belongs to Mq Property Ltd.

Worcester Warriors battle to avoid administration

Worcester owners Colin Goldring and Jason Whittingham "work through options" as they bid to avoid the club going into administration over unpaid tax.

www.bbc.co.uk

Is that asset stripping or trying to save it?

Didn't their owner get banned from the legal profession for scamming millions out of a Saudi investment firm or something like that?

 

[Geordie]

I really hope its not dodgy shenanigan's but its not looking overly clever...

 

[TRF_Olyy]

 

[die_mole]

Isn't a company (might be wrong) responsible for collecting it's employees PAYE and sending it to the tax man?

yeah I'm hoping for @Bada-Bing! to chime in with some accounting stuff even if it's stuff he vaguely remembers from school.

Income tax would make sense for a large company. A couple of years of not paying would end up with a huge bill.

 

[EdBirch]

My thoughts exactly

 

[Bada-Bing!]

yeah I'm hoping for @Bada-Bing! to chime in with some accounting stuff even if it's stuff he vaguely remembers from school.

Income tax would make sense for a large company. A couple of years of not paying would end up with a huge bill.

Any UK business (company or unincorporated - Sole traders/partnership) that have employees (whom they pay above the lower earnings threshold - about £6.4k) would be liable to collect Income tax and NIC - class 1 Primary (employees) and also class 1 secondary (employer's) via PAYE and pay it over to HMRC each month on players' and staffs' wages. In Worcester's case WRFC Trading Limited would be responsible if they are Worcester's players' and staff's employers.

So looks to me like they will get the receivers in, eventually, to see if they can salvage the PAYE debt owed, by putting the company into "Administration" i.e. a receiver is appointed by HMRC to run WRFC Trading Limited instead of the Directors.
The receiver will see if they can rescue the company as a Going concern, get the cash/sell an asset(s) if they can and pay off the PAYE owed. And it they can't (after about 12 months or longer if court agrees) then HMRC would apply to the court for a Compulsory liquidation to wind up WRFC Trading Limited, which means selling off their realisable assets, pay off their creditors in a set order (secured creditors with fixed charges at the top and shareholders at the bottom). HMRC have recently become a preferential creditor for PAYE and VAT, so higher up the list of creditors to get their liability paid above other creditors.

So WRFC Trading Limited, which means Worcester RFC until it's parent company gets sorted, are in deep **** unless HMRC get paid.

 

[TRF_Olyy]

Worcester Warriors | A statement from The Owners

Official website of Worcester Warriors Rugby Club

warriors.co.uk

Doesn't really say much, which makes me think they're very much in the plop

 

[LeinsterMan (NotTigsMan)]

Worcester Warriors | A statement from The Owners

Official website of Worcester Warriors Rugby Club

warriors.co.uk

Doesn't really say much, which makes me think they're very much in the plop

"Options that Include keeping rugby at Sixways"

The Include part is worrying haha

 

[Bada-Bing!]

Also reading how other companies have bought the training ground and the car park sounds very dodgy - done to get secured creditor with a fixed charge status, no doubt, which would rank above HMRC in terms of collecting the PAYE debt on a winding up. It would be interesting to see who these other companies' shareholders and directors are from a legal and tax perspective. Also who owns the freehold to the stadium? Presumably WRFC Trading Limited?

 

[Lé Ddanno]

Isn't a company (might be wrong) responsible for collecting it's employees PAYE and sending it to the tax man?

PAYE, NIC and VAT.

Can 100% confirm official statement is Bullshit

The peculiar transactions can, and will, be attacked by Administrators if they have put creditors into a worse position as a result.

 

[die_mole]

the rearranging of creditors is one of the most vile things in my opinion. Really wish it governments went after it harder.

 

[TRF_Olyy]

Also who owns the freehold to the stadium? Presumably WRFC Trading Limited?

Looks like the clubs owners but under a different name:

As well as being directors of WRFC Trading Limited, Colin Goldring and Jason Whittingham are also directors of a number of other companies, including Mq Property Ltd.

On Wednesday, 17 August Mq Property Ltd completed the purchase of the freehold of the club's car park. This was paid for with a loan from another company, Triangle Estate & Petroleum Ltd.

Separately in June, training pitches owned and used by Warriors were sold to a newly-created real estate company, Worcester Capital Investments Ltd, for £350,000.

The car park and pitches are sizeable parts of the Sixways site.

Warriors' accounts for 2020 state that as a whole the site had been independently valued at £16.7m. That estimate includes Sixways stadium; the freehold of which also now belongs to Mq Property Ltd.

Unlike indebted WRFC Trading Ltd, Mq Property Ltd is not known to face a winding-up petition, yet it now owns the bulk of the land the club sits on.