[Football] The cost of promotion: Wolves had losses of £1,200,000 a week last season

[Gazwag]

Surely we are heading for 20 million profit for this season if we finish 15th again ? We spent roughly the same in transfer fees as last season. We had to spend around 10 million for stadium improvements to comply with Premier league rules. We had a profit of 11 million last season and so 20 million isn't unreasonable and we are still in the cup. Prize money in each round has gone up quite a bit.

The money we had to spend on improvements were probably treated as capital expenditure and therefore only the depreciation would be a cost in the accounts for last year so a similar amount would also show this year.

 

[SAC]

FFP is working in that Championship clubs are not going bust. However in the first year of FFP in the Championship, Swiss Ramble reported that 6 clubs made a profit and 16 broke FFP rules for the first year. The maximum loss was Leicester at just shy of £30 million. Compare that to now where no clubs made a profit and Wolves lost £63 million and most appear to be keeping to FFP rules. So, perhaps not quite working.

 

[Leekbrookgull]

Well done Burton Albion.

 

[Triggaaar]

I find it funny that we judge other clubs, despite racking up massive losses and just staying within FFP.

We were losing about £15m a year, and were not one of the top spenders in the division. Wolves lost £63m, and to be honest I wouldn't be surprised if that figure was artificially low.

 

[Acker79]

[tweet]1102701519567314944[/tweet]

 

[Weststander]

I agree it is hard to do. The variance between clubs is startling; Watford can up with modest cumulative losses of a few million, while their last accounts show they re profitable with £3mill+ of shareholder's funds. The ability to make chunks out of cumulative losses at our level is to be able to sell a player for £40mill and replace him with a cheaper but equally effective replacement.

It's interesting that Palace, Watford and Bournemouth have all kept keys players like Zaha, Deeney and Wilson and all three clubs are comfortable in this division.

Good examples. Those three are willing to pay greater wages than us:
Palace up to £130k a week (Club annual payroll costs £112m)
Watford £100k (Club £75m)
Bmuff £70k (Club £72m)

BHAFC £50k (Club £78m)

I haven’t got a clue how CP afford such wages, where to all intents, club income is similar.

 

[Surrey Phil]

I think I’m losing touch when it comes to financial matters in football but £63m loss in one season outside the top level seems insane! Sooner or later, there’s going to be a big fall, if these levels of losses continue.

 

[LlcoolJ]

Good examples. Those three are willing to pay greater wages than us:
Palace up to £130k a week (Club annual payroll costs £112m)
Watford £100k (Club £75m)
Bmuff £70k (Club £72m)

BHAFC £50k (Club £78m)

I haven’t got a clue how CP afford such wages, where to all intents, club income is similar.

They can't. It's why they are losing money.

 

[Kaiser_Soze]

I don't have an issue with clubs making such losses.

The Overseas investment it brings into the British Economy is good for the country.

What I do have an issue with is the FFP Rules - They should be either scrapped or enforced in a more timely manner

Most of their player purchases were foreign players so the transfer fee goes out the country. The wages go out the country if the player is foreign. The agents fees go to Jorge Mendes. What actual investment have Wolves actually made?

 

[Weststander]

Most of their player purchases were foreign players so the transfer fee goes out the country. The wages go out the country if the player is foreign. The agents fees go to Jorge Mendes. What actual investment have Wolves actually made?

This. One way or other, the bulk of the cash flows back out again to Portugal or agent/player accounts in tax havens.

The main exception being HMRC taking a large cut of wages paid.

 

[LlcoolJ]

This. One way or other, the bulk of the cash flows back out again to Portugal or agent/player accounts in tax havens.

The main exception being HMRC taking a large cut of wages paid.

Yep. No doubting that when people spit feathers about player wages they forget the fact that a MASSIVE chunk is going to the government.

Image rights etc bullshit aside. But that does seem to be have been policed a bit better too.

 

[NooBHA]

They can't. It's why they are losing money.

The money they bought them with came into the country from abroad initially and they are paying wages which are spent in the UK

 

[NooBHA]

Sorry I quoted the wrong post there

 

[LlcoolJ]

The money they bought them with came into the country from abroad initially and they are paying wages which are spent in the UK

I was replying to a post about Palace and their wages.

Edit - no worries!

 

[edna krabappel]

Yep. No doubting that when people spit feathers about player wages they forget the fact that a MASSIVE chunk is going to the government.

Image rights etc bullshit aside. But that does seem to be have been policed a bit better too.

I bet it bloody isn't. The more you earn, the less tax you pay, seems to be the rule here. The top earners always find a way to minimise their tax bill.

 

[LlcoolJ]

I bet it bloody isn't. The more you earn, the less tax you pay, seems to be the rule here. The top earners always find a way to minimise their tax bill.

PAYE is a non sum game these days. It's one of the few loopholes HMRC have managed to mostly close. Shouldn't be difficult really as it's "Person gets paid X per month and pays Y in tax as per the law".

The Rangers case for example was one of the things that brought RTI in and that changed the game (tax game, not football).

I don't work in the area but I would be amazed if most players are not paid their wages now through normal PAYE rules. Sponsorship, image rights etc are a separate thing.

El Pres will know way more but players are classed as employees so I can't see a way round the HUGE tax bill for the individual or the club?

Fag packet figures here...

https://www.moneywise.co.uk/news/20...ier-league-footballers-pay-more-1-billion-tax

 

[Weststander]

PAYE is a non sum game these days. It's one of the few loopholes HMRC have managed to mostly close. Shouldn't be difficult really as it's "Person gets paid X per month and pays Y in tax as per the law".

The Rangers case for example was one of the things that brought RTI in and that changed the game (tax game, not football).

I don't work in the area but I would be amazed if most players are not paid their wages now through normal PAYE rules. Sponsorship, image rights etc are a separate thing.

El Pres will know way more but players are classed as employees so I can't see a way round the HUGE tax bill for the individual or the club?

Fag packet figures here...

https://www.moneywise.co.uk/news/20...ier-league-footballers-pay-more-1-billion-tax

Newcastle United, some other clubs and some players are currently being investigated for systematic abuse of the PAYE system, for alleged criminal tax evasion. HMRC’s raids were later validated as reasonable by The High Court, after Newcastle challenged them.

All under wraps at present.

 

[ac gull]

Burton made a profit last season and apart from five minutes of inept Forest defending at Bolton nearly stayed up

https://www.burtonalbionfc.co.uk/news/2019/march/0203-accounts/

 

[NooBHA]

Newcastle United, some other clubs and some players are currently being investigated for systematic abuse of the PAYE system, for alleged criminal tax evasion. HMRC’s raids were later validated as reasonable by The High Court, after Newcastle challenged them.

All under wraps at present.

No that's not true. That's not what the Investigation is all about. It was with Rangers and they lost because they were treating wages as loans and then writing them off . Thus paying tax but not NIC. H MRC rightly won that one but they weren't the only club experimenting with BV that test. The only difference being the others settled without going to court. Rangers couldn't afford to pay so they fought it. I'm on HMRC side most of the time but there are occasions where their interpretation of tax law is unfair

 

[Weststander]

No that's not true. That's not what the Investigation is all about. It was with Rangers and they lost because they were treating wages as loans and then writing them off . Thus paying tax but not NIC. H MRC rightly won that one but they weren't the only club experimenting with BV that test. The only difference being the others settled without going to court. Rangers couldn't afford to pay so they fought it. I'm on HMRC side most of the time but there are occasions where their interpretation of tax law is unfair

I didn’t mention the old Rangers 1 and 2 cases at all. Yes, I aware that Rangers used EBT’s.

I did remember you btw, with your expert knowledge of all this through your profession.

These professional articles do mention tax evasion, and both income tax and NIC in the ongoing Newcastle and West Ham cases. Are they wrong?





Then again here in Newcastle’s paper: