RUGBY league club Bradford Bulls has responded firmly to a winding-up petition lodged this morning by HM Revenue and Customs, saying it believes it "has been incorrectly lodged". more www.thebusinessdesk.com/yorkshir ... on=253059#

RUGBY league club Bradford Bulls has responded firmly to a winding-up petition lodged this morning by HM Revenue and Customs, saying it believes it "has been incorrectly lodged". more www.thebusinessdesk.com/yorkshir ... on=253059#

Winding up petitions are turning into HMRC's action of first resort in recovering corporate debts, even where that debt is under dispute.

Doesn't necessarily mean the money is actually owed.

But disputing the debt won't stop a company getting wound up. HMRC are entitled to proceed on what they think they know.

Oh yeah, I know. Just would be nice if HMRC took the time to establish whether something was actually owed before they tried getting businesses shut down.

Is there any consequence to HMRC if they incorrectly apply for a winding up petition? I ask because even if it's incorrectly applied for and no funds are actually outstanding it can still have a crippling effect on a business and the relationship it gas with its suppliers.

Rapidly turning into a department of the Ministry for S.M.E. Business Prevention!

Other than looking a bit daft in the local media when the petition gets thrown out by the judge? Not really.

That's why they are content to use them so widely. They claim it's as a last resort, but more often than not it's to pressure businesses into paying amounts of tax they potentially don't owe but don't have the stomach/resources to fight.

It is an abuse of the process to issue a winding up petition for a disputed debt. If the debt is genuinely disputed on legitimate grounds The Bulls can apply to restrain the petition and have it struck out as an abuse. They can claim the costs of such an application from the petitioner, in this case HMRC. It is not difficult, complex or particularly expensive for the Bulls to have this petition struck out if the debt is genuinely disputed, which i doubt it is.

HMRC were one of the biggest users of winding up petitions and bankruptcy petitions. During the recession they have scaled that back, it is assumed due to political pressure.

I very much doubt that HMRC would petition for a genuinely disputed debt.

Regardless, a petition is a class action on behalf of all creditors. It's purpose is not to collect the debt for the petitioning creditor (though in practice this is what it is used for). If a company cannot pay its debts as they fall due they should be liquidated before they incur further debts they cannot pay causing further damage to other creditors. The Bulls have caused damage to many creditors during their recent insolvent past.

Another route for the Bulls to avoid liquidation is to enter administration (yet again) which I suspect will happen shortly.

A sad state of affairs.

If you file all your tax returns there's much less scope for dispute. Insolvent/shambolic companies typically do not bother and HMRC are empowered to proceed regardless using their own (inflated) estimated figures. Cue belated cries of dispute from directors..

So this probably puts Lowes outburst and emotions after the game v Wakefield into a bit more context.

Bradford's financial stability and future was based on gaining promotion this year. A craziness worthy of Leeds United.

You'd think people would learn from that, wouldn't you?

I just don't get it. Why can't people learn from the likes of Hetherington, Lenagan, McManus, Davy and Fulton?

I understand that maybe the likes of Leeds, Wigan and Saints have advantages not available to every club ie recent and the potential for future trophies. But the likes of Cas and Huddersfield have built steadily over time.
I just don't get how club owners can't follow the obvious model. Build rather than gamble.
We've had too much gambling and speculation from RL clubs over the last 30 or so years, we don't need any more, it's what nearly killed us off. We need clubs to invest instead.

I think they need to speak to the teams you mention above, they are all running well now because huge investments were made into the foundations of the club. It takes more than throwing some money at a club to get some success. Koukash do example needs to look at the Leeds and Wigans etc to see that. Surely any business man would know that pumping money into a model that wasn't working before won't just make it work. Bradford needed to start again and do things slowly and correctly. Banking on coming back up straight away is one hell of a gamble, if they are struggling financially again it could be yet another step back for them