With Hull FC negotiating a 10 year EBT tax bill of 2 million with HMRC to 1 million I'm not naive enough to think that Rovers have avoided any EBT debt but what sort of amount could we possibly be looking at for Rovers. Was EBT a loophole that was closed, if so when did it actually close? We joined the ESL in 2007 and the EBT story started to break in 2010 so will we be affected for only 3 years?

Don't worry about it mate. Owing the best part of £2M to the tax means you are "running at a pwofit" as James Rule says and having a robust business model as Mrs Barista says

Surely you mean "wunning at a pwofit"?

Closed in April this year but being applied retrospectively; we don't really have any info on how many clubs are involved but James Smailes said this week that pretty much all clubs were involved to some extent, and for Premiership football clubs the liabilities run into multimillions. The other outstanding tax point is on image rights where I think Leeds are still fighting a test case. Difficult time all round, but as you say, all other things being equal, Rovers exposure should be less.

ahh james smailes says..... it must be twue then!

As I am banned "sine die" on your boards for running rings round Paul M and making him look a fool,perhaps you can explain why some of your fans imagine that AP paid any money to take over the club. You must realise as an accountant, that a business with no fixed assets and with a potential £2million tax bill would not be worth a copper coin and the only deal open to the directors responsible is an offer to take over for say a penny and to take over the aforementioned substantial debts.

p.s. Taxi for Smales maybe?

Stoppit Stoppit you know the Coffee Cup will be on spouting some usless information about temperature rise in a tree stump on the Pitcairn Islands negating any wrongdoing in the hallowed halls of the KFC accounting department more formally known as the Imaginarium of Mrs B

A few points on this. You seem to be saying that AP paid £0 for FC. "It cost a significant amount of money," Adam Pearon told BBC Radio Humberside. "And there are obviously more funds to go into the club." "Significant" is a subjective term, and I've not seen the transaction documentation. But there is the small matter of "goodwill" to be considered as part of any acquisition. Pretty basic stuff, but never mind.

I'm not entirely sure what your point is here, as I think we are agreeing. I said that without AP sorting the tax liability out, IMO the club might have gone to the wall as the outgoing directors probably had little appetite to deal the issue, certainly not as proactively as Pearson thankfully seems to be doing. Pearson was well aware of the tax issue on acquiring the club; indeed it was something he mentioned very early on. I suspect we may also be facing further liabilities if there is a ruling against Leeds Rhinos in the image rights case.

As for the "taxi for Smailes" comment, I guess here you are implying that Smailes is incorrect in saying other clubs and sports are affected. Do you mean that FC are the only club in British sport to be impacted? Right, that does make the outgoing board look rubbish, then. Even more glad that Pearson's on the front foot to halve the potential liability. Lucky us.

Not sure how this helps address Easty's question. As usual, I'm the only one trying to provide relevant information.

Gosh, you're sailing close to the wind this morning. Are you saying there has been financial "wrongdoing" at FC? You do know that this liability arises from a change in the tax rules that is being applied retrospectively, don't you? Oh dear.

Perhaps you might want to address Easty's initial question, rather than trying to de-rail the thread.

=#FF0000without AP sorting the tax liability out, IMO the club might have gone to the wall
So was it a take over or a bail out?

I would think that being told of a large tax bill would cover AP's comments about a "significant" amount of money wouldn't you. Just for the record, how would you value it. I will stand by my original statement that about a penny would cover it having done due diligence, wouldn't you? As to good will, name a RL club that has ever made a substantial profit. Let's be honest, I love the game but I know where it stands in terms of financial strength. I am not saying about the purchase price to be vindictive, only realistic!

No club has much "real" value, in terms of tangible fixed assets, with the possible exception of Leeds. You might be right that AP paid £0 and just agreed to cover the tax bill, but I think it's a bit unlikely. What's clear is that FC has as good a potential as most clubs to make a profit for the following reasons:

- We've touched averages 13.5k gates in recent years, despite being bab on the pitch
- We have a more decent merchandise set-up that turns over £1m+, again, despite being bab on the pitch
- In that context, we probably have a turnover of ~£5m
- Outgoings are relatively fixed; £0.6m to the SMC for all the ground & matchday services; up to £1.65m on player wages
- That leaves quite a bit of cash to either spend on overheads or keep as profit.
- FC's fans respond well to success on the pitch. In 2005 we made a quarter of a million profit.

I think it's this that has led Pearson to invest. In relative terms, rugby is cheap compared to football in terms of player cost, and he could potentially get, say, 15k in at the KC on a regular basis for more investment in players and coaching than the previous board were able or prepare to make, but in relative to football quite a small amount. Whether we actually spent the cap under Hetherington now seems unclear, but if we did, it seems evident that we got poor value for money, exacerbated by a coach out of his depth. AP will have looked at future cashflows based on increased crowds (incentivised initially by pass and maybe gate, price reduction), associated increased merchandise sales driven by improved performances on the pitch through increased spend on coaching, players and youth development. It's a punt, based on potential and projections, but to me he seems to be doing quite a lot to actually make it happen.

Poor Easty. No one else seems to be answering him.

Probably because the topic is about as interesting as watching a dog wazz up a palm tree.

Bejesus this Croation keyboard is irritating.

When are you coming home? Are you missing your green tights and Brylcreem?

Rovers have no EBT issues to worry about, never used such an agressive tax policy.

Tomorrow.

Off out for a slap up fish supper later, this is the laziest I´ve ever been on holiday.

Brought the Brylcreem with me. I once went to Italy and left all my cosmetics at home, the only hair product I could find was a wax stick. After three days my hair was completely water proof, I could just wash it for an hour and then simply re style, took me about three weeks to get it all out.

Might go swimming in a bit. Rubbish at wimming me. Do frog arms and crawl legs. Ms. Terrorist used to be in a swimming club, think it was run by peadophiles as it was called The Binley Beevers.

So Mrs.B. Having done due diligence on Hull FC what would you give to take it over? You cannot value "potential" as you well know! I will stand by my valuation and the proviso that I would cover the known debts. Be aware that when the Allams took over City they had a cluase that any "unknowns" would be down to the previous owner, not that I am saying this is the situation at your club!!!

Still suffering the same basic failure to understand financials I see.

Oh great, 7 days since our season finished,and we are already into the annual "financial discussions". Can somebody wake me up in February, this is worse than going to work.

I don't even know what EBT stands for, so I can't answer Easty's questions. Maybe it stands for Easty's Boring Thread?

How would you define goodwill, then? It's "That part of business value over and above the value of identifiable business assets." NPV of future cashflows is a pretty standard way to value a business.

Tbf, Hartleystash has definitively answered the question- Rovers have zero exposure on tax issues. The rest is just people derailing the thread to have a go at me .

I'm glad our alleged new coach has a degree in Economics, maybe he can join in conversations on here!

I almost broke out into "My Perfect Cousin" then, but realised that would be de-railment.

I really hope that's true and that by reducing the HMRC debt by £1m he's effectively robbed it from hetherington's purse

Reet...
EBT is Employee Benefit Trust. Tax avoidance schemes - note 'avoidance' rather than 'evasion'. A loophole, the closure of which is being applied retrospectively. Which is a fairly tough stance from HMRC - perhaps reflecting our nation's indebtedness.

[urlhttp://www.contractorfriend.co.uk/contractor-news/view/hmrc-sound-death-knell-for-ebt-tax-avoidance-loan-schemes-578[/url

We don't know Rovers' level of liability - and as we haven't had a change of board, with the new wanting to rubbish the reputation of the old, I don't see any need for us to. (BTW Adam, if you really want to stick the boot in, I assume you could allow Paul Cooke to tell his story now.

)

Now that we're all on the same page, FC and Rovers fans alike, of deciding that aspiration isn't arrogance and investment isn't necessarily profligate, I see no reason for us to fall out.