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I'm no qualified accountant - ME interest/tax breaks Q 08:44 - Dec 5 with 10656 viewsartsbossbeard

Right, so I think we finally put to bed the claims that ME charges ITFC interest on the loans last night BUT what's the craic with the "yeah, but he only owns the club for tax break reasons" statement oft bandied around?

It's for some copy & paste/online arguments reasons.

Thanks
ABB

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I'm no qualified accountant - ME interest/tax breaks Q on 08:53 - Dec 5 with 6782 viewswkj

Fake news... you know this wont put anything to bed. It is the quarterly game of "Dumb sh*t proven wrong" come back for another round.

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I'm no qualified accountant - ME interest/tax breaks Q on 08:53 - Dec 5 with 6789 viewsStokieBlue

Both arguments are nonsense.

If you have a loss making entity you can set aside those losses against tax but you're still losing more money than not having that entity.

It's just people wanting to have a moan.

SB

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I'm no qualified accountant - ME interest/tax breaks Q on 08:57 - Dec 5 with 6777 viewsfactual_blue

There is a small tax advantage in being able to reduce the total tax bill of a group of companies by transferring losses to another company in the group to offset against the second company's profit. But - certainly where we're not talking in billions - the tax saving is limited.

But it's 15-20 years since I did tax exams for my accountancy qualification, and I never used the knowledge in the real world, so I can't pretend I've summarised it precisely.

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I'm no qualified accountant - ME interest/tax breaks Q on 09:09 - Dec 5 with 6724 viewsLord_Lucan

I’ll explain in detail at our homo meal but the whole thing is ridiculous.

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I'm no qualified accountant - ME interest/tax breaks Q on 09:15 - Dec 5 with 6686 viewsBrightonBlue

I'm no qualified accountant - ME interest/tax breaks Q on 08:53 - Dec 5 by StokieBlue

Both arguments are nonsense.

If you have a loss making entity you can set aside those losses against tax but you're still losing more money than not having that entity.

It's just people wanting to have a moan.

SB


Exactly. There are tax efficiencies via offsetting these losses. But at the end of the day that entity is losing you money as SB says. So it would be more profitable to remove that loss making entity. I guess that’s the golden question. When does ME cut his losses. The premier league is his only way to make a return. That part of his plan is looking further away then ever at the mo.
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I'm no qualified accountant - ME interest/tax breaks Q on 09:21 - Dec 5 with 6659 viewsCoastalblue

I'm no qualified accountant - ME interest/tax breaks Q on 09:15 - Dec 5 by BrightonBlue

Exactly. There are tax efficiencies via offsetting these losses. But at the end of the day that entity is losing you money as SB says. So it would be more profitable to remove that loss making entity. I guess that’s the golden question. When does ME cut his losses. The premier league is his only way to make a return. That part of his plan is looking further away then ever at the mo.


Is even the PL a way to make a return now, unless the plan is to get promoted, take the money and run without reinvesting anything.

Most Premier League clubs operate on a knife edge, little different to us just with bigger sums involved, I'm not sure it's a very safe plan to make any money out of a club in the Premier League, especially if the club is not established there.

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I'm no qualified accountant - ME interest/tax breaks Q on 09:24 - Dec 5 with 6643 viewsdirtyboy

I'm no qualified accountant - ME interest/tax breaks Q on 08:57 - Dec 5 by factual_blue

There is a small tax advantage in being able to reduce the total tax bill of a group of companies by transferring losses to another company in the group to offset against the second company's profit. But - certainly where we're not talking in billions - the tax saving is limited.

But it's 15-20 years since I did tax exams for my accountancy qualification, and I never used the knowledge in the real world, so I can't pretend I've summarised it precisely.


You're spot on.

From memory, the situation was different in the beginning, I may be wrong on specifics surrounding ITFC, but I understood Evans was enjoying better tax breaks by charging interest on the loans as they'd never be repayable, also the holding company was in Bermuda, where interest received isn't taxable.

Let's be clear, it doesn't 'make' money anywhere, but certainly eases the tax he would have to pay in profitable group companies that were putting money across to ITFC.

Not sure why it stopped....probably because he was fed up with thick as sh*t fans moaning that he's creating more 'debt' for the club (which I really hope by now that they realise is no issue whatsoever).

What would be an issue is when we start owing external institutions which we don't currently.

Evans may not put in £20m a year which we'd all love, but he has put in £95m.....evidenced by the balance sheet.

He was apparently worth £700m when he took us over.

Thrown 13% of that into a football club as a hobby!
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I'm no qualified accountant - ME interest/tax breaks Q on 09:33 - Dec 5 with 6589 viewsOxford_Blue

It’s called “frustrated football supporters angry and looking to blame people for things they don’t understand themselves”
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I'm no qualified accountant - ME interest/tax breaks Q on 09:35 - Dec 5 with 6580 viewsBluefish

We live in a world where people think that brexit will be good so they will simply believe What they want. Ipswich were big once so we are therefore entitled to be still be big and in this day and age we should spend big.

I fail to see how a bloke with a business that is 100 million in debt that props it up and keeps it going with more losses each year can be seen as a disgrace for not spending more. The argument could be spend more will see a return but 50 million a season doesn't guarantee to get you out if this league. The detachment from reality is quite bizarre

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I'm no qualified accountant - ME interest/tax breaks Q on 09:39 - Dec 5 with 6570 viewsGuthrum

Losses are offset against profits, not tax liabilities. Business tax is not 100%. To save yourself £1 in tax by setting losses against profits elsewhere in the group, you have to lose roughly £5. Thus you are spending an extra £5 to save yourself £1.

If that expense is happening anyway, then it gives you a moderate kickback. But doing it deliberately would cost you five times as much as any saving.

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I'm no qualified accountant - ME interest/tax breaks Q on 09:45 - Dec 5 with 6542 viewsdirtyboy

I'm no qualified accountant - ME interest/tax breaks Q on 09:39 - Dec 5 by Guthrum

Losses are offset against profits, not tax liabilities. Business tax is not 100%. To save yourself £1 in tax by setting losses against profits elsewhere in the group, you have to lose roughly £5. Thus you are spending an extra £5 to save yourself £1.

If that expense is happening anyway, then it gives you a moderate kickback. But doing it deliberately would cost you five times as much as any saving.


Amen

I often say to clients, don't spend a pound to save 20p.

It's different on genuine investment, but let's not pretend a football club is ever going to make money!!!
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I'm no qualified accountant - ME interest/tax breaks Q on 09:45 - Dec 5 with 6545 viewsArnieM

I'm no qualified accountant - ME interest/tax breaks Q on 09:09 - Dec 5 by Lord_Lucan

I’ll explain in detail at our homo meal but the whole thing is ridiculous.


Genuine request:

I don’t suppose you’d have the time and be will to explain the situation on here for interested , but less qualified members please? I genuinely want to understand the mess ITFC are in and Evans approach to the situation.


Regards AM

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I'm no qualified accountant - ME interest/tax breaks Q on 09:47 - Dec 5 with 6532 viewsSikamikanico

I'm no qualified accountant - ME interest/tax breaks Q on 08:57 - Dec 5 by factual_blue

There is a small tax advantage in being able to reduce the total tax bill of a group of companies by transferring losses to another company in the group to offset against the second company's profit. But - certainly where we're not talking in billions - the tax saving is limited.

But it's 15-20 years since I did tax exams for my accountancy qualification, and I never used the knowledge in the real world, so I can't pretend I've summarised it precisely.


Not too shabby a summary. Currently the saving is 19% of losses
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I'm no qualified accountant - ME interest/tax breaks Q on 09:47 - Dec 5 with 6524 viewsOxford_Blue

I'm no qualified accountant - ME interest/tax breaks Q on 09:35 - Dec 5 by Bluefish

We live in a world where people think that brexit will be good so they will simply believe What they want. Ipswich were big once so we are therefore entitled to be still be big and in this day and age we should spend big.

I fail to see how a bloke with a business that is 100 million in debt that props it up and keeps it going with more losses each year can be seen as a disgrace for not spending more. The argument could be spend more will see a return but 50 million a season doesn't guarantee to get you out if this league. The detachment from reality is quite bizarre


Brexit might be a good thing - we don’t know.

Agree entirely on ME comments.
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I'm no qualified accountant - ME interest/tax breaks Q on 09:53 - Dec 5 with 6498 viewsGuthrum

I'm no qualified accountant - ME interest/tax breaks Q on 09:45 - Dec 5 by ArnieM

Genuine request:

I don’t suppose you’d have the time and be will to explain the situation on here for interested , but less qualified members please? I genuinely want to understand the mess ITFC are in and Evans approach to the situation.


Regards AM


Financially we are not especially in a mess, other than the endemic situation of running a football club in the modern Championship, where big losses are inevitable without additional sources of income (e.g. parachute payments) and it's all a matter of how much the owner can or will put in.

The ground has ahifted significantly in the last ten to fifteen years.

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I'm no qualified accountant - ME interest/tax breaks Q on 09:54 - Dec 5 with 6496 viewsPhilTWTD

I'm no qualified accountant - ME interest/tax breaks Q on 09:24 - Dec 5 by dirtyboy

You're spot on.

From memory, the situation was different in the beginning, I may be wrong on specifics surrounding ITFC, but I understood Evans was enjoying better tax breaks by charging interest on the loans as they'd never be repayable, also the holding company was in Bermuda, where interest received isn't taxable.

Let's be clear, it doesn't 'make' money anywhere, but certainly eases the tax he would have to pay in profitable group companies that were putting money across to ITFC.

Not sure why it stopped....probably because he was fed up with thick as sh*t fans moaning that he's creating more 'debt' for the club (which I really hope by now that they realise is no issue whatsoever).

What would be an issue is when we start owing external institutions which we don't currently.

Evans may not put in £20m a year which we'd all love, but he has put in £95m.....evidenced by the balance sheet.

He was apparently worth £700m when he took us over.

Thrown 13% of that into a football club as a hobby!


Interest on loans ended in 2012/13 for two reasons I was told. One, it's a bit pointless to charge interest under FFP as it reduces the amount you can spend and, two, there are worldwide debt cap rules relating to inter-group loans which meant interest could no longer be added. You'll probably understand the latter better than me.
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I'm no qualified accountant - ME interest/tax breaks Q on 10:00 - Dec 5 with 6463 viewsBluefish

I'm no qualified accountant - ME interest/tax breaks Q on 09:24 - Dec 5 by dirtyboy

You're spot on.

From memory, the situation was different in the beginning, I may be wrong on specifics surrounding ITFC, but I understood Evans was enjoying better tax breaks by charging interest on the loans as they'd never be repayable, also the holding company was in Bermuda, where interest received isn't taxable.

Let's be clear, it doesn't 'make' money anywhere, but certainly eases the tax he would have to pay in profitable group companies that were putting money across to ITFC.

Not sure why it stopped....probably because he was fed up with thick as sh*t fans moaning that he's creating more 'debt' for the club (which I really hope by now that they realise is no issue whatsoever).

What would be an issue is when we start owing external institutions which we don't currently.

Evans may not put in £20m a year which we'd all love, but he has put in £95m.....evidenced by the balance sheet.

He was apparently worth £700m when he took us over.

Thrown 13% of that into a football club as a hobby!


To be fair though most of those that are vocal against him do occasionally shell out for tickets when they are reduced to £10, we are all in this together afterall

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I'm no qualified accountant - ME interest/tax breaks Q on 10:02 - Dec 5 with 6455 viewsKeno

Its obv mate init

he has milked the club fo £90million and will get is crappy turnstiles and mucky roofs

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I'm no qualified accountant - ME interest/tax breaks Q on 10:08 - Dec 5 with 6431 viewsclive_baker

I'm no qualified accountant - ME interest/tax breaks Q on 09:47 - Dec 5 by Sikamikanico

Not too shabby a summary. Currently the saving is 19% of losses


UK corporation tax is 19%, however the likelihood is ITFC's losses will offset profits earned in other territories that will attract their local rate of tax, so it's hard to quantify the savings to the ME group. Either way, as others have said. it's impossible that ME is financially better off for owning ITFC. For every £5m he's losing here the group saves a fraction of that elsewhere in tax, but the net will always be a loss. Not to mention the fact the club is worth less now than when he bought it, even free of debt.

Both the whole charging huge interests on loans and tax savings arguments are nonsense. I'm a chartered accountant and take as much interest at this time of year in the commercial performance of the club as I do on field. The debt is a moot point too given it's all inter-company and would be written off at the point of disposal.
[Post edited 5 Dec 2018 10:11]

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I'm no qualified accountant - ME interest/tax breaks Q on 10:09 - Dec 5 with 6419 viewsBlueBadger

I'm no qualified accountant - ME interest/tax breaks Q on 09:45 - Dec 5 by ArnieM

Genuine request:

I don’t suppose you’d have the time and be will to explain the situation on here for interested , but less qualified members please? I genuinely want to understand the mess ITFC are in and Evans approach to the situation.


Regards AM


Never mind that, I want to know what a 'homo meal' is.

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I'm no qualified accountant - ME interest/tax breaks Q on 10:47 - Dec 5 with 6330 viewsfabian_illness

I think Evans bought ITFC as a punt (OK, calculated risk that didn't work) with a view to see us in the premier league within a couple of years.
That hasn't happened so he has tried to run us as part of his group in the most efficient way possible whilst maintaining our championship status.
He is no real town fan but obviously understands our need to remain in the league so to retain any value a potential buyer may see.
I don't see a problem with how town is run, infact in an odd way I applaud Evans.
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I'm no qualified accountant - ME interest/tax breaks Q on 10:51 - Dec 5 with 6320 viewsdirtyboy

I'm no qualified accountant - ME interest/tax breaks Q on 10:08 - Dec 5 by clive_baker

UK corporation tax is 19%, however the likelihood is ITFC's losses will offset profits earned in other territories that will attract their local rate of tax, so it's hard to quantify the savings to the ME group. Either way, as others have said. it's impossible that ME is financially better off for owning ITFC. For every £5m he's losing here the group saves a fraction of that elsewhere in tax, but the net will always be a loss. Not to mention the fact the club is worth less now than when he bought it, even free of debt.

Both the whole charging huge interests on loans and tax savings arguments are nonsense. I'm a chartered accountant and take as much interest at this time of year in the commercial performance of the club as I do on field. The debt is a moot point too given it's all inter-company and would be written off at the point of disposal.
[Post edited 5 Dec 2018 10:11]


How many times have you repeated that final sentence lol! Hugely frustrating isn't it?
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I'm no qualified accountant - ME interest/tax breaks Q on 10:57 - Dec 5 with 6300 viewsHerbivore

I'm no qualified accountant - ME interest/tax breaks Q on 09:24 - Dec 5 by dirtyboy

You're spot on.

From memory, the situation was different in the beginning, I may be wrong on specifics surrounding ITFC, but I understood Evans was enjoying better tax breaks by charging interest on the loans as they'd never be repayable, also the holding company was in Bermuda, where interest received isn't taxable.

Let's be clear, it doesn't 'make' money anywhere, but certainly eases the tax he would have to pay in profitable group companies that were putting money across to ITFC.

Not sure why it stopped....probably because he was fed up with thick as sh*t fans moaning that he's creating more 'debt' for the club (which I really hope by now that they realise is no issue whatsoever).

What would be an issue is when we start owing external institutions which we don't currently.

Evans may not put in £20m a year which we'd all love, but he has put in £95m.....evidenced by the balance sheet.

He was apparently worth £700m when he took us over.

Thrown 13% of that into a football club as a hobby!


I think there was over £30m of debt on the balance sheet when he bought us, but that's still a significant sum of money he's put in.

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I'm no qualified accountant - ME interest/tax breaks Q on 11:39 - Dec 5 with 6191 viewsJ2BLUE

It's to do with Evans being able to claim back 100% of his losses via his other companies. It is, of course, nonsense and has never stood up to the basic 'if that's true, why doesn't Evans invest a lot more money and just claim the losses back? It's a risk free shot at the Premier League' question.

Keaneish actually promised to get this accountant to give a detailed explanation of how it works. Oddly enough the post never came.
[Post edited 5 Dec 2018 11:43]

Truly impaired.
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I'm no qualified accountant - ME interest/tax breaks Q on 11:42 - Dec 5 with 6173 viewsBluefish

I'm no qualified accountant - ME interest/tax breaks Q on 11:39 - Dec 5 by J2BLUE

It's to do with Evans being able to claim back 100% of his losses via his other companies. It is, of course, nonsense and has never stood up to the basic 'if that's true, why doesn't Evans invest a lot more money and just claim the losses back? It's a risk free shot at the Premier League' question.

Keaneish actually promised to get this accountant to give a detailed explanation of how it works. Oddly enough the post never came.
[Post edited 5 Dec 2018 11:43]


Keanish makes benters look reasonably intelligent

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