HEARTS today reassured supporters that funds raised through the club’s share issue will not be used to pay any tax bill.
As Her Majesty’s Revenue and Customs pursue £1.75million in tax for players loaned from Lithuania, senior Tynecastle officials promised they will not delve into share money if they are ordered to pay up at next month’s tribunal.
“Should we become liable for the tax, an alternative source of funding will be sought,” said a Hearts spokesperson. “The money raised from shares is going towards the youth academy and working capital. That is, the operating costs of the club.”
Hearts launched their new share initiative at the weekend hoping to raise £1.79m by selling ten per cent of the club back to supporters. They are determined to re-invest the money despite HMRC demanding a similar amount. Hearts deny they are due any money to the Inland Revenue.
Nineteen players who joined the Edinburgh club on loan from FBK Kaunas are the subjects of the tax case, which will be heard some time in November. Sergejus Fedotovas, Hearts’ Lithuania-based director, is confident that the club will be cleared.
“This tax case brings us back to 2005 and 2006, and some years after that, when players have arrived on loan from Lithuania, and we are facing a case in relation to the earnings of these players in Lithuania,” he said.
“We believe we can defend this case, we are bringing documents together and preparing our defence.
“Some time in the future this case will be heard and we are hopeful that all the evidence we produce will be able to defend this case successfully.”
On the share issue, Fedotovas explained the urgent need for investment in Hearts. “We have exhausted all the possibilities available to the club,” he continued. “There is significant instability in the revenue streams. We need to make our decisions and put in place a strategy to react to that.
“The share issue is a signal and an alarm to the people who are truly concerned about the club.
“Otherwise we will be left with no other solution than cutting costs, and I don’t think anyone will be happy with a weak team and poor results.
“If this strategy fails the club will be faced with a tough financial reality. The answer to that would be another dramatic cut in costs.”
Meanwhile, former Hearts manager Paulo Sergio was due to be officially appointed head coach of the Romanian champions FC Cluj today.