Bolton Wanderers reached £1.8 million settlement after wrongly reclaiming VAT
BOLTON Wanderers reached a settlement of £1.8 million after an HMRC investigation into wrongly reclaimed VAT on agents’ fees, it has emerged in court.
But Whites chairman Phil Gartside yesterday told the High Court in Manchester he was “comfortable” with how the club conducts its transfer business.
Mr Gartside said he believed the club had done nothing wrong but Whites agreed a settlement because the VAT saga had “gone on too long”.
The court was also told that Mr Gartside signed a transfer document relating to Gavin McCann’s move to Bolton, which was later backdated, but that he “had not read it”.
Mr Gartside also conceded that he had “indirectly” appointed The Sport and Entertainment Media Group (SEM) to represent the club for the June transfer and agreed basic terms with Aston Villa chief executive Richard Fitzgerald.
Mr Gartside had previously claimed to have had “no personal involvement” in the transfer, the court heard.
The Whites chairman gave evidence for four hours in the ongoing legal battle between himself, Wanderers, SEM and several of both companies’ staff with agent Tony McGill, who believes the defendants cut him out of the transfer of Mr McCann.
Wanderers were pursued for VAT and National Insurance contributions by HMRC after the club reclaimed them.
Most of the transfers involved were similar to that of Mr McCann, with the player charged with tax on the fee the club paid the agent. HMRC argued that this meant Wanderers were therefore not entitled to a VAT rebate.
Martin Budworth, Mr McGill’s counsel, asked why Wanderers were happy with such a large settlement.
Mr Gartside said: “The issue had gone on for far too long. We were satisfied with the settlement.”
The chairman also repeatedly denied being part of a plot to backdate the agency representation agreement relating to the McCann deal.
He admitted that he signed the paperwork as club secretary Simon Marland was away, but said he “probably did not read it as he trusted his staff”. Mr Gartside could not explain why the document was not signed with the rest of the paperwork on June 11 when Mr Marland had returned.
He added: “I am totally satisfied there was no wrongdoing from anyone at the club, including myself.”
SEM’s involvement in the transfer, and its £300,000 commission, was “indirectly” decided by Mr Gartside, the court heard.
Mr Gartside said: “I can’t specifically remember appointing SEM, however I must have given them permission either through Mr Lee or Mr McParland.”
He was referring to then manager Sammy Lee and the director of football Frank McParland.
Asked what justifications there were for such a large fee for SEM, Mr Gartside said: “Making contact, helping, and assisting with the transfer.”
Mr Gartside was asked by his own counsel Mr Berragan to outline the club’s debts.
Mr Gartside said the figure was about £50 million at the time of the McCann deal and was now in excess of £150 million.
He described how, at the time of the transfer, he was only chairman of Wanderers part-time, earning £45,000 per year.
He is now full-time and has had his own desk at the Reebok for the last two years.
The case continues.