Southend United gets legal warning and points deduction over tax debt

A judge has given Southend United a further 42 days to clear a £275,000 tax debt but warned the club could be wound up in the next few weeks.

Sebastian Prentis considered the National League club’s case at an Insolvency and Companies Court hearing after HM Revenue & Customs handed out a winding-up petition.

The club was also penalised by the National League and deducted ten points for failing to clear outstanding debts, which the club said it may appeal.

The judge was told the club had other debts – owing more than £1 million in total.

He said he would have made a winding up order were he not dealing with a football club.

Judge Prentis said the case will be reconsidered on October 4 and told bosses the club will be wound up then if debts have not been paid.

Southend chairman Ron Martin told the judge a sale of the club is underway and asked for more time.

He said he is “confident” a sale will be completed by October – and money available to pay creditors – and told the judge that players and staff are being paid.

Other judges adjourned hearings earlier in the summer after being told a sale is in the offing.

“If this were not a football club, with the particular attachment to its fans … I would be winding it up today,” said Judge Prentis.

“This has got to be sorted out.”

He told Mr Martin: “You must expect, if the debts have not all been settled, that (the club) will be wound up on the next date.”

In a statement Southend United said: "Today the Court granted the Club a further 42 days to settle its debt to HMRC and those supporting the winding up petition, those payments will be facilitated by the sale of the Club.

"Negotiations are at an advanced stage with a consortium led by an Australian national, and comprising of a group of local businessmen. Completion is targeted before 1 October.

"Until the sale of the Club completes, everyone involved with the Club, supporters, staff and stakeholders will of course be anxious about its future.

"We also know that people are concerned about the prospect of a points deduction for apparent non compliance with the conditional licence we have been granted to play in the National league’s competition.

"We believe that the correct sanction for non payment of HMRC is an embargo, not a points deduction.

"We are talking to the National League on this point. If agreement cannot be reached we will immediately pursue an appeal."

Southend, who dropped out of the Football League at the end of the 2020/21 season, featured in an Insolvency and Companies Court hearing in March, after HMRC issued an earlier winding-up petition over unpaid tax.

Another judge heard how that debt had been cleared.

Southend were formed in 1906.

Previous managers include England’s 1966 World Cup-winning captain Bobby Moore and ex-England defender Sol Campbell.

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