Wednesday, 25 April 2012

Will fair play tax hit Charlton?

Championship clubs have voted to adopt stringent new rules on the extent of losses that clubs can make, backed up by a 'fair play tax' and a transfer embargo. Will Charlton be hit by these new rules?

One of the difficulties is that we do not know exactly what the club's losses are. However, the New York Addick has undertaken a recent careful analysis based on accounts lodged at Companies House and it would seem that the most recent reported operating loss is £6.1m: Losses

That figure could, of course, increase or decrease in the future depending on revenues and expenditure. However, Charlton would not be affected next season when the permissible loss is £10m. However, by 2015/16 it decreases to £5m, of which shareholder equity investment can be no more than £3m. Clubs who break the rules will be subject to a transfer embargo and to a 'fair play tax' if they are promoted to the Premier League.

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