Venky’s, HMRC…The Plot Thickens ?

[Upside Down]

17 minutes ago, RoverDom said:

My logic is if you spend 20m to save  4m in tax you've lost 16m which gives you no advantage whatsoever given they don't then have 20m worth of assets as a result of expenditure. 

 

It is. But they're not increasing the value of that asset by pumping 20m into it per season. 

 

Whether you rent or buy an asset you spread the cost over many years rather than take the hit all in one go. Unless you do cash accounting which the venkys most definitely won't given their size. 

But ignoring that bit. If you buy or lease a machine, at the end of the day you have a machine. The descion to buy or lease will depend on a multitude of factors, one of which will of course be tax efficiency. 

Of course I don't know what their reasoning is for continuing to own is or the thought process behind their strategy (or lack of). What I'm certain is that you're not on the right path. No textbook, no business class, not even a shady get rich quick scheme would say "you know how to make more money? Flush £20m down the toilet each year, don't buy anything" 

 

Clearly 

No argument there, they're crooks. 

 

You cannot be certain. 

[rigger]

8 minutes ago, Upside Down said:

You cannot be certain. 

I am certain, that I am bored with both of you arguing 

[philipl]

I have an accounting and finance background and I cannot see any scenario in which the last 13 years make any sense to Venky's from a wealth improvement standpoint, no matter how convoluted the corporate structure (it is very simple compared with many I have seen) or creative the tax accountants.

The Rao family is plenty wealthy enough to take the 7m seizure on the chin and fund Rovers up to the FFP maximum.

Either they have finally lost patience or, taking what is being said at face value, there is something else making Indian investigators unhappy or appeals are in process making sending money to VLL ahead of judgement dangerous and/or provocative.

[47er]

I think they bought a Premier League club on a whim for prestige reasons, were conned as to what was needed to continue at that level. got us relegated, became disillusioned and have just provided the bare minimum needed to keep the club ticking over.

For reasons of pride, they prefer to keep the club rather than admit they have been out of their depth and have made a mess of it.

I admit that's me surmising but I look forward to reading different explanations if there are any.

[tomphil]

The worst case scenario is nothing happens and we are left hanging by our fingernails.

If they are going to get done good style then that isn't good news either financially but at least we know what's coming. 

If it's a storm in a tea cup then it needs sorting out as soon as possible before we regress and end up in a similar situation to a decade ago. A word of warning, the last demise began in similar fashion with taps turned off and various factors taking the blame whilst those at the club glossed it over and the owners said nothing.

All after a steady coach had got the team moving in the right direction, had spent a few quid on some decent signings, put a bit of value in the squad then had the rug pulled.

Will things return to normal or come summer will GB be told he needs another 15% budget reduction and needs to bring in ten million pretty sharpish ?

[Upside Down]

1 hour ago, rigger said:

I am certain, that I am bored with both of you arguing 

You can always read something else.

[RoverDom]

1 hour ago, philipl said:

I have an accounting and finance background and I cannot see any scenario in which the last 13 years make any sense to Venky's from a wealth improvement standpoint, no matter how convoluted the corporate structure (it is very simple compared with many I have seen) or creative the tax accountants

Same - although tax isn't my area of interest or deep knowledge - but good to know I wasn't going crazy! 

[tomphil]

Nobody on here or posting at least has any idea how the accounting works at a huge Indian billion dollar corporation thousands of miles away.

Just because some have an opinion one way, based on the things we know publicly, doesn't mean it's a fantasy nor conspiracy. Just the same as those who claim to know accounting etc, or just don't want to believe anything that might not seem obvious to others , are automatically right either.

What we do know is working the system is commonplace by various means amongst huge corporations and the very wealthy. We also know that something is going on that has affected the club and so far resulted in seizure or assets in India, we also know this firm has been investigated before for other issues.

This is on top of firing 200 million over to the UK for nothing in return other than their own amusement according to some. 

That is bollocks there's a lot more to all this but unless the house of cards comes down we'll never know but leave the point scoring at home eh.

[RoverCanada]

 

[RoverDom]

45 minutes ago, tomphil said:

Nobody on here or posting at least has any idea how the accounting works at a huge Indian billion dollar corporation thousands of miles away.

My last on the matter. 

Losing £20m in cash for £0 return £0 in asset creation all for a couple of million tax relief is not a wealth creation tool. 

Indian GAAP is not sufficiently diverged from IFRS (of which a few on here will have detailed knowledge) as to reverse basic mathematics. 

I have no idea why venkys own us, but I'm highly certain it's not to make a profit. 

[tomphil]

7 hours ago, RoverDom said:

My last on the matter. 

Losing £20m in cash for £0 return £0 in asset creation all for a couple of million tax relief is not a wealth creation tool. 

Indian GAAP is not sufficiently diverged from IFRS (of which a few on here will have detailed knowledge) as to reverse basic mathematics. 

I have no idea why venkys own us, but I'm highly certain it's not to make a profit. 

Has anybody said they are making a profit ?  

We are discussing why they are so comfortable in making losses in the region of 20 million a year for a decade.

Like i said you and i know naff all about it i post my opinion based on what is public knowledge not what i want to believe or don't believe based on a UK payslip.  You say you know nothing about it but go to great lengths to try and prove otherwise which is a bit odd.

I'll stick to my opinion as will will others and you stick to yours and unless you can prove your theory then this is my last word with you on it.

All i will say is they are being done for tax loophole stuff nobody has made that up and the Indian govt seems to be going to great lengths to make vast wealth transfer difficult.  Venkys invest millions into India so the govt can't really complain about that but they aren't happy at 200 mill coming over here either, presumably because they've missed out on a large tax revenue from that had it stayed in India.

That kind of tells its own story.

[Upside Down]

When talking about this subject it is imperative to keep an open mind.

Who knows if there are ulterior motives for the Indian government going after venkys, after all Al Capone was only ever legally guilty of tax fraud.

[tomphil]

What they've pulled them up for with the house stuff does seem very petty which to me indicates they are either getting really tough and crawling all over them because something else is suspected.

Or it's just a warning shot across the bows, toe our line or we'll go rooting further.

[RoverDom]

8 hours ago, tomphil said:

Has anybody said they are making a profit ?  

What's the point of a tax dodge if its not to make some sort of financial gain? That was the earlier claim that they have to write off £20m no more no less to get a tax benefit. I would love to know why venkys own us but let's cross this theory off the list. 

 

8 hours ago, tomphil said:

You say you know nothing about it but go to great lengths to try and prove otherwise which is a bit odd.

For context I'm a chartered accountant for a massive company and I'm involved in their corporation tax process albeit not down I'm the weeds of the detail. However I don't lead with this as I hate appeals to authority when debating - so came at it with an open mind willing to be disproved. 

I only mention it now to give context to my "I'm no good at tax" claim (i also find it insanely dull to work in). I know more than Joe bloggs but would happily give way to someone who specialises in tax if there was someone on here (I know there are a few accountants on here) 

[Sweaty Gussets]

My limited knowledge of tax is that you can't write off losses in one country against tax in another country. 

The tax stuff would appear to be a non-starter, despite Nixon and Elliott Jackson continuing to pursue that line. 

We know what the issue is, the Indian Authorities spelled it out. 

[tomphil]

1 hour ago, RoverDom said:

What's the point of a tax dodge if its not to make some sort of financial gain? That was the earlier claim that they have to write off £20m no more no less to get a tax benefit. I would love to know why venkys own us but let's cross this theory off the list. 

 

For context I'm a chartered accountant for a massive company and I'm involved in their corporation tax process albeit not down I'm the weeds of the detail. However I don't lead with this as I hate appeals to authority when debating - so came at it with an open mind willing to be disproved. 

I only mention it now to give context to my "I'm no good at tax" claim (i also find it insanely dull to work in). I know more than Joe bloggs but would happily give way to someone who specialises in tax if there was someone on here (I know there are a few accountants on here) 

I just look at it in very basic terms for example say they make 50 million profit then send 20 million to cover an overseas loss making arm of the corporation.  I've no idea how they'd write that down on the books other than investment in an arm of the business that needs it too survive in the pursuit of the ultimate goal where it could deliver back some big money.  

So basically it's just 20 million off that profit it's down as some sort of expense so is tax deductible.  Of course the devil is in the detail and it doesn't just go out as one 20 million lump. Maybe if all the wages are paid from India that is just absorbed by the VH group payroll or something ?

Point is rather than just owning the club to avoid tax which is where the confusion lies it's more a case of after the initial purchase ideas fell through it just sits there in a corner of their empire. It absorbs a chunk of profit and therefore keeps the tax bill down a bit, i think the fact the govt has whacked firms with a 15% increase in foreign investment kind of backs this up.  Too much money going abroad and not being taxed or invested at source so they want to curb it. 

Of course it might be non of the above and funded by massive borrowings against land that the venky contribution just services that debt.  Then every now and then the crap hits the fan and player sales are needed to pay it down a bit.

That is a far more scary thought than any tax loopholes.

[lraC]

All speculation. I simply keep myself sane on the subject, by thinking something was so dodgy at the takeover point, when they were mixed up with agents and rogues, that they are too scared to off load it.

If they do sell it, someone doing their due diligence will out what happened and expose a bag full of corruption.

Its probably not the real reason, but it helps me to sleep at night. 

[1864roverite]

13 hours ago, tomphil said:

Has anybody said they are making a profit ?  

We are discussing why they are so comfortable in making losses in the region of 20 million a year for a decade.

Like i said you and i know naff all about it i post my opinion based on what is public knowledge not what i want to believe or don't believe based on a UK payslip.  You say you know nothing about it but go to great lengths to try and prove otherwise which is a bit odd.

I'll stick to my opinion as will will others and you stick to yours and unless you can prove your theory then this is my last word with you on it.

All i will say is they are being done for tax loophole stuff nobody has made that up and the Indian govt seems to be going to great lengths to make vast wealth transfer difficult.  Venkys invest millions into India so the govt can't really complain about that but they aren't happy at 200 mill coming over here either, presumably because they've missed out on a large tax revenue from that had it stayed in India.

That kind of tells its own story.

I think it’s more tax avoidance by means of fraudulent accounting than loopholes!

[tomphil]

37 minutes ago, 1864roverite said:

I think it’s more tax avoidance by means of fraudulent accounting than loopholes!

I reckon if the club was treated the same on their books they'd all be in jail by now.

It does show along with a few other things down the years that they are ruthless business people who'll swerve certain rules if they think they can get away with it.

[DeeCee]

No idea what it's all about other than Venkys are dodgy as fuck.

[Andy]

9 hours ago, lraC said:

All speculation. I simply keep myself sane on the subject, by thinking something was so dodgy at the takeover point, when they were mixed up with agents and rogues, that they are too scared to off load it.

If they do sell it, someone doing their due diligence will out what happened and expose a bag full of corruption.

Its probably not the real reason, but it helps me to sleep at night. 

If anything dodgy was genuinely going on, it'd be picked up during annual audits.

And would have been long before now.

[RoverDom]

5 minutes ago, Andy said:

If anything dodgy was genuinely going on, it'd be picked up during annual audits.

And would have been long before now.

Torn on this one. Audit is a sham profession and couldn't find fraud if there was an invoice titled "fraudulent invoice £123,456,789.99" 

[lraC]

13 minutes ago, Andy said:

If anything dodgy was genuinely going on, it'd be picked up during annual audits.

And would have been long before now.

Just have a look at the Fleetwood owner and see how long that took to work out.

He is now doing time at his majesty’s pleasure. 

[Upside Down]

1 hour ago, RoverDom said:

Torn on this one. Audit is a sham profession and couldn't find fraud if there was an invoice titled "fraudulent invoice £123,456,789.99" 

Depends who is doing the audit and what their underlying motivation is.

[Displaced Rover]

57 minutes ago, Upside Down said:

Depends who is doing the audit and what their underlying motivation is.

Statutory audit quality in this country is on the whole a total joke. In my eyes it primarily exists to train new chartered accountants.

The standard of audit of unlisted entities is beyond poor (there is at least some oversight of higher profile, listed work and an attempt to enforce quality). When you couple that with 95% of the general public not understanding what it involves, it becomes an almost pointless exercise.

Edited September 17, 2023 by Displaced Rover