Boycott Or Not?

[RevidgeBlue]

11 minutes ago, Mashed Potatoes said:

Preston don't have an Under 21 team so that would partially explain lower operating losses. Additionally they are part of the Hemmings family business group so presumably can make use of group employees for matters like IT,HR ,Finance and legal. Also being part of the Hemmings group the losses in the football club can be offset for tax purposes against profits of their other businesses.

Your point being?

Also can't losses sustained by Rovers be offset against profits made elsewhere within the Venky's organisation?

[Tomphil2]

And it's fair enough to presume the same corporate accounting methods apply in India when the VH group funds its overseas loss making entity.

We also have a VH group employee running the club and two VH group finance men on the board of Blackburn Rovers.

So nothing different here apart from 5 thousand miles and a good few brain cells.

Edited 2 hours ago by Tomphil2

[Tomphil2]

Also i know Preston didn't have an academy, although not sure if they do know, so that is c3 mill a year less running costs than Rovers .

But ... 

A third of the Rovers academy costs are met by grants and since Venkys took over off the top of my head

Jones 16 mill + add ons

Wharton 18 mill + add ons

Hanley 3 mill

Travis 2 mill

Leonard 1 mill

40 million quid there divided by 15 years means the operating costs have been entirely covered without the ownership having to spend a penny on it.

So all is not as it seems regarding this so called expensive luxury of a Cat 1 academy.

The fact a lot of that has been totally spewed on paying off managers, directors and players is again down to the terrible ownership and stewarding of this club and something you won't find has happened at Preston.

[Mashed Potatoes]

13 minutes ago, RevidgeBlue said:

Your point being?

Also can't losses sustained by Rovers be offset against profits made elsewhere within the Venky's organisation?

Unless the Indian tax system is dramatically more generous regarding the utilisation of losses of overseas businesses than every other country in the world - which I doubt and on a brief scan of the easily available information regarding their tax code does not appear to be the case - then Venkys will not be able to offset the football club's losses against their taxable profits in India. If like the Hemmings group they had other UK businesses which were profitable they would be able to utilise the losses.

[Mashed Potatoes]

17 minutes ago, Tomphil2 said:

And it's fair enough to presume the same corporate accounting methods apply in India when the VH group funds its overseas loss making entity.

We also have a VH group employee running the club and two VH group finance men on the board of Blackburn Rovers.

So nothing different here apart from 5 thousand miles and a good few brain cells.

You may well be right about how they account for the losses in India - but that will not be the same as the tax treatment.

We seem to have our own Chief Financial Officer - Matt Wright - who I assume is responsible for most of the Finance duties rather than the board members.

[speedies gonna get ya.]

13 hours ago, M_B said:

Not feasible, in my opinion 

Not feasible at a normal club. Have you not learned anything in 15 years? 

They are not interested, he acts unilaterally over here. Unless they get access to the Raos in India, nothing gets off the ground. And access is as good as impossible.

[Mashed Potatoes]

6 minutes ago, Tomphil2 said:

Also i know Preston didn't have an academy, although not sure if they do know, so that is c3 mill a year less running costs than Rovers .

But ... 

A third of the Rovers academy costs are met by grants and since Venkys took over off the top of my head

Jones 16 mill + add ons

Wharton 18 mill + add ons

Hanley 3 mill

Travis 2 mill

Leonard 1 mill

40 million quid there divided by 15 years means the operating costs have been entirely covered without the ownership having to spend a penny on it.

So all is not as it seems regarding this so called expensive luxury of a Cat 1 academy.

The fact a lot of that has been totally spewed on paying off managers, directors and players is again down to the terrible ownership and stewarding of this club and something you won't find has happened at Preston.

Yes, I deliberately referred to operating losses as that excludes profits on transfer dealings. I think prospective new owners, either of us or Preston, would concentrate primarily on operating results simply because transfer profits and losses are volatile and cannot be forecast with accuracy.

[M_B]

18 minutes ago, speedies gonna get ya. said:

Not feasible at a normal club. Have you not learned anything in 15 years? 

They are not interested, he acts unilaterally over here. Unless they get access to the Raos in India, nothing gets off the ground. And access is as good as impossible.

I just don't think what you've been told adds up,I've learned that in 15 years,to not take anything at face value. 

If someone had enough will and enough money to buy Rovers and Venkys were willing sellers, there's not a chance would it be blocked by Pasha. 

Edited 2 hours ago by M_B

[Tomphil2]

VLL owns the club in England but itself is owned and funded by the VH group in India.

Therefore the funding of that venture is withing the VH group accounts as expenses to keep it afloat.  So that money will be minus from the profits or income of the VH group so obviously it'll have an effect on the tax side of things over there.

Regardless of it being in England and the clubs losses tend to be more or less in line with VLL.

So not too different to the North End set up i assume in terms of group accounting.

Jack used his Rosedale Investments (?) to fund the club i think and that was registered in Jersey.  I'm sure funding the club helped shave a bit off his tax bill within that investment vehicle if it was making money elsewhere.

[RevidgeBlue]

24 minutes ago, Mashed Potatoes said:

Unless the Indian tax system is dramatically more generous regarding the utilisation of losses of overseas businesses than every other country in the world - which I doubt and on a brief scan of the easily available information regarding their tax code does not appear to be the case - then Venkys will not be able to offset the football club's losses against their taxable profits in India. If like the Hemmings group they had other UK businesses which were profitable they would be able to utilise the losses.

I find it hard to believe that a Company can not off set losses from an overseas division against profits at home as long as it's all part of the same group of Companies but I'll bow to the knowledge of someone who knows more about it like Herbie or Wilesden.

[Mashed Potatoes]

2 minutes ago, RevidgeBlue said:

I find it hard to believe that a Company can not off set losses from an overseas division against profits at home as long as it's all part of the same group of Companies but I'll bow to the knowledge of someone who knows more about it like Herbie or Wilesden.

It's the case, I'm afraid. If you were an Indian taxpayer how would you feel about effectively subsidising part of the wages of UK based footballers ?

[oldjamfan1]

41 minutes ago, Tomphil2 said:

Also i know Preston didn't have an academy, although not sure if they do know, so that is c3 mill a year less running costs than Rovers .

But ... 

A third of the Rovers academy costs are met by grants and since Venkys took over off the top of my head

Jones 16 mill + add ons

Wharton 18 mill + add ons

Hanley 3 mill

Travis 2 mill

Leonard 1 mill

40 million quid there divided by 15 years means the operating costs have been entirely covered without the ownership having to spend a penny on it.

So all is not as it seems regarding this so called expensive luxury of a Cat 1 academy.

The fact a lot of that has been totally spewed on paying off managers, directors and players is again down to the terrible ownership and stewarding of this club and something you won't find has happened at Preston.

Raya another, I'm sure there are more. Phillips?

[RevidgeBlue]

6 minutes ago, Mashed Potatoes said:

It's the case, I'm afraid. If you were an Indian taxpayer how would you feel about effectively subsidising part of the wages of UK based footballers ?

I'd have no view on it at all because whatever the tax laws of the Country might be at any particular point is completely out of my control.

[Penwortham Blue]

1 hour ago, Mashed Potatoes said:

Preston don't have an Under 21 team so that would partially explain lower operating losses. Additionally they are part of the Hemmings family business group so presumably can make use of group employees for matters like IT,HR ,Finance and legal. Also being part of the Hemmings group the losses in the football club can be offset for tax purposes against profits of their other businesses.

The contrarian rides again 🤔

[wilsdenrover]

1 hour ago, RevidgeBlue said:

Your point being?

Also can't losses sustained by Rovers be offset against profits made elsewhere within the Venky's organisation?

I’ve taken a look at the relevant Indian tax law (I must get a better hobby 😄😄) and it would appear foreign losses can be offset against domestic profits. 

Edited 1 hour ago by wilsdenrover

[wilsdenrover]

Residents of India pay tax on overseas income which seems to be why the law allows them to offset overseas losses too.

There is a double taxation treaty between the UK and India which means they can deduct UK tax paid from the Indian tax they owe.

I can’t see anything in this treaty which alters the Indian law in regard to offsetting losses. 

Edited 1 hour ago by wilsdenrover

[RevidgeBlue]

1 minute ago, wilsdenrover said:

Residents of India pay tax on overseas income which seems to be why the law allows them to offset overseas losses too.

There is a double taxation treaty between the UK and India which means they can deduct UK tax paid from the Indian tax they owe.

This treaty contains nothing which alters the Indian law in regard to offsetting losses. 

Don't let facts get in the way of Masher's contrarian agenda will you?

[wilsdenrover]

1 minute ago, RevidgeBlue said:

Don't let facts get in the way of Masher's contrarian agenda will you?

I hadn’t even seen their comments, I was too busy burying my head in legal documents in response to your question 😀😄.

[RevidgeBlue]

4 minutes ago, wilsdenrover said:

Residents of India pay tax on overseas income which seems to be why the law allows them to offset overseas losses too.

There is a double taxation treaty between the UK and India which means they can deduct UK tax paid from the Indian tax they owe.

This treaty contains nothing which alters the Indian law in regard to offsetting losses. 

Although......do they pay tax over here if they only make massive losses?

[wilsdenrover]

1 minute ago, RevidgeBlue said:

Although......do they pay tax over here if they only make massive losses?

No, I just added that bit for completeness. 

[Goozburger]

1 hour ago, Tomphil2 said:

Also i know Preston didn't have an academy, although not sure if they do know, so that is c3 mill a year less running costs than Rovers .

But ... 

A third of the Rovers academy costs are met by grants and since Venkys took over off the top of my head

Jones 16 mill + add ons

Wharton 18 mill + add ons

Hanley 3 mill

Travis 2 mill

Leonard 1 mill

40 million quid there divided by 15 years means the operating costs have been entirely covered without the ownership having to spend a penny on it.

So all is not as it seems regarding this so called expensive luxury of a Cat 1 academy.

The fact a lot of that has been totally spewed on paying off managers, directors and players is again down to the terrible ownership and stewarding of this club and something you won't find has happened at Preston.

Yes, our academy more than pays its way, whether players are sold for decent amounts, or more importantly, if they become established first team players. There are countless examples.

Setup costs plus a few million a year seems like the most sensible thing any club could do. I'm surprised more at our level don't. Not sure why but there must be a reason.

[Mashed Potatoes]

41 minutes ago, wilsdenrover said:

Residents of India pay tax on overseas income which seems to be why the law allows them to offset overseas losses too.

There is a double taxation treaty between the UK and India which means they can deduct UK tax paid from the Indian tax they owe.

I can’t see anything in this treaty which alters the Indian law in regard to offsetting losses. 

I'm afraid you are misinterpreting this. Indian residents will be treated on "their" overseas income and losses as you state. But the losses of the football club are not losses of an Indian resident - they are losses of a UK resident,the football club. For Venkys in India a tax loss only crystallises if/when they dispose of the UK company through which they are injecting cash in to the football club - but that loss will be a capital loss which under Indian tax law can only be offset against capital profits, not trading profits. 

[roversfan99]

Am I not right in thinking that a decent chunk of academy costs are subsidised.

[RevidgeBlue]

9 minutes ago, roversfan99 said:

Am I not right in thinking that a decent chunk of academy costs are subsidised.

At the time Waggott was trying to flog it off we received a grant of about £1.2m p.a. against overall running costs of £3m p.a. to the best of my recollection. So at that point it cost us about £1.8m p.a. net.

Absolute peanuts in the general scheme of things. 

Not sure what the position is now but id imagine fairly similar or a bit more expensive.