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Financial Integrity, HMRC, Moral Integrity, Tax

When they almost went bust: Celtic’s Unpaid Payroll Taxes in years prior to June 1994 Accounts and Creative Accounting in 1993 Accounts.

In the previous post it was highlighted Celtic’s deception in investigating the impact of the numerous child abusers that existed between Celtic FC and Celtic Boys Club whereby the board instead of secretly investigating contingencies should have been keeping the AIM stock market informed.

Another period ripe for investigation are the years 1993 and 1994 when Celtic’s finances were dire resulting in Fergus McCann saving Celtic at the last minute. He took over in March 1994 so he had his hands on the wheel when the 30 June 1994 accounts were declared.

The 1994 accounts ending 30 June 1994, are extremely interesting reading.

Several figures were restated from the previous 30 June 1993 accounts in the 30 June 1994 accounts. Talk about history revisionism.

Unpaid Previously Undisclosed Payroll Taxes

Celtic declared in the 1994 accounts that they had previously undisclosed unpaid payroll taxes in the 3rd line below. As stated by Fergus McCann the Managing Director:

1994 Unpaid Payroll taxes 1

However, to obscure what the amount of previously undisclosed unpaid payroll taxes are, they are included in a £1.2 million figure with costs associated with examining the Cambuslang stadium site and compensation for early termination of ‘the wrong kind of management’.

However later on, in the notes, a figure of £170,485 is given, in the first paragraph below, due to the failure to account for and remit payroll taxes in periods prior to June 1992:

Note 21 Prior Year Adjustments

What this means is that those unaccounted unpaid payroll taxes were missed in at least two sets of accounts in June 1992 and June 1993 and maybe even further back. By payroll taxes they mean PAYE (Pay As You Earn) and NIC (National Insurance Contributions).

1993 Overdraft Figure Understated by £611,000

In the last sentence of Mr McCann’s, in the same paragraph as above. It states that Celtic’s overdraft to the Bank of Scotland which threatened Celtic’s existence, and resulted in Mr McCann taking over, was understated by £611,000:

1994 Unpaid Payroll taxes 1

From June 1993 accounts, the bank overdraft was declared as £4,687,509:

Bank overdraft 1993 1992

but should have had another £611,000 added so in reality it should have been £5,298,509.

It is almost certain that Celtic were in breach of their caveats on the limit of the BoS overdraft and covered this up in their June 1993 accounts. The BoS precipitated the takeover by refusing to make further payments on the initially reported overdraft. 

In the David Low/Francis Shennan book about the takeover, ‘The McCann Takeover – the Inside Account’ they admitted Celtic were over their overdraft limit which in actual fact was reduced upon every transfer over £250,000 for ‘which the club received the overdraft limit would be reduced by half the total amount’:

David Low book overdraft comment

with the real overdraft amount, £5,298,509, they were well over the actual limit of £4.4 million by £898,509.

Celtic Qualified for the UEFA Cups in both the 1992-93 and 1993-94 Seasons

In  both seasons, 1992-93 and 1993-94, Celtic qualified for the UEFA Cup but got knocked out in the second round.

Should those financial discrepancies voided their licences with the SFA and UEFA for those seasons? Or was this before licence conditions were more strictly administered? If licences should have been voided then monies gained should be repaid, in todays value, as well as fine issued for deception by SFA and UEFA.

What is the point of accounts, signed off by auditors if the figures require massage in the following years? In fact the 1995 accounts restated figures too:

1995 adjustments

So in summary:

  • Celtic had unpaid payroll taxes for at least two years in their 1992 and 1993 accounts.
  • The Celtic 1993 accounts had their overdraft lower than it should by £611,000.
  • At least from a Sporting Integrity point-of-view, if not from a strict licence condition, Celtic were getting financial advantages in the 1992-93 and 1993-94 seasons.
  • Celtic’s accounts for 1993 were revised in 1994 then 1994 revised in 1995. Talk about massaging the figures.


  1. Who discovered the payroll tax discrepancy amounts and when? And for what periods prior to 1992?
  2. If it was the HMRC, did they make demands for payment of the PAYE and NIC, and when? How many demands did they make? Did Celtic delay paying those taxes just when their overdraft was overdrawn and could not pay?
  3. Did HMRC come to a settlement agreement, were any fines or interest charged?
  4. Was Celtic in breach of their football licence at the SFA, a la Resolution 12, for at least two years?
  5. And following on was the UEFA licence also in breach?
  6. What were the regulations for the SFA and UEFA licences in 1993 and 1994? Were the SFA or UEFA informed by Celtic? Did they have an obligation to do so?
  7. Were Celtic trading insolvent such that they had to leave payroll taxes unpaid and covered up their true overdraft figure which was higher?

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