Scottish Football - Hearts to pay £1.5m in taxes, urge fan investment

Struggling SPL club Hearts urged more fans to invest in the club after agreeing to pay £1.5 million over the next three years to settle a tax dispute.

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Hearts Heart of Midlothian's Tynecastle stadium

The Edinburgh club, in which Lithuanian businessman Vladimir Romanov is the largest shareholder, are seeking to clean up their finances and avoid sharing the fate of 54-times champions Rangers who collapsed under a pile of debt earlier this year.

Hearts cleared a separate tax bill of £450,000 on Monday, lifting the immediate threat of liquidation.

However, club director Sergejus Fedotovas warned that Hearts could face further cashflow problems unless more supporters invest in a share issue due to close on December 19.

Hearts were projecting a budget shortfall of £2m by the end of the season and have so far only raised around 50 per cent of that through subscriptions for shares and other fund raising efforts.

"Unless these targets are hit, going forward we forecast that there will be further battles ahead when it comes to timely payment of bills," Fedotovas said on the club's website

"In this scenario, we will be forced again to look at what we can do with our cost base," he added.

Money is tight in Scottish football, which is reeling from the downfall of Rangers who have been forced to relaunch from the fourth tier under new ownership.

The tax settlement at least removes one of the uncertainties facing the club. Hearts had been in dispute with the tax authorities over the treatment of players loaned to the team from Lithuanian club Kaunas.

Hearts have agreed to pay £1.2m in tax and national insurance contributions, plus £300,000 in interest. Payments would begin in May 2013 and be spread over three years.

Hearts are ninth in the 12-team Scottish Premier League and were knocked out of the Scottish Cup by city rivals Hibernian at the weekend.

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