Furloughing staff

[thekneaf]

I've enjoyed this thread, probably the most interesting back and forth since football went away.

I'm no accountant, but I do think many people do questionable, but not illegal activity when it comes to tax. This can even be as simple as being creative with expenses.

For me, that's why tax is a moral issue as well as a legal one. There's a balance to be struck, and government should be held accountable for spending, but ultimately our tax is there to create a budget to make our society better and create a safety net for moments when we're at our most vulnerable.

NB, I've been discussing this way beyond Joe Lewis, someone who's business I know very little about.

 

[neilp]

Are you making this up or can you point me to the government guidance that says it will be treated as income for the company? I very much doubt that would be the case. Having recently furloughed nearly 2000 of our employees, if the reclaimed wages are going to be counted as income, we'll have to lay them all off again and go back to paying them the statutory guarantee payment; the corporation tax on such income would make it unfeasible .

https://www.gov.uk/guidance/claim-f...irus-job-retention-scheme#after-youve-claimed

This page gives all of the rules, the last section at the bottom specifically deals with the income tax etc, but dont forget that the employees furlough payments etc are still treated as allowable expenses so one will cancel out the other.

 

[pagevee]

Wow, just read the link provided by neilp.

That changes things and throws out some of the assumptions/numbers I was looking at last night.

The 2500 monthly max payout translates to 625 a week which is approximately 15.625 an hour wage. To be blunt, your cost of living in London is insane and 15.625 is hard to imagine. That means any employee making more than 19.54 per hour, 781.60 per week, 3126.40 per month, or 43,739.60 annually is taking a larger than a 20% paycut using this program.

I would assume Levy is smart enough to not furlough any employee earning more than 19.54 per hour. That would drop the number of furloughed employees to include the 100 retail and 169 temporary employees (eligible according to link provided by neilp). Some of the administrative staff may be included in the numbers but I don't know your job market/payrates to make a guess.

The temporary employees would not be 40 hours but lets just max it out to make ammends for any admin staff left off. The club is probably taking less than 672,500 (269*2500) weekly or 2,017,500 over 3 months of government funds through the furlough program.

That is replacing a max wage of 19.54 for 269 employees making 781.60 weekly and 10,942.40 over 14 pay periods. Saving the club a max of 2,943,505.60 for the 269 employees for the 14 pay periods.

The 269 employees max annual earnings of 11,774,022.40 or around 13-14% of the non-player/coach/Director wages (87,500,000 pounds). The rest of the non-furlough staff took a 20% cut off the weekly wage bill of 1,352,249 pounds per week saving the club a further 270,449 per week and 3,786,298 over 14 pay periods.

The Directors cut their own pay by 20% to equal approximately 22,000+ weekly and 320,000 over 14 pay periods.

If correct, the cuts the club have taken should save around 7,049,803 pounds and receive government funds/income of around 2,017,500 pounds. That makes this a 9 million pound positive cashflow event decision which incidentally guarantees the jobs of the lowest earners at the club. I personally call that a win win.

As for using taxpayer funds... if your government is anything like ours, they piss away your taxes every year for some bullshit agenda either way you look at it. At least with this furlough program, it is going directly back to help pay the wages of the lowest earners within your community AND GUARANTEEING the job security for those individuals who are easily laid off and replaced at a later date. I still maintain, jobs will be lost as redundancies will be cut out and job responsibilities will be increased for the people remaining. The premier League will not only be affected, some of the bigger clubs will make cuts within the marketing department, sales staff, retail division, middle management, data entry, administrative support, and other non-specialty positions. They will be replaced by adding responsibilities to those people who remain employed and will increase the use of temporary employees the fill up the gaps. It may not happen this month or within the next quarter due to the PR; however, it will happen this year or next year. Just watch how Manchester United handles the situation, the owners don't want to furlough because it guarantees the positions for an unknown timeline.

The business leaders look at numbers first, second, and last. They are compensated based on financial performance by the owners/shareholders, not by the newspapers. The CEOs will cut costs at some point this year to make sure the financial reporting doesn't get themselves fired regardless of what the newspaper says. If not they are given a pass this year, they will make the cut next year as no one will receive two passes in a row. Unless the clubs not using the furlough program have publicly stated that all Full/Part time employees positions are guaranteed through the end of 2021, the club is deferring the decision until they have more information.

On a separate note, if the players were to match the Directors with a 20% cut. The 85,000,000 annual wages or 1,517,857 pounds weekly drops by 303,571 weekly, saving the club an additional 4,249,999 over 14 pay periods. I feel bad for some of the players because it seems like the PFA is not allowing them to make a decision until the clubs prove there is a cash flow issue. If the PFA waits until the clubs are out of cash, it will be too late. If true that the PFA has told the premier league players to not agree to anything until the clubs prove their case to the PFA, then the PFA will screw up the issue for the clubs that need the most relief while waiting for everyone to comply/open the books. The PFA is looking out for the collective and as often happens, screwing the people it is meant to help. Unintended consequences are a bitch.

 

[Lighty64]

Jesus, Your guesses are just way off, There are clubs in the country with over 900 non-playing staff, and not furloughing, or reducing salaries of any of them.

£20 worse off. What you reckon on average our full time previously took home £100 per month ? Levy may be tight as a ducks ringpiece, but even he won't be getting away with paying people £100 per month for full time work.
Or are you saying 20 per day worse off, so £500 less a month for already very load paid workers, and you don't give a toss that our shareholders are in effect removing that from them, where no other club is ?
Could either call you a heartless bastard, or you must be related to Levy, not sure which is worse insult.
Maybe you have just gone so far balls deep in your support of Levy over the years that you cannot back down even though you really believe this is a shit move.

Joe Lewis, tax-exile 4.8 billion net worth, but no despite being the most profitable club in the country, let's take money off all our employees.
Maybe he will have to cut down to buying only 10 more houses, a plane, and 5 more businesses next year.

please tell me and prove it, as you ignored it last time I asked. I mean Liverpool 1 of the biggest clubs in the country, only 4-5k less attendance and they only had 200, and it never said that only 200 of their staff out of ????? whatever number you wish to dream.

I was looking at as a weekly wage, and if some of those staff are stadium staff such as caterers bar staff and security, then they would only receive a 2 week pay. a lot of staff will also be on a PT basis, so yes and knowing what a youngster can earn before paying tax I doubt it will hit them hard, especially as I doubt 550 people work on the doorstep, so won't be paying fares, buying snacks at lunchtime, or going down the pub,

no I'm not a heartless bastard at all, but I think I can understand the difference of what their small decrease is compared to what it was before, and also know 550 is a lot bigger number than 200

so whined your neck in "Mr think he knows it all once upon a time in finances, ex ref, friends within the PGMOL and someone that thinks VAR has only helped us and not backed us yet".

 

[Spurslove]

Here's Ali Gold's excellent blog of today (31 minutes)

 

[Bulletspur]

How does the club's decision to furlough staff sit with you? Does it make a difference to how you feel about the club?

I'm not one for grandstanding or for taking the morale high ground just because I can but have to admit it sits really bad with me. Given the amount I have invested in supporting spurs (time,money etc) I always try to magnify the good and downplay the bad elements but finding it really hard to downplay this decision.

The club has made the highest profit ever in premier League and has 3 of the top 5 profits ever in the league, been profitable 7 years in a row, have restructured stadium debt so that it is not a noose around the club's neck and yet they can't pay 550 non playing staff their wage?!

Clubs that have nowhere near our financial strength are paying staff their full wages while we don't even top up the furlough payment to ensure they get their full salary.

I will think long and hard before traveling back to London, spending money In the stadium, club shop etc when all of this is over as it really has left a sour taste in mouth.

Am I alone in feeling a bit let down? I freely admit thats on me as I thought that the club I supported had better values than this but just wanted to see if others had views on this.

Jake from our supporter's club here in Toronto wrote to the club about the same issue and got this response. Hopefully you will now see the situation from a different perspective


Hi Jake,

Thank you for taking the time to get in touch.

To address your concerns, the Club has only furloughed those who are unable to do their job from home by the very nature of their work. As I'm sure you can appreciate, we simply have no income at present and a cost base of millions, and this measure has been taken to protect their employment rights and avoid redundancies during such uncertain times.
Additionally, I can confirm that the Chairman and the Board are all included in the wage cuts for April and May which have been announced, and there are ongoing discussions between the Premier League, PFA and LMA. We hope their positions will be agreed shortly and should there be any updates we will communicate these in due course.
In the meantime, the Club will of course continue to do what it can to support those impacted by COVID-19. We are putting our stadium to good use and, as you may have seen, it is currently being used as a food distribution centre for shielded individuals. We shall also announce an NHS use in the coming days.
Many thanks again for getting in touch and we would of course like to wish you, your dad and the rest of your family well at this time. Do take care and stay safe.
Kind regards,
Julia

 

[Spursmatty87]

It's not the staffs fault we are 600mil in debt.

It’s not but there wouldn’t be that amount of staff if it wasn’t for spurs reinvesting in building a new stadium and accumulating the stadium... and it’s not spurs fault we have a global crisis.

Joe Lewis is the one that doesn’t sit well with me. Avoids tax then wants bail outs from the gov.

 

[topper]

Tax avoidance isn’t an abomination. You do it every month when you get paid and only pay the tax you owe.

Tax evasion is a crime.

Tax avoidance isn't a crime - it's just morally repugnant

 

[coys200]

Right now over say 3 months the saving is like £2-3m. I think if we get to 5-6 months and the saving is £5-6m it starts to become much more of a debate. That’s close on 10% of profit this year. I’m really not sure how clubs like Villa Everton even Arsenal aren’t furloughing, can only be owners are covering costs. I think the players scheme last night does the clubs no favours and makes a 30% wage cut less likely imo. I wouldn’t be surprised if we see a few more furlough in next few days.

 

[Spurslove]

The only thing I'll say is that a 20% wage cut is going to hurt you far more if you're earning a normal salary of say £30,000, than if you're earning millions every year.

 

[Spurslove]

It’s not but there wouldn’t be that amount of staff if it wasn’t for spurs reinvesting in building a new stadium and accumulating the stadium... and it’s not spurs fault we have a global crisis.

Joe Lewis is the one that doesn’t sit well with me. Avoids tax then wants bail outs from the gov.

Me too. I know he's our major shareholder but this bloke really does make me angry for the exact same reason as you've highlighted. He is the 355th richest man on earth and is worth over £4 billion+ FFS.

Tax avoidance should made just as illegal as tax evasion, I don't see why there should be any difference between the two.

.

 

[spursfan77]

The only thing I'll say is that a 20% wage cut is going to hurt you far more if you're earning a normal salary of say £30,000, than if you're earning millions every year.

Just a bigger mortgage isn’t it?

 

[LeSoupeKitchen]

I can't bring myself to be that bothered by this when reportedly 50% of businesses, some of which are far bigger and richer than us, will be using this scheme. It was put in place for businesses and businesses will use it, big or small. Otherwise the government should have put restrictions in place.

Will people boycott BA, Costa Coffee, Pret, McDonalds, etc. when this is all over. I doubt it. The trouble is people view THFC as something different from these other businesses, when in fact we are not. This is something Liverpool fans found out this week after years of deluding themselves with "this means more" bollocks. The difference is their club was pressured into a reversal so they can delude themselves a little longer.

How the fuck can people say we're no different to any other business and say that thinking "this means more" is deluded. I give up if that's the way we're supposed to feel.

If we're just like any other business then should I be booing the team every time they play shit? Should I be demanding my money back after getting smashed by Bayern Munich? Should I support Man City this season because they offer a way better product for much cheaper?

Actually - I think you're onto something. I'm off to go post my outrage in "McDonalds Community" forum where a bunch of us can wildly celebrate when a new franchise makes better than expected profits in Year 1. We'll also have a really strong community feeling where I'll actually care about other people's mental health and will probably share very personal things with a bunch of strangers all because we are bonded by our love of how profitable McDonald's is.

 

[topper]

Tax avoidance isn't a crime - it's just morally repugnant

So Bobbins - unless you’re a tax consultant please tell me why it’s ok to starve the NHS, Schools and the welfare system of money to line your own pocket?

 

[nailsy]

One of the guys on one of the football Podcasts was saying any team that uses the furlough scheme should receive a transfer ban. Hard to argue with that really. Or those sides should have a net zero spend in the next transfer window. Which isn't unusual for us anyway.

 

[topper]

One of the guys on one of the football Podcasts was saying any team that uses the furlough scheme should receive a transfer ban. Hard to argue with that really. Or those sides should have a net zero spend in the next transfer window. Which isn't unusual for us anyway.

I knew there was a reason why Levy went for this option

 

[pelayo59]

One of the guys on one of the football Podcasts was saying any team that uses the furlough scheme should receive a transfer ban. Hard to argue with that really. Or those sides should have a net zero spend in the next transfer window. Which isn't unusual for us anyway.

No, it's very easy to argue. Transfers will be made when football will be back. When football will be back the club will have money that can spend.

 

[thekneaf]

One of the guys on one of the football Podcasts was saying any team that uses the furlough scheme should receive a transfer ban. Hard to argue with that really. Or those sides should have a net zero spend in the next transfer window. Which isn't unusual for us anyway.

It would make sense. If liquidity is the issue, buying a player makes a mockery of that argument.

 

[dontcallme]

One of the guys on one of the football Podcasts was saying any team that uses the furlough scheme should receive a transfer ban. Hard to argue with that really. Or those sides should have a net zero spend in the next transfer window. Which isn't unusual for us anyway.

I think the FA just making up rules in retrospect is very easy to argue against. If a club using the furlough system is not currently breaking any rules then it would be very fucked up to punish them.

 

[nailsy]

It would make sense. If liquidity is the issue, buying a player makes a mockery of that argument.

I think the FA just making up rules in retrospect is very easy to argue against. If a club using the furlough system is not currently breaking any rules then it would be very fucked up to punish them.

I agree with both of these points. It's not simple is it?!?!