Long road back for Hearts

  • Last Updated: December 4 2012, 18:44 GMT

Hearts anticipate "further battles ahead" after a resolution was agreed with Her Majesty's Revenue and Customs in a dispute over tax and national insurance contributions.

Hearts: Financial woes

The £1.75million dispute was revealed in the share issue brochure as Hearts launched a scheme to raise £1.79m at the end of October.

Now Hearts have come to an agreement to pay £1.5m - £1.2m in tax and NIC, plus £300,000 in interest - over a three-year period.

The deal is separate to the settlement of a £450,000 bill on Monday which staved off the threat of a winding-up order.

In attempting to galvanise further support for the share issue scheme, which runs until December 19, director Sergejus Fedotovas warned of additional troubles at Hearts, where there are myriad financial issues.

"The share issue is designed to create stability and it is important to achieve the targets we have set," Fedotovas said on the club's official website.

"Unless these targets are hit, going forward we forecast that there will be further battles ahead when it comes to timely payment of bills.

"In this scenario, we will be forced again to look at what we can do with our cost base as all revenue streams are sweating at the moment and there is no reasonable expectation that we can bring significantly more revenue to the club at this moment."

The most recent announcement last week indicated more than £600,000 had been raised by the scheme, but that is only a third of the target and Fedotovas - right-hand man to majority shareholder Vladimir Romanov - has repeatedly called for additional support.

The Edinburgh club, whose defence of the William Hill Scottish Cup ended with a fourth-round loss at city rivals Hibernian on Sunday, face a £2m shortfall in revenue this season.

Prior to last month's match with St Mirren, Fedotovas had warned it could be Hearts' last in the club's 138-year history.

Fans showed their support and Hearts hope the agreement in the tax cases has allayed immediate fears and will prompt hesitant parties to support the club.

"We would urge those supporters, and particularly those in the corporate sector, to act now if they have not done so already," Fedotovas added.

"Much work lies ahead and the window of opportunity for supporters to play their part is closing quickly.

"The resolution of this dispute gives us a positive nod to expect that those supporters who were wary of the immediate effect on the club of the tax case can now step forward in confidence.

"We are keeping our promise to keep this club alive and we have the results - the petition was agreed and paid, the tax case is resolved.

"It is good to know that we are not alone in our ambitions but we need more involvement as we are in far from good shape and the recent Scottish Cup result is the best evidence of this.

"Now, more than ever before, is the time for our fans everywhere to stand up and be counted."

The latest tax case, which will see Hearts pay £250,000 less than previous estimates, related to players loaned to Tynecastle from Lithuanian club Kaunas. Hearts majority shareholder Romanov is a Lithuania-based Russian businessman who also has control of Kaunas.

The "burden of proof" was on Hearts, who announced no penalties are payable under the terms of the agreement and that the tax tribunal hearing scheduled for last month has been concluded without any evidence being heard.

Fedotovas added: "We are satisfied that this resolution provides the club with an opportunity to now move forward with certainty.

"We believe that the payment terms agreed with HMRC allow the club to manage repayments in a way that will not be detrimental to longer-term development of the club."

A Hearts statement added: "The final settlement figure is lower than the amount assessed by HMRC of £1.75m, excluding interest and penalties (as stated in the club's share issue brochure) and brings to an end a contingent liability that has been highlighted in the club's annual accounts since 2009."

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(reopens) Hearts' Scottish Cup-winning manager Paulo Sergio expressed his hope for a resolution to events at Tynecastle.

Speaking ahead of new club CFR Cluj's Champions League clash at Manchester United tomorrow, Portuguese Sergio said: "I read this afternoon they are fixing their problems. I am glad about that.

"Hearts means a lot to me. I am very attached to everyone around the club. They still have their problems. I hope everything can be solved as soon as possible."

Sergio's final match in charge was the 5-1 cup win over Hibs at Hampden.

"It was very hard to walk away," he added.

"You know what we did last season; we did a good job. But life goes on.

"I was trying to work in the UK but whilst I was waiting for a few answers Cluj came to me and I said yes."