City & FFP | 2020/21 Accounts released | Revenues of £569.8m, £2.4m profit (p 2395)

[aguero93:20]

Is the ability to transfer profits to loss making cos useful as well particularly when we do not need to continue our max investment policy ?

We haven't transferred profits at any stage, we've charged legimate costs across the company to the providers of the goods/services that incurred those costs. Transferring profits would be profit smoothing and a violation.

The reason the company exists that employ those staff is to avoid any fee being paid to MCFC by MCWFC, Marinos, NYCFC, Melbourne etc for use of those services (as requested by UEFA in our FFP1 settlement).

 

[SilverFox2]

We haven't transferred profits at any stage, we've charged legimate costs across the company to the providers of the goods/services that incurred those costs. Transferring profits would be profit smoothing and a violation.

The reason the company exists that employ those staff is to avoid any fee being paid to MCFC by MCWFC, Marinos, NYCFC, Melbourne etc for use of those services (as requested by UEFA in our FFP1 settlement).

Perhaps I should have said transferring losses from member cos to offset uk tax.

 

[Plays By Sense Of Smell]

A good investor will do several what if scenarios and create multiple contingencies.
Our guys will be at the top end of the savviness tree. Especially after the initial ffp changing the rules fiasco, you can bet we will have several ways of dealing with each attempted counter.

Gill may as well save his breath rather than waste his life trying to overcome a complete and utter outflanking.

 

[aguero93:20]

Perhaps I should have said transferring losses from member cos to offset uk tax.

Football clubs barely pay tax. The only club in the group making a profit is MCFC and that isn't much. You can't offset VAT which is the main component and the image rights dodge is finished.

 

[SilverFox2]

Football clubs barely pay tax. The only club in the group making a profit is MCFC and that isn't much. You can't offset VAT which is the main component and the image rights dodge is finished.

I meant of course tax on profits which currently City are investing in players but when that phase eases member clubs that are losing money can legally have their losses used to offset the tax bill City would normally pay.
I thought this is why a holding company was formed because our owner wanted to make sure his initial investment would continue to allow further investment in clubs still at the non profit stage of investment.

 

[ste.sully]

This thread title should be "FFP - The Conspiracy Files".

You lost have lost all sense of perspective.

 

[aguero93:20]

I meant of course tax on profits which currently City are investing in players but when that phase eases member clubs that are losing money can legally have their losses used to offset the tax bill City would normally pay.
I thought this is why a holding company was formed because our owner wanted to make sure his initial investment would continue to allow further investment in clubs still at the non profit stage of investment.

The football side of things isn't a workable profit enterprise,, it's a flagship.

 

[aguero93:20]

This thread title should be "FFP - The Conspiracy Files".

You lost have lost all sense of perspective.

Please explain, the accusation with complete lack of detail or definition has me lost.

 

[OB1]

Perhaps I should have said transferring losses from member cos to offset uk tax.

There are rules about transfer pricing and tax authorities such as Her Maj's finest take a dim view of charges that are not priced on the basis of an arm's length transaction. A high profile group like City's cannot afford to try and move losses or profits artificially to reduce it's tax charges.

 

[SilverFox2]

There are rules about transfer pricing and tax authorities such as Her Maj's finest take a dim view of charges that are not priced on the basis of an arm's length transaction. A high profile group like City's cannot afford to try and move losses or profits artificially to reduce it's tax charges.

What benefit to cfg is a holding company, this is the way that the government encourages investment is it not by allowing tax to be invested in new cos at its normally loss making phase. Not an accountant but in .my working days this was its main purpose perhaps things have changed.

 

[JGL07]

There are rules about transfer pricing and tax authorities such as Her Maj's finest take a dim view of charges that are not priced on the basis of an arm's length transaction. A high profile group like City's cannot afford to try and move losses or profits artificially to reduce it's tax charges.

Starbucks have got away with transfer pricing for years. They always record a loss in the UK because of a franchise fee paid to an associated company in Luxembourg where the corporate tax rates are very low.

The most that could be done by the tax authorities was to shame them into making nominal tax payments.

 

[OB1]

Starbucks have got away with transfer pricing for years. They always record a loss in the UK because of a franchise fee paid to an associated company in Luxembourg where the corporate tax rates are very low.

The most that could be done by the tax authorities was to shame them into making nominal tax payments.

It's a complex area but something that tax authorities around the world are tightening up on and HMRC are no exception. I think HMRC tend to try and negotiate settlements with companies whose transfer pricing they object but make no mistake, it is something they take seriously and if they need more teeth, they will get them. The UK has certainly added to its legislation on the subject in recent years.

 

[crazyg]

I used to work in the Large Business Service of the Revenue, on Employer Compliance. We once had a long seminar by our Corporate colleagues on the subject of Transfer Pricing, and the legal loopholes that the large multinationals use to minimise their tax burdens. (No names for obvious reasons, although specific cases were mentioned). It made the 7 figure settlements following our reviews look like the loose change HRH would find down the back of his sofa. At the time, my colleagues were pessimistic that much would change, as policy was determined at a ministerial level (as always). From the comments above, little seems to have altered since I retired.

 

[Andrew___K]

Another part of FFP2.0 is being implemented, threatening to deprive CFG of one of their sources of income, basically destroying the business model installed by Txiki and Soriano.
https://www.football-italia.net/119701/fifa-considers-abolishing-loans
The executive committee will debate new measures in October, after meetings between FIFPro [the players’ union], the European Club Association, the World League Forum and former stars such as Cafu, Zvonimir Boban, Edwin van der Sar and Marco van Basten.
According to France Football, one of the measures being considered is the reformation or even scrapping of the loan system.
The idea behind loans is to allow young players to develop with lower-level clubs, but world football’s governing body believes the system is now being exploited.
Big clubs are signing up large numbers of young players, only to loan them out and then sell them for a profit, often without them ever playing for the first team.
France Football points out that Juventus have loaned out 41 players this season, Udinese 27, Chelsea 22 and Manchester City 18.
As a result FIFA is considering bringing in new restrictions on loans, or even scrapping them altogether.

 

[shemnel]

i always personally thought the hoovering up of talent on quasi-industrial scale by bigger, richer clubs just to loan them out then sell them for a bit of profit (or keep them in the rare case theyre very good) was a total joke.

i thought that way before City were regular title contenders and i'm not changing my mind just cos we now do it.

 

[PannickAtTheDisco]

Another part of FFP2.0 is being implemented, threatening to deprive CFG of one of their sources of income, basically destroying the business model installed by Txiki and Soriano.
https://www.football-italia.net/119701/fifa-considers-abolishing-loans
The executive committee will debate new measures in October, after meetings between FIFPro [the players’ union], the European Club Association, the World League Forum and former stars such as Cafu, Zvonimir Boban, Edwin van der Sar and Marco van Basten.
According to France Football, one of the measures being considered is the reformation or even scrapping of the loan system.
The idea behind loans is to allow young players to develop with lower-level clubs, but world football’s governing body believes the system is now being exploited.
Big clubs are signing up large numbers of young players, only to loan them out and then sell them for a profit, often without them ever playing for the first team.
France Football points out that Juventus have loaned out 41 players this season, Udinese 27, Chelsea 22 and Manchester City 18.
As a result FIFA is considering bringing in new restrictions on loans, or even scrapping them altogether.

won't really, all we'd do differently is sell Angelino or Maffeo to Breda and Girona on the cheap and then put cheap buy-back clauses in.

 

[SWP's back]

Another part of FFP2.0 is being implemented, threatening to deprive CFG of one of their sources of income, basically destroying the business model installed by Txiki and Soriano.
https://www.football-italia.net/119701/fifa-considers-abolishing-loans
The executive committee will debate new measures in October, after meetings between FIFPro [the players’ union], the European Club Association, the World League Forum and former stars such as Cafu, Zvonimir Boban, Edwin van der Sar and Marco van Basten.
According to France Football, one of the measures being considered is the reformation or even scrapping of the loan system.
The idea behind loans is to allow young players to develop with lower-level clubs, but world football’s governing body believes the system is now being exploited.
Big clubs are signing up large numbers of young players, only to loan them out and then sell them for a profit, often without them ever playing for the first team.
France Football points out that Juventus have loaned out 41 players this season, Udinese 27, Chelsea 22 and Manchester City 18.
As a result FIFA is considering bringing in new restrictions on loans, or even scrapping them altogether.

I’m not overly concerned about that at all to be honest.

I don’t particularly agree with the process as it is anyway.

 

[SWP's back]

won't really, all we'd do differently is sell Angelino or Maffeo to Breda and Girona on the cheap and then put cheap buy-back clauses in.

Also very true and because of that it would affect City far less than the likes of Chelsea who do it as a business model

 

[KS55]

This is classic Uefa nonsense. Young players benefit from the system in having a big club behind them and getting the chance to deveiop. Smaller clubs could not afford to give contracts to many of those on loan and employment opportunities will be lost. Supplier led policy is almost always wrong. Could easily be addressed by having a sensible limlt on numbers, not too low. Generally, clubs should be applauded for loans, not threatened. Think Mooy, Gunn etc.

 

[Silvas' left eyebrow]

Another part of FFP2.0 is being implemented, threatening to deprive CFG of one of their sources of income, basically destroying the business model installed by Txiki and Soriano.
https://www.football-italia.net/119701/fifa-considers-abolishing-loans
The executive committee will debate new measures in October, after meetings between FIFPro [the players’ union], the European Club Association, the World League Forum and former stars such as Cafu, Zvonimir Boban, Edwin van der Sar and Marco van Basten.
According to France Football, one of the measures being considered is the reformation or even scrapping of the loan system.
The idea behind loans is to allow young players to develop with lower-level clubs, but world football’s governing body believes the system is now being exploited.
Big clubs are signing up large numbers of young players, only to loan them out and then sell them for a profit, often without them ever playing for the first team.
France Football points out that Juventus have loaned out 41 players this season, Udinese 27, Chelsea 22 and Manchester City 18.
As a result FIFA is considering bringing in new restrictions on loans, or even scrapping them altogether.

Bang on it is being exploited.young players should go to lower league clubs to gain experience.then if a big club wants them then buy them. Keeps small clubs alive.........