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Heart of Midlothian F.C is Dealing with Serious Financial Pressure

Will the closing of the year see the death of a club which has been been in existence for nearly 140 years? Back in 1874 the foundation of Heart of Midlothian in Scotland was finalised as they adopted Association Rules. 138 years later the Scottish club is on the brink of being wound up, after getting hit with a large tax bill which they cannot afford.

Now the club has warned their own fans that it may not survive until the end of November 2012, unless they receive help. Hearts were served with a bill of around £450,000 from HM Revenue and Customs (MHRC) and were issued with a time scale of having just eight days to pay what they owe. Along with the bill for taxation though came a winding up order, and failure to meet the demands of the HMRC bill will mean that the winding up order will be enforced by the courts.

The club are still hoping to come to an agreement to figure out a repayment plan for the current bill with the HMRC but the troubles run deeper for the club. Hearts are already embroiled in a legal wrangling with the Revenue and Customs after getting slapped with a bill for £1.75 million last month in a separate incident.

The club are contesting the charge which was over unpaid liabilities over players brought in on loan to the club from Lithuanian club FBK Kaunus. Hearts are saying that the tax was paid by the parent club because the players concerned were paid in Lithuania and not Scotland. Putting further financial pressure on the club is a transfer embargo from the Scottish Premier League for failure to pay salaries. The manager John McGlynn and six first team players were all paid late in September, and with repeat tardiness in October, the Scottish Premier League disciplinary committee had to step in. The will prohibit Hearts from signing free contract players outside of the transfer window.

Since 2005 the Edinburgh club has been owned by Lithuanian based banker Valdimir Romanov, and the club’s major shareholders are the Ukio Banko Investicine Grupe. With the new charges being piled up against the Scottish Premier League club, the board is looking to their investors to help them out again, but there has also been a rallying call to the community to help preserve the hisotry of their club.

Should Hearts fall into administration, they would immediately be hit with a 17 point fine in the Scottish Premier League. The gravity of that is immense, because if it were applied right now, they would be in the negative, having just 13 points on the board this season. It would be another trial for the club, a bitter blow as they watch their city rivals Hibernian sitting joint top of the league.

The problems mounting up at Tynecastle is yet another blow too for the image of Scottish football who has already gone through the loss of Glasgow Rangers from their lofty status. The Glasgow giants went into insolvency and administration and were only saved by a brand new company purchasing them. Under their new identity though, they are now living life in the bottom tier of Scottish football, having to work their way up to the top all over again.

So is there any salvation for Hearts to avoid the same fate as Rangers? While the board is doing all it can to survive, the fate mate eventually fall to the falls. Hearts have set up a share offer for the fans in the hope of raising £1.79 million, which would see fans take control of 10% of the club. But will anything happen quickly enough to save the fate of Hearts, who themselves fear that on November 17th, when they are due to play St Mirren at Tynecastle, it could be their final game ever, 138 years after their official formation.

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