Luke Murphy

[out0lunch]

This does not sound so good for the lad.
I hope we are not playing him next year unless of course we get promoted ! - view external link (http://www.thesquareball.net/2014/02/07/cellino-funds-payment-on-luke-murphy-transfer-to-avoid-embargo/)

[lestiverton]

More writing on the wall for professional football at all levels, not only in this country. Time for the football authorities (national and international)/governments to tighten up on the way clubs are managed financially at every level of the professional game. Let's get rid of the silly wages paid at the highest level and bring back some reality.

[VindePays2009]

More to the point, how much do Leeds still owe?

Did we take an instalment deal that seemed to promise a higher price, in preference to a more solid amount of cash from another club? After all, others were competing for his signature, weren't they? Maybe Venky's would have been a better bet to stump up money in a oner. A few more chickens might have had to meet their maker, but c'est la vie.

Anyway, it's good to see the Alex growing two, as never seemed to happen in other, well-documented circumstances.

P.S., if this is like a hire purchase agreement, can we take him back if Leeds can't keep up the payments?

[AstonAlex]

I guess an instalment deal would, on the face of it, suit us better as we would make less profit in a single year and as a result pay less corporation tax. All of which suggests the assumptions made from last year's accounts (on a previous thread) are erroneous and that the profits due to transfer monies from Westie and Powell may have been an overestimate.

I hope that their fees (from sound clubs like Villa and ManU) are being paid by instalment - means we aren't desperate to sell each year and need to take lower fees.

[whosbrianwilson]

Almost every deal that involves a fee is structured over an agreed period of time.

[alexbarmy]

Just because it is paid over instalments does not defer the tax. If a club agrees a A£1m fee, payable half now and half in 12 months you recognise A£1m as a sale.
If you agree a A£1m fee plus A£500k for every 10 appearances you recognise A£1m straight away and when 10 games are played you recognise A£500k.
Seems the Murphy problem is that the cash is owed, but not paid. As it is on a transfer we can request an embargo until paid what is due.

[out0lunch]

Just because it is paid over instalments does not defer the tax. If a club agrees a Ai1m fee, payable half now and half in 12 months you recognise Ai1m as a sale.
If you agree a Ai1m fee plus Ai500k for every 10 appearances you recognise Ai1m straight away and when 10 games are played you recognise Ai500k.
Seems the Murphy problem is that the cash is owed, but not paid. As it is on a transfer we can request an embargo until paid what is due.

If 1 installment falls in another tax year then if the club loses money etc then there would be no Corporation tax