Dundee On The Brink

Last updated : 29 September 2010 By QUEENS MAD

Dundee are locked in talks with the taxman to avoid administration, after being served a tax bill for £365,000 which is due immediately.

The club has appointed insolvency practitioner Blair Nimmo to liase with Her Majesty's Revenue and Customs.

However, survival now seems to rest on benefactor Calum Melville agreeing to underwrite a portion of the tax demand.

Local businesses have already pledged to raise £75,000 towards the amount which is due in full to HMRC.

HMRC is seeking payment for the period between January and April 2010 when the club failed to pay their PAYE and National Insurance bill.

However, the taxman could lose out entirely with the club owing around £1.6m to directors Melville, Bob Brannan and landlord John Bennett in soft loans.

The trio could push through a creditors voluntary arrangement, which would apply to all creditors, writing off the money due and forcing the club into administration.

With HMRC no longer having preferred creditor status they would lose out on almost all of the money due to them.

Penalties available to the Scottish Football League range from a points deduction to relegation, so the club is keen to come to a deal with the tax authorities.

A pledge made last weekend by Melville to lodge a six-figure down-payment and provide a legally-binding personal guarantee to cover the club paying the outstanding balance in instalments, is the best hope of avoiding administration, if HMRC accept that offer as opposed to their demand for immediate payment