League clubs favour transfer ban

Under the new system clubs will not be able to deal in the transfer market until their debt is cleared, with the latest club in trouble, Accrington, having been given a reprieve this week by the HMRC.

Stanley will eventually wipe off all their debts but now all FL Chairmen have given the green light for the new system. Clubs have also given the FL future permission to monitor it's tax affairs with a written request at any given time.

"This new regime will provide us with an early warning system where clubs are facing financial problems," said League chairman Lord Brian Mawhinney speaking to the BBC.

"It is only right we do not permit clubs that are unable to meet the costs associated with their existing playing staff to make further new player commitments."

The beeb also quotes on it's official website that:

A club must agree a Company Voluntary Agreement with 75% of its creditors in order to leave administration.

And when a club is in administration it must pay in full its debts to its football creditors - a policy that is opposed by HMRC, which is no longer a preferential creditor and often has to settle for a greatly reduced offer.

As HMRC is often more than 25% of a club's debt it effectively has the power to block a CVA and has recently been exercising its right to do so.

Mawhinney added: "football generally needs to develop a culture of paying its debts rather than putting them off for another day. This will help our clubs to become more financially sustainable in the longer term."