The Scottish Football League is locked in a £12,000 tax dispute with HM Revenue and Customs.
The football body responsible for the First, Second and Third Divisions in Scotland lost a First Tier Tax Tribunal case against the authority last year.
According to the tribunal’s findings, the dispute centres on VAT the league pays on medals and flags handed to the winners of each division. The SFL has already paid the "input tax" on the awards, but has appealed to the Upper Tier Tribunal in the next stage of the process, claiming it should receive a refund.
This is another clash between the tax authority and Scottish football, with Rangers, Hearts and Falkirk separately facing disputes with HMRC in recent years.
Court papers confirmed that the SFL is scheduled to have its appeal heard at the Upper Tribunal in Edinburgh in March. League chief executive David Longmuir appeared as a witness at the original hearing and was described as "extremely helpful" and "credible" by the tribunal panel of Judge Gretta Pritchard and Scott Rae.
He declined to comment to STV on Monday in relation to the SFL’s new appeal in the case so as not to prejudice the outcome of it.
The SFL lodged a claim for recovery of VAT input tax between May 2007 and May 2010 on the 20 gold medals and flags awarded to each team that won the three divisions during that period. Gary Moore, the SFL’s representative in the case, argued that the medals, worth £450 each, could not be seen as “gifts” and were therefore not liable to VAT input tax.
Input tax is the VAT paid by an entity at the point of purchase of good or services, which in this case would be the medals and flags bought by the SFL. Under UK tax law, output tax is the VAT paid to an entity for goods or services. If the amount of input tax paid by an entity is greater than output tax, it can submit a claim for recovery of money to HMRC.
If the football membership organisation is successful in its appeal, it could be in line for a £12,000 input tax recovery on the total medals bill of £81,000 for the three seasons.
In 2007-08, the medals were won by Hamilton Academical in the First Division, Ross County in the Second and East Fife in the Third. St Johnstone won the First Division the following year, Raith Rovers were crowned Second Division winners and Dumbarton’s players picked up the medals in the Third. In the final year involved in the case, Inverness Caledonian Thistle won the First Division, Stirling Albion the Second and Livingston finished top of the Third Division in the 2009-2010 season.
Mr Moore first contested the issue for the SFL when he wrote to HMRC in 2010 stating that he believed the organisation had a right to claim input tax recovery because the medals "were not a gift but were a contracted award for the points championship" under the league’s constitution.
This contradicted the agreement the league had with HMRC dating back to 1996 which stated that input tax would not be claimed on the medals as output was unaccounted for once they were awarded to championship winning clubs.
Mr Moore argued that output tax in the case could be recovered from other outlets, such as "sponsors, bookmakers and broadcasters and even members" of the SFL.
However, the revenue rejected this and stated that because the SFL was not liable to pay VAT output tax on handing out the medals to the winning sides at the end of each season, it would not be able to claim the input tax rebate.
The SFL appealed this initial refusal, which resulted in the tribunal case. The appellant body found that the medals were viewed as gifts for tax purposes and therefore the SFL was liable to pay VAT input tax on them.