Further concerns for Hearts

The case, which Hearts reveals in its share issue brochure, will go to a tax tribunal next month, where the Scottish Cup winner has vowed to "robustly defend" its stance against Her Majesty's Revenue and Customs.

At the centre of the dispute is the loan agreement for a number of players between Hearts and Lithuanian club Kaunas, who was then run by Vladimir Romanov, Hearts majority shareholder since 2005.

Hearts will contest the situation was no different to any other loan, where parent clubs often meet wage demands.

The Hearts share issue brochure, published on www.heartsfc.co.uk, states: "Heart of Midlothian plc are subject to a significant ongoing dispute with HM Revenue and Customs ("HMRC") which, if it ultimately goes against the company, could have a dramatically negative effect on the company.

"Specifically, HMRC has claimed unpaid tax liabilities of circa £1.75 million (excluding interest and penalties) in relation to the arrangements between the company and Kaunas FC in relation to certain players who were loaned to the company by Kaunas FC.

"The directors are attempting to robustly defend those claims but the burden of proof is on the company and the tax will be payable unless the company is successful in challenging the claims. "The claims will be heard by the relevant tax tribunal in November 2012."

Hearts this week launched a share issue, making more than 16 million shares available to supporters at 11 pence per share in a bid to raise £1.79 million ($2.78 million), or 10% of the club.

That would value the club at around £18 million ($27.9 million) and Hearts says, if successful, future fan ownership could be explored at a club where Romanov and his Ukio Banko Investicine Grupe has been in control for almost eight years.

The tax tribunal is the latest in a series of financial issues to face the Scottish Premier League club.

Hearts was this week issued with a player registration embargo of 60 days, until December 23, by the Scottish Premier League after admitting to failing to pay all of its players and staff on schedule for September and October.