UK Football Clubs Unsure About Tax Obligations - Survey

Robbie Lawther Reporter London 3 September 2018

UK Football Clubs Unsure About Tax Obligations - Survey

UK accountancy firm BDO surveyed finance directors from a cross section of English Premier League, Championship, Football Leagues One and Two and Scottish Premiership clubs.

According to new research, 40 per cent of UK football clubs are somewhat uncertain about complying with tax obligations given the pace of change of HMRC enquiries - compared with 22 per cent in 2017 and 10 per cent in 2016. 

UK accountancy firm BDO released its 2018 Annual Football Directors Survey. The firm surveyed finance directors from a cross-section of English Premier League, Championship, Football Leagues One and Two, and Scottish Premiership clubs about financial affairs in football.

Since 2016, there has also been a drop in confidence amongst football clubs regarding their tax affairs, with 51 per cent in 2018, compared with 73 per cent in 2016 saying that their position is “robust and defendable”.

Despite HMRC’s announcement in 2017 that it had initiated a specific football compliance programme, this year only four per cent of clubs are concerned that a sizeable challenge could create a problem, compared with 18 per cent in 2017 and 14 per cent in 2016. 

Just 19 per cent of clubs say that they are concerned about HMRC’s plan to visit clubs over a three-year period.

“Over the last few years, HMRC has stepped up its compliance activity and it has been more vigilant in its targeting of complex salary structures,” said Dawn Register, partner of tax dispute resolution at BDO.

“The results of the survey show a mixed response to this. While there has been a rise in uncertainty amongst clubs about the liabilities they could face if they don’t comply with tax obligations, perhaps due to the number of club investigations that do not appear to have developed further, there has been a fall of 16 per cent in the last year of those that believe a significant challenge will create an issue for the club. Furthermore, the majority of respondents are not concerned about the prospect of a visit from HMRC.”

Register added: “There seems to be a general acceptance across the industry that HMRC has and will continue to put compliance at the forefront of its activities in relation to football clubs. With the Common Reporting Standard in full throttle and the “Failure To Correct” penalty regime due to come into effect from 1 October 2018, they would have been mindful for some time now that HMRC will be even more interested in any offshore banking arrangements, international player transfers and offshore image rights. The data HMRC will receive in respect of offshore affairs could inform enquiries into football finances given the large number of foreign nationals playing in the EPL. With this in mind, it is important that football clubs continue to ensure their internal compliance and tax policy is robust.”

This comes weeks after this publication reported on the tax issues in football – highlighting the increasing connection between wealth management and sports.

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