[Football] R&D Tax Credits for football clubs

[albionalba]

I may just be naive but I hadn't realised football clubs were claiming R&D tax credits for research and innovation in 'sports science' etc. Any NSC accountants know anything about this (and the football implications)? I knew it happened a lot in other businesses, sometimes dubiously / spuriously and HMRC have begun to crack down. Locally to me:

"Dundee United could face a £600,000 bill after HMRC ordered the Tannadice outfit to repay a portion of its successful research and development (R&D) tax relief.
United were named alongside Chelsea, Nottingham Forest and Fulham among the 28 sporting institutions to benefit from the scheme, which seeks to use public money to support science and technology breakthroughs. The rules state that a club is only eligible to apply if it makes an advancement that benefits the overall field."

 

[dazzer6666]

I may just be naive but I hadn't realised football clubs were claiming R&D tax credits for research and innovation in 'sports science' etc. Any NSC accountants know anything about this (and the football implications)? I knew it happened a lot in other businesses, sometimes dubiously / spuriously and HMRC have begun to crack down. Locally to me:

"Dundee United could face a £600,000 bill after HMRC ordered the Tannadice outfit to repay a portion of its successful research and development (R&D) tax relief.
United were named alongside Chelsea, Nottingham Forest and Fulham among the 28 sporting institutions to benefit from the scheme, which seeks to use public money to support science and technology breakthroughs. The rules state that a club is only eligible to apply if it makes an advancement that benefits the overall field."

Chelsea (the biggest claimant by far, naturally) have never done ANYTHING for the benefit of the wider game. FACT

 

[Paulie Gualtieri]

Does trying to copy Tony Bloom come under research, how do they quantify a value on his?

 

[schmunk]

As it happens, I've been reading HMRC's Guidlines for Compliance document about R&D tax relief claims this morning. I find it very difficult to believe any football club could have any meaningful level of qualifying R&D expenditure.

How to identify qualifying R&D activities (part 4)

www.gov.uk

 

[pigmanovich]

Chelsea (the biggest claimant by far, naturally) have never done ANYTHING for the benefit of the wider game. FACT

I don't know, reckon they brought everyone in the game a lot of joy with their collapse in 2022/23

 

[albionalba]

I find it very difficult to believe any football club could have any meaningful level of qualifying R&D expenditure.

Yes I agree - but there is mention of work by medical practitioners so that could possibly be something (e.g. developing a novel injury dressing that allows training to continue in a certain way). Can't see it being the physics of how to pluck a ball from the air in a Mitoma-esque way or even the famous 'dribbling thesis' that commentators love to throw in.....

 

[hans kraay fan club]

I may just be naive but I hadn't realised football clubs were claiming R&D tax credits for research and innovation in 'sports science' etc. Any NSC accountants know anything about this (and the football implications)? I knew it happened a lot in other businesses, sometimes dubiously / spuriously and HMRC have begun to crack down. Locally to me:

"Dundee United could face a £600,000 bill after HMRC ordered the Tannadice outfit to repay a portion of its successful research and development (R&D) tax relief.
United were named alongside Chelsea, Nottingham Forest and Fulham among the 28 sporting institutions to benefit from the scheme, which seeks to use public money to support science and technology breakthroughs. The rules state that a club is only eligible to apply if it makes an advancement that benefits the overall field."

Yes I agree - but there is mention of work by medical practitioners so that could possibly be something (e.g. developing a novel injury dressing that allows training to continue in a certain way).

I can easily see how the very advanced medical / sports science teams at PL football clubs could feasibly be conducting useful research. And even more easily see how the clubs' bean-counters would like to pretend that were the case to save some tax.

Surely this rule cannot be correct though? "The rules state that a club is only eligible to apply if it makes an advancement that benefits the overall field"

Surely the entire concept of 'research and development' is only that you SEEK to make advancements. Surely a genuine project researching some qualifying aim, would be eligible, regardless of whether it is ultimately successful?

 

[nickbrighton]

Didn't the "Beckham Boot" come from the football sports injury people-its now used instead of a cast for lots of injuries across the board-that would certainly qualify

 

[albionalba]

Surely the entire concept of 'research and development' is only that you SEEK to make advancements.

Yes I agree - that is what research is - if you knew it would work then it would hardly be research. The guidance cited by @schmunk above makes that clear I think and the quote in my OP is from a journalist just summarising.

I'm less clear on if you have to share the advance you have made to 'benefit the whole field' or if you keep it quiet for competitive advantage (as in F1 etc who must have mega R&D tax claims I guess).

Presumably as noted by @nickbrighton the Beckham Boot was disseminated for the benefit of all.

 

[abc]

I can easily see how the very advanced medical / sports science teams at PL football clubs could feasibly be conducting useful research. And even more easily see how the clubs' bean-counters would like to pretend that were the case to save some tax.

Surely this rule cannot be correct though? "The rules state that a club is only eligible to apply if it makes an advancement that benefits the overall field"

Surely the entire concept of 'research and development' is only that you SEEK to make advancements. Surely a genuine project researching some qualifying aim, would be eligible, regardless of whether it is ultimately successful?

I have some personal experience of R&D tax credits and qualification does not require success.

However, it is a well meaning scheme that is massively open to abuse as the parameters are quite flexible and getting a claim past the HMRC has far more to do with how well a scheme can be made to look eligible through smoke and mirrors than whether it is a genuine R&D project. Large firms who can afford top accountants therefore benefit most. I have very little confidence that anything the top football clubs claim for is in the spirit of the scheme, rather than just exploiting grey areas in a tax scheme when the HMRC are not sufficiently resourced to investigate a sufficient number of claims to prevent fraud

 

[Gazwag]

Chelsea (the biggest claimant by far, naturally) have never done ANYTHING for the benefit of the wider game. FACT

But their R&D is in how to cheat FFP (or whatever its now called)

 

[schmunk]

But their R&D is in how to cheat FFP (or whatever its now called)

Their claims invalidated due to Man City having already made and implemented their discoveries...

 

[albionalba]

I have very little confidence that anything the top football clubs claim for is in the spirit of the scheme, rather than just exploiting grey areas in a tax scheme when the HMRC are not sufficiently resourced to investigate a sufficient number of claims to prevent fraud

Yeh and there are probably intermediaries who suck in the smaller clubs like DU in the OP that promise no win no fee and deliver half-baked claims that end up backfiring. Sometimes HMRC does investigate / target sectors that it feels are taking the p*ss so maybe that's what's happening.

I guess it's not much different to all the film and tv tax credits listed by the BFI for stuff you've never heard of in the name of the UK being a creative powerhouse (just not obvious to a person in the street wanting to watch something decent on the telly - sorry, wrong thread....).

 

[Hiheidi]

 

[FatSuperman]

Every year, in a certain FTSE100 I work for, we get the McKinsey boys in to interview us on all the R&D we've not been doing. Without fail, a portion of the money we spend building software is recorded as R&D and claimed as a tax credit.

In the grand scheme of things, it's a small amount - far less than Brentford are claiming. However it's still total bollocks.

 

[albionalba]

interview us on all the R&D we've not been doing.

Perhaps clubs like Brentford do something similar - medical team get interviewed about novel approaches etc, ground staff about the extra sprinkler here and there. I mean, it all adds up to big societal value doesn't it?