Taxing times for football clubs

“Football clubs are facing more scrutiny than ever before from tax inspectors,” says Frank Goldberg, senior manager at BDO, “HM Revenue and Customs is increasingly looking into the affairs of clubs and not just those in the Premiership. Failure to submit the required returns and make the correct payments on time is increasingly leading to legal proceedings being brought against the relevant club.

In addition to current PAYE, National Insurance contributions and VAT, HMRC pay particular attention to ‘Golden Hellos’, image rights and VAT recovery on agents’ fees.   Simply ignoring them is an unforced error, akin to scoring an own goal.  

Frank Goldberg continues: “We have recently come across clubs funding working capital by not paying their PAYE, National Insurance or VAT to HMRC. With the recent financial crisis many clubs may find fans staying away from matches causing a reduction in gate receipts.

"HMRC has never accepted that defaulting on taxes is an appropriate way to manage a club’s cash flow and it takes a dim view of those who do. Clubs with even the slightest concerns should seek expert advice.”

Clearly directors will want to keep any HMRC review out of the floodlights and matters can quickly and easily escalate without the appropriate advice. BDO recommend taking straight forward measures, such as pre-emptive dialogue with HMRC to agree payment plans if arrears are an issue and ensuring tax and VAT returns are submitted on time. In addition by reviewing current procedures clubs may be able to minimise the cash they need to pay.

-Ends-

For more information or to talk to Frank Goldberg, please contact Matthew Longbottom at BDO on 020 7893 2717 or email matthew.longbottom@bdo.co.uk

Notes to editors:

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