21 football clubs in arrears with HMRC
Will Drysdale, Reporter, Accountancy Daily
HMRC is pursuing football clubs across the country for VAT and corporation tax debts with at least 21 falling into arrears with their payments
The low profitability of UK football clubs is the reason for many struggling to keep up with tax bills, including PAYE, VAT and corporation tax bills with 229 football clubs across six leagues in the UK being monitored.
Covid is still to blame for many economic issues, with football clubs not shielded from its impacts. Empty stadiums during the pandemic meant ticket sale revenue was lost, and the empty stadiums continuing until social distancing guidelines were restricted means they are playing catch up.
However, with energy bills continuing to rise, along with salaries of players and staff, transfer fees and all the costs associated with them are making it more difficult for clubs to keep up with the payments.
According to Lubbock Fine, HMRC is worried football clubs are prioritising other expenses, such as grounds maintenance, and player fees and salaries in front of paying their tax liabilities.
Graham Caddock, director at Lubbock Fine said: ‘HMRC often feels that it is at the back of the queue for debts and is now taking a much more aggressive approach to collect those overdue liabilities.
‘Many football clubs opt to delay tax payments – or not pay altogether. Clubs may prefer to face a fine from HMRC to upsetting other key stakeholders in the business – like players or suppliers.’
At the end of Q3 in 2023 the total amount of tax owed to HMRC was £39bn, with plans under Labour to tackle this problem the approach from HMRC could be gearing up to become more aggressive.
Football clubs owing substantial amounts of tax will be easier targets for HMRC, but just as with individuals, HMRC can issue winding up petitions and pursue them using debt collectors, which then comes with bad publicity for the clubs.
Caddock said: ‘It is quite common for HMRC to pass the collection of debts to external debt collection agencies. These agencies are not afraid to arrive unannounced at business premises demanding to be paid.’
Additionally, the clubs could go down the route of paying HMRC monthly if approved, through a Time to Pay (TTP) arrangement, which thousands across the country have used to manage their tax debt.
