HMRC investigates 33 football teams over tax exploit claims - 'The Times'

HM Revenue & Customs faces a macro-investigation that could be a big problem for the Premier League and several categories of British football. As published on Monday by the prestigious 'The Times', the UK Treasury has indications of tax fraud by up to 33 different sports clubs.

According to this media, HMRC has found that numerous entities would have taken advantage of a tax scheme to incorrectly apply for a series of grants. These were intended to support research and development in science and technology. However, the agency estimates that £17.4 million of public money would have ended up in the coffers of these sports companies since 2019. These include a number of elite football clubs.

In the United Kingdom, the Treasury itself is a non-ministerial body that manages both fiscal control and the management of grants, so it was HMRC itself that distributed them. In its rules, what was required to apply for these grants was that the applicant company must have achieved or be working towards a breakthrough in science and technology for the field in general, not just for its own business.

Four Premier League clubs reportedly benefited

The British newspaper's investigation indicates that Premier League clubs such as Chelsea, Fulham, Nottingham Forest and Brentford are said to have benefited from this R&D program. When the first three were questioned, none of them wanted to comment or justify the application of the aid to their activity. For their part, the Bees claimed some time ago that they had been used to help “half a dozen PhD students to carry out research” and the “publication of academic articles”.

Chelsea apparently received some £3 million between tax relief and R&D payments from the tax authority between 2020 and last year. Nottingham Forest claimed £607,000 over the 2021-22 financial year and Fulham claimed £758,000 in different installments between 2019 and 2024.

Outside the Premier League, the aforementioned media also points to the Scottish Dundee United. In his case he would have asked for 1.28 million pounds in aid through the program of technological and scientific research, but the British Treasury would have already claimed them. And in the event of losing the dispute with HMRC, the historic Tannadice Park club will demand compensation of 20% of the amount from its tax advisors.

Tax advisors encouraged to apply for subsidies

This is where one of the problems lies. The British media previously published in an investigation that some of the clubs were requesting this aid on the advice of external companies. In the case of Dundee United, the Scottish club submitted its application with the help of ZLX, a consultancy firm specializing in tax deductions.

This office, based in Scotland, claimed on its website that it could obtain grants from the R&D program on the grounds of research into spectator interaction, the media or measures against COVID-19 in sport. And it would not be the only one that would have been encouraging entities to exploit the hole in the tax system.

Over the past few years, HM Revenue & Customs has been heavily criticized for its management of science and technology research grants. Officials are accused of failing to properly verify applications, raising the cost of the program from £1.1 billion in 2010 to £7.5 billion in 2023. Since 2020, the balance sheet shows an expenditure of 4.1 billion and already in 2024, the British Treasury was forced to admit that it had not taken measures to put an end to the misuse of the scheme for five years.