What of the R&D claims by football clubs?
What of the R&D claims by football clubs?
It has been interesting to track the development of the stories in the press last week about research and development (R&D) claims made by football clubs. As you can imagine it set the ‘below the line’ commentators off in a frenzy, with people happy to accuse the clubs of fraud and HMRC of corruption. But there were also some funny comments – I enjoyed the one which said, ‘I suppose Chelsea were doing a scientific study into boredom if their past two matches are anything to go by’.
As somebody who has never had the slightest interest in football, I can’t comment on Chelsea’s recent performance, but I can add some words of caution. We simply do not know the basis on which claims have been made. I have heard stories of some clubs making inflated claims on the basis of very flimsy interpretations of what is meant by R&D and it would not surprise me if some of these claims don’t stand up to scrutiny. But, equally, sports science is a massively important part of modern sporting endeavour – a 2019 study valued its contribution to the economy at £3.9bn. So it would be surprising if at least some of the major sporting clubs were not investing money into cutting edge research. I don’t know enough about the issue to be able to say whether there is activity which qualifies for R&D relief but I wouldn’t rule it out.
I suspect that there may be some bandwagon effect here with small clubs seeing their larger rivals claiming relief and then putting in their own claims, perhaps on more speculative grounds.
So, yes, I am sure that there are some claims here which need to be challenged, but things are perhaps not quite as black and white as these reports might suggest.
If you do one thing...
See the updated guidance in HMRC’s Company Taxation Manual on the small profits rate and companies in liquidation (tinyurl.com/hmrcctmfeb).
