There has been considerable coverage recently around football clubs claiming R&D (Research and Development) tax relief. For those unfamiliar, these incentives are provided by the UK Government to support businesses engaged in scientific or technological innovation and are a cornerstone of the country’s innovation strategy.
Much of the recent media scrutiny has centred on Dundee United, where reports suggest the club claimed staff and players were spending 24% of their time on R&D activities, and the club’s chef was devoting as much as 80% of their time to similar efforts. It’s clear that the club and its advisors, ZLX, adopted a particularly aggressive interpretation of what qualifies as R&D for tax purposes. Their claims are now being scrutinised by the relevant authorities.
This case has fuelled speculation that other clubs under investigation may have taken similarly questionable positions, and it has reignited public debate over whether football clubs can realistically be considered as engaging in R&D in the context of tax relief.
We take a more nuanced view. From our experience in the sports sector, we are well aware of the substantial investments clubs are making in areas like data science, performance analytics, and the application of cutting-edge sports science.
Consider the parallel: we think it’s unlikely that a Formula One team in its pursuit of peak performance on the track, would be subject to the same level of public scepticism that their activity constitutes R&D. So why should a football club striving to push the physical and tactical limit of the human body can achieve on the pitch be subject to different standards?
When claiming R&D tax relief in the sports sector, it is vital to include only activities that contribute to scientific or technological advancement. For instance, collecting and analysing player data to improve recovery through nutrition may qualify if it addresses scientific or technological uncertainty. However, routine activities by players during training sessions do not qualify, even if producing data, as it is not an activity undertaken to resolve specific scientific or technological uncertainties. Clearly establishing these boundaries of the R&D project ensures sports companies remain compliant with the scheme.
The ultimate responsibility lies with clubs to approach claims with integrity and to seek sound, qualified advice. From our extensive sector experience, we would advise:
- Engage the right peopleensure key stakeholders in your R&D projects are involved in preparing your claim. HMRC places significant emphasis on the input of competent professionals whose expertise substantiates the R&D claim. Work with advisors who are willing to stress test, challenge assumptions and ensure claims are robust and well-grounded.
- Keep thorough recordswhat evidence do you have that would back up your team’s time involvement in R&D activity? Implementing effective project management and reporting systems during the research phase will significantly strengthen your claim and streamline the process later.
- A pragmatic approachtake a bird’s-eye view of your claim. Is there anything in there that immediately stands out as unrealistic to an impartial observer? For example, can you credibly argue that a professional footballer – whose primary role is to play the game – spends a quarter of their time engaged in scientific research?
If your club is investing in innovation through performance analytics, sports science, or technology, then make sure your R&D tax relief claim stands up to scrutiny.
Speak to our specialist Sports team today for expert guidance, rigorous claim preparation, and sector-specific insight that keeps you compliant and maximises your relief.
Furthermore, if your organisation is concerned over historic R&D claims made our tax investigations team can assist.
