Last week, it emerged that several Premier League football clubs, including Chelsea and Nottingham Forest, had claimed what The Times described as “millions in public money using a tax scheme designed to support innovations for the public good in science and technology.”
In total, The Times investigation found that 28 of the UK’s leading sports clubs in football, rugby and cricket had claimed £13 million in R&D Tax Credits since 2019.
To secure £13 million in tax relief under the RDEC scheme, these clubs would need to demonstrate that they collectively spent over £120 million on R&D projects that genuinely advanced science or technology.
At an average annual employer cost of £60k per scientist, this would be equivalent to employing 2,000 full-time scientists for a year, or over 70 scientists for each club.
Later in the week, The Guardian revealed that Brentford FC had “received £3.23m in public money” over two years for what it described as projects in fields such as “sports science, medicine, training, and tactics.”
The heart of the debate sparked by The Times, The Guardian and others seems to be whether it is moral for clubs in one of the richest sports leagues in the world to receive “tax breaks” at a time when the government is facing severe financial pressure.
Some argued that R&D Tax Credits should be reserved for more worthy causes – ie “innovations for the public good” – rather than benefiting wealthy football clubs, many of which are foreign-owned.
A vigorous discussion played out on social media, with most R&D advisors arguing that there is no barrier to professional sports clubs claiming R&D Tax Credits, provided they meet the standard eligibility requirements that apply across all sectors.
With the exception of Brentford FC, none of the clubs named disclosed the nature of the R&D projects they claimed for. This lack of transparency inevitably led to speculation that some clubs may have taken advantage of historically weak oversight of the R&D regime by HMRC, potentially encouraged by commission-based R&D Tax Credit advisors.
The role of commission fees in incentivising claims was highlighted in the case of Dundee United FC, which claimed £1.27 million in R&D Tax Credits in 2021.
Dundee United’s 2024 accounts disclosed that the R&D advisor who prepared the claims, believed to be the Glasgow-based firm ZXL, was paid 20% commission for its work. If this was a flat-rate fee charged on the full claim amount, it would equate to a commission payment in excess of £250,000.
This type of arrangement raises the question of whether commission-driven R&D advisory firms are incentivising claims that stretch the limits of what truly qualifies as scientific or technological advancement.
The fact that a Dundee United R&D claim is now under HMRC enquiry suggests that this type of claim is beginning to attract greater scrutiny. However, questions remain about the extent to which HMRC has been able to apply consistent oversight across the wider R&D Tax Credit regime.
Applying the R&D Guidelines to sport
Without access to the precise details of the projects or the financial breakdown of the claims, it would be wrong to assume that none of the work claimed by sports clubs qualified as R&D or that the associated costs were anything but legitimate.
There is no suggestion that any of the clubs mentioned acted improperly or failed to comply with the rules.
To explore how the R&D Guidelines might apply to sport, I spoke with Gavin Bate, the former HMRC technical leader for the R&D regime. In this role, Gavin co-authored the DTI [BEIS] Guidelines, which define the meaning of research and development for tax purposes.
He also produced HMRC’s original instruction manual on the R&D regime, known as the CIRD manual.
While Gavin has not reviewed any of the sports club claims in question and cannot comment on specific cases, he shared his thoughts on how the principles of the R&D regime might apply in this context.
Gavin emphasised that the key to assessing any R&D claim is understanding how the BEIS Guidelines define science and technology. He explained that unless the work falls within these definitions, it would not be eligible for relief.
“In examining any [R&D] claim it is necessary to have regard to the definitions of science and technology in the BEIS guidelines. Unless the work is in a field of science or technology, as defined, it will not be eligible for relief.”
“The meaning of science for this purpose is defined as the systematic study of the nature and behaviour of the physical and material universe. The Guidelines make clear that work in the arts, humanities and social sciences including economics is not science for this purpose.
“By analogy, it is clear that research specifically into sport as the goal of the research would not qualify even if conducted using scientific methodology, although elements of the research might qualify if they are focused on more fundamental properties of human bodies or materials.
“When the Guidelines were originally written, it would have been understood that systematic work seeking to advance understanding of human physiology would qualify as quasi-medical work. Examples might include how best to promote muscle growth, or tissue repair in athletes. However, work on a striker’s mindset, or the most effective training regime or tactical formations to achieve results would not.
“Similarly, innovative work on the technology of stadium construction, or establishing the conditions for optimising turf growth and repair might qualify, although work on what features made fans happiest would not.”
The challenge of defining R&D in professional sport
While the principles outlined by Gavin Bate provide a clear framework, their application in real-world R&D claims, particularly within professional sport, remains open to interpretation.
The challenge lies in distinguishing between routine activities that support a club’s commercial operations and work that genuinely pushes scientific boundaries.
This distinction has become even more important given the lack of definitive case law on what constitutes ‘science’ for R&D tax purposes, leaving the correct interpretation of the Guidelines open to judgement.
The merits of specific claims cannot be commented on without further details. However, it is clear that football clubs are not explicitly barred from making R&D claims. Nevertheless, some claims may have gone through without rigorous HMRC scrutiny, raising questions about whether all cases truly meet the criteria for R&D.
Given the complexity of the R&D tax regime and the subjective nature of eligibility assessments, some claims may have been approved without HMRC conducting an in-depth review of whether they fully met the requirements.
One of the most striking aspects of the reported claims is their scale. A key concern, therefore, is whether highly paid professional footballers have been classified as participants in any of the R&D projects.
For instance, if training regimes were one of the subjects of the research, these can’t be conducted without people doing the training, so all or part of the salary costs for the team might have been claimed as part of the cost of the research into the training method.
Obviously, it would be wrong to claim the entire salary costs, but arguments may have been made to say that 10% of their time was spent in this particular training regime, and therefore 10% qualifies as a cost of conducting the R&D (as the R&D could not have happened without the people).
This raises significant questions.
In reality, players are primarily employed to perform on the pitch, so unless their R&D activities are clearly separated from regular training and match preparation, it would be difficult to argue that their involvement is genuinely driven by the pursuit of new scientific knowledge.
However, if research staff, such as PhD scientists or dedicated sports scientists, were investigating the physiological effects of training methods or recovery techniques, then such work could constitute a valid claim. These are important distinctions that are often overlooked.
Similarly, a groundsman maintaining a pitch to ensure it remains in prime condition for matches would not qualify as R&D, as this is routine maintenance. However, if researchers were conducting systematic studies on different turf compositions or testing innovative methods to enhance pitch durability, then this could be seen as advancing knowledge in plant or materials science.
The distinction lies in whether the work is routine or genuinely pushing scientific boundaries, an area that, until now, may not have been subject to detailed review.
HMRC has consistently stated its commitment to tackling non-compliant claims, but with finite resources and a high volume of submissions, its ability to apply detailed scrutiny to every sector, including professional sport, has been a challenge.
If resource constraints or competing government priorities have played a role, this raises important considerations about how compliance efforts are targeted.
Alternatively, if the issue stems from a lack of clear case law defining ‘science’ for tax purposes, then the debate may be less about enforcement and more about whether the existing framework provides sufficient clarity.
Either way, the emergence of large claims from professional sports clubs is likely to prompt further scrutiny, pushing HMRC to provide greater clarity on how the R&D regime applies in this sector.
Article written by Rufus Meakin
Rufus Meakin works with tech companies to help ensure their R&D Tax Credit claims are accurate and defendable.
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