Reeves employer NIC tax plans raise wind-up fears for football clubs
A total of 24 professional football clubs are in arrears to HMRC over PAYE debt, with experts fearing that number could rise due to Rachel Reeves’s budget.
Clubs including Championship side Reading and National League Southend United are among those who received winding-up petitions from HMRC in 2024.
But business experts have warned that changes to employer National Insurance contributions (NICs) announced by the chancellor late last year could pull more clubs into financial difficulty, with changes in the revenue stream expected to cost employers £25bn annually.
“The finances of so many football clubs are already precarious so the sudden burden of the extra NICs is going to push many of them dangerously into more debt,” said Graham Caddock, tax investigations director at advisors Lubbock Fine.
“HMRC does not have endless patience and it is under pressure from the government to improve debt collection. It will try to shut football clubs down if they get too far in arrears.
“HMRC have their own roving debt collectors and are increasingly turning to private debt agencies to try and enforce collection of outstanding tax debts.”
Active approach to HMRC
Southend United managed to get their winding-up petition dismissed in June and the club has since employed a specialist firm in anticipation of the incoming Football Governance Bill.
Reading’s order remains, with the club not yet sold by its current owner Dai Yongge.
Added Caddock: “Taking an active approach as early as possible with HMRC is always the best way to avoid going to court or being faced with a winding up petition.
“If managed correctly, HMRC can be very understanding and flexible with regards to setting up so-called Time to Pay instalment arrangements.”
Reeves’s budget also raised concerns over football players who are classed as non-doms, with the Premier League potentially facing an exodus due to changes in tax on overseas earnings.
“For those who have already been in the UK for four or more years as of 6 April 2025, any offshore income and gains will generally be fully taxable,” Sophie Dworetzsky, partner in the private client team of law firm Charles Russell Speechlys, told Morning Wire in October.
“The lack of an attractive longer-term tax regime for individuals moving to the UK from abroad might be regarded as an own goal.”