FA data on intermediary payments by football clubs could interest HMRC

While the new financial data itself does not reveal anything ground-breaking in comparison to earlier years, it will nonetheless be of interest to HM Revenue & Customs (HMRC), which can use the granular detail it contains to question football clubs on the nature of their arrangements with intermediaries.  

How and why the FA collects transaction data

The FA had previously only published information relating to transactions up to and including 31 January 2020, but the updated data now includes information for a further two years of transactions, up to and including 31 January 2022.  

The information is made publicly available by the FA in accordance with its own - and with FIFA’s - regulations on working with intermediaries. It sets out the amounts paid by football clubs to intermediaries, together with the name of the player involved in the transaction, the transaction type, the name and registration number of the intermediary, and the entity or entities that they represented in the transaction.

The data produced is derived from information filed with the FA by football clubs to record transactions that they have completed so that the FA can keep track of player movements.

Transactions in the Premier League

In the Premier League the value of the transactions showed a modest increase of approximately £9 million from 31 January 2020 to 31 January 2021 – from roughly £263m to around £272m – which remained broadly the same for the year to 31 January 2022.

The number of transactions also continued to rise, increasing from 684 transactions in the year to 31 January 2020 to 738 transactions in the year to 31 January 2021. That roughly 8% annual increase was followed by a further 3% increase in the year to 31 January 2022, when transactions totalled 764.

Transactions in the Championship

In the Championship the value of transactions dipped by around £9m between 31 January 2020 to 31 January 2021, falling to roughly £40m - before increasing again by £4m the following year.

Similarly, the number of transactions in the Championship decreased from 667 in the year to 31 January 2020 to 547 in the year to 31 January 2021 - a year-on-year decrease of roughly 18% - before increasing again by around 5% in the year to 31 January 2022.

What might HMRC do with the data

In addition to setting out the amounts paid by football clubs to intermediaries, the information released by the FA continues to include granular detail in relation to each player transaction completed during the relevant year. HMRC is understood to collate the data released by the FA and use it, among other things, to question football clubs on the nature of their arrangements with intermediaries.  

For example, HMRC might scrutinise the data in an attempt to identify examples of an intermediary working solely for a football club in relation to a player acquisition as well as working for a football club and player on a dual-representation basis in relation to negotiations regarding the acquired player’s playing contract. 

Though there is nothing preventing a transaction being structured on this basis in principle, there have been cases where HMRC has sought to challenge the way in which the football club has apportioned payments due to the intermediary for services rendered to the club, and, separately, to the player. It has also challenged clubs on whether the right amount of employment taxes have been paid in relation to the transaction as a whole.

What clubs should do

Recent guidance issued by HMRC requires clubs to keep detailed records to prove the split between the fee for the services provided to the club and those provided to the player. It is expected that HMRC will continue to question football clubs as to the reasons underpinning the structure of certain transactions using the most recent data released by the FA.  

In addition, HMRC is actively investigating the industry and those who operate within it and collating information from a range of sources. This, coupled with the record-keeping that HMRC expects of clubs, means that it is crucial that clubs keep robust, accurate and contemporaneous evidence of all services performed by intermediaries, and to whom those services are provided, to best arm themselves to defend challenges from HMRC regarding player transactions involving intermediaries.