Seven football clubs hit with winding up petitions

Seven football clubs hit with winding up petitions

May 27, 2024

HMRC landed seven UK professional football clubs with winding up petitions for unpaid tax in 2023, the highest figure since the start of the pandemic

Coventry City, Southend United, Taunton Town, Wigan Athletic and Chorley Football Clubs were all in receipt of winding up petitions, with Reading Football Club receiving two, revealed an FOI request by UHY Hacker Young.

The worst year for clubs was 2020 at the height of the pandemic when 10 clubs faced tax demands from HMRC.

Among the financial pressures football clubs faced were high interest rates, which made debt more expensive for football clubs.

Many clubs built up large debts during the pandemic as a result of non-existent ticket sales during endless lockdowns. Some clubs have been unable to repay their creditors or meet their tax obligations with HMRC.

Football clubs have also been struggling with spiralling inflation, particularly in employee salaries and energy costs.

Some clubs have increased ticket prices in an effort to stabilise their finances, however such measures have broadly proved insufficient.

UHY Hacker Young said that the current financial pressures are particularly affecting smaller clubs as ticket sales account for a higher proportion of their income.

Brian Carey, partner at UHY Hacker Young, said: ‘Covid had the double impact of slashing football clubs’ income while causing their expenses to balloon. The Covid pandemic is long gone but the financial impact on football clubs still lingers.

‘Many clubs were forced to take on large amounts of debt to stay afloat during the pandemic and high interest rates made servicing this growing debt increasingly expensive.

‘Smaller football clubs have been hit the hardest. While they have far smaller wage bills than larger clubs, they also typically have far less lucrative sponsorships and television rights. For these clubs, lost ticket revenue has proved very hard to replace through other revenue streams.

‘With the cost-of-living crisis continuing to curtail individuals’ spending power, there is a limit to how much cost can be passed onto the fans. Football clubs that have raised prices too fast have seen fewer punters through their doors.

‘Consumer spending is now recovering – albeit slowly. If this trend continues and interest rates start to come down, the financial pressures on football clubs will be significantly reduced.’

2021 and 2022 both had fewer than five winding up petitions filed against football clubs.