The Sports sector is one of the many industries that does not take full advantage of the generous Research & Development Tax Relief that could be available. Golf Clubs regularly undertake qualifying activity as they look to advance their courses and the playing experience for their members and visitors but so few realise a claim can be made. Below are some examples of the types of activity that could qualify for an R&D claim:
- Golf course improvement – new hole designs/layout change (making the course longer/tighter)
- Introducing or improving Irrigation systems
- Development of fertilisers, seeds, growing techniques and air flow solutions
- Development of machines & technology on the course (hybrid electric mowers, use of drones, satellite systems and turf-care solutions)
- Environmental & Sustainability considerations within the course and clubhouse (less water usage, reduction of food waste etc)
- Clubhouse or hotel development (working within heritage sites to restore original structures, the integration of modern services and techniques into existing infrastructure, the development of strengthening solutions for aged buildings being repurposed)
- Software development of booking systems (integration with CRM, ERP and any marketing campaigns. App development)
- Development & Creation of sports recovery and spa facilities, nutrition, oils and toiletries
- Development of software to monitor and track players performance, swing speed, distance
What is the Tax Relief?
Research and Development Tax Relief allows a Company to uplift the cost of relevant expenditure by 130%. For example – a Club spends £100,000 on introducing a new irrigation and under green airflow system allowing them to adapt playing conditions and reduce water consumption. The expense is uplifted by a further £130,000 for Corporation Tax purposes resulting in an additional tax saving of £24,700 (using 19% as the CT rate), this is on top of the original tax allowance for the original £100,000 spend. The Club receive the £24,700 as a cash payment from HMRC.
If the Club was not profitable in that period, the R & D expenditure can be enhanced further and then surrendered for a cash payment. In the same example, the Club would receive a payment from HMRC for up to £33,350, (14.5% of the relevant expenditure) - a welcome addition to cash flow.
Costs you can claim
Categories of qualifying expenditure for the enhanced revenue deductions include:
- Staffing costs
- Externally provided workers
- Software costs
If you would like to know more, at JJMK we offer a free, no obligation, consultation to discuss your Club's activity and establish your eligibility to make an R&D claim. For further information please contact firstname.lastname@example.org