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To furlough or not to furlough?

 A couple of clubs have recently announced the signing of new players in the January window and the simultaneous furloughing of players who are, as a consequence, deemed to be surplus to requirements or who need to be de-registered to stay within squad limits.  One is reported to have brought in 9 new players and furloughed 6 as a direct consequence and others are reported to have done similarly.   This was surely not what the furlough rules were designed for, and it will doubtless stick in the throats of many taxpayers to be paying the salaries of football players when their employers can afford to bring in, and pay, others in their place.

Some people have sought to defend the practice saying that the vast majority of clubs outside the top flight have used the furlough scheme (undoubtedly true) and many brought in new players in the window (also true).  But there is a huge difference between the situation where a club used the furlough scheme for players before the 2020/21 season started and then took them off furlough when the games got under way, and that where clubs use the furlough scheme as a way of financing the bringing in of new players half way through the season.

The purpose of the Job Retention Scheme was to prevent the loss of jobs.  Bringing in new players is in effect making the surplus players redundant, and in a normal season the employer club would either try to sort a transfer to another club or pay their contract up.  By putting these players on furlough, the clubs involved have effectively passed the cost of paying the contract up on to the tax player, with absolutely no prospect that the employment will continue after the end of the season.

Nor is the situation comparable to one where clubs continue to use the furlough scheme for some of their non-playing staff, whilst having players not on the scheme.  Clubs are, like every other business impacted by the pandemic, entitled to use the scheme to help them survive a pro-longed period of hugely reduced revenue and for many it has been a vital lifeline.  But if a club put a commercil manager on furlough and then recruited a new commercial manager to do the work there would rightly be an outcry.  Players should be no different.  If a club can afford to bring in new players, it can afford to pay its existing ones.  If it cannot afford to do both, it should not bring in new players.  No new person should be placed on furlough as a direct consequence of the recruitment of a new person.

I am sure HMRC will be investigating whether this practice is an abuse of the rules.  Whether it is or it isn't a breach, it is in our view not a proper use of the Job Retention Scheme.



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