January transfer window: how do transfers work? Are there rules?

Clubs can not just let loose on spending.

That is because of the Premier League’s profit and sustainability rules (PSRs), which state that over a rolling three-year period, clubs must not report losses of more than £105m.

Last season, Everton and Nottingham Forest were hit with points deductions after breaching the PSRs. PSRs have been criticised by some clubs for being overly restrictive.

Clubs must submit a squad list after the transfer window closes.

A maximum of 25 players can be named in the squad list, and at least eight of these have to be ‘home, external grown’., external These are players who have been registered with any club affiliated to the Football Association (FA) or the Football Association of Wales “for a period, continuous or not, of three entire seasons, or 36 months, before his 21st birthday”.

However, clubs can still bring in under-21 players because they sit outside the squad size restrictions. For the 2024-25 season, these players must have been born on or after 1 January 2003.

Clubs can only have two players from other English clubs on loan at any one time.