Finance expert claims Reading’s new charge could see them “risk” going into administration

A finance expert claims Reading’s new charge could see them “risk” going into administration as problems worsen at the club.

On the 23rd of June, the EFL added non-payment of tax to HM Revenue & Customs as a reason why the Royals were placed under a transfer embargo.

They were charged with failing to pay their players’ wages on time on three occasions during the 2022/23 season with Owner Dai Yongge also recieving a charge, causing the club to be in breach of EFL regulations.

What does ‘Non-payment of PAYE owed to HMRC’ mean for the future of #ReadingFC?

Thoughts of football finance expert @KieranMaguire ⬇️

Club has until 29th June to respond to EFL charges. pic.twitter.com/xFQMDgwoNK

— Lewis Coombes (@LewisCoombes) June 23, 2023

Reading and Dai have until 16:00 BST on Thursday the 29th of June to respond to those charges, while the Royals were initially placed under a transfer embargo for breaching profit and sustainability rules.

“If a club fails to pay PAYE it’s a red flag,” football finance expert Kieran Maguire said to BBC South Today this week.

“The club has effectively kept the money back for itself, presumably to pay some other debts, and not pay the tax authorities.”

Reading, who are still managerless, with pre-season starting in a few weeks, were relegated to the third tier last season for the first time in 21 years.

Now a number of supporter groups, who have come together with the name ‘Sell Before We Dai’, urge for owner Dai, who bought Reading in 2017, to sell as soon as possible.

Maguire went on to explain just how serious this matter is, saying: “It’s a pretty grim charge sheet and it is indictive of financial stress at the club.

“When Reading are trying to recruit players over the summer those players will ask themselves ‘do I want to go somewhere which has been late paying its employees?’.

“If an organisation is late paying taxes and carries on then HMRC has a legal obligation to take things further and we could potentially see a winding-up petition and things get messy.

“If there is no change of ownership then administration has to be seen as a risk.”

Just hours before Reading were charged by the EFL, Royals chief executive Dayong Pang issued a letter to the fabase where he said he was “confident” the club would “fully correct the mistakes that were made many years ago”.

He added: “As a club, financially we continue to face a number of significant challenges and our owner, Mr Dai, is working very hard to resolve those issues to ensure the future of Reading Football Club is stable, successful, progressive and positive.”

This is what fans are saying as the finance expert claims Reading’s new charge could see them “risk” going into administration…

@rfcjezza: Really useful to hear Kieran’s insight, thank you for sharing

@royalex_B: Not going to completely blame the EFL but why are they allowing these crooks to pass the ‘fit & proper’ tests? Our one in particular failed the test trying to buy Hull. It’s the fans and their clubs that are punished not the owners. The EFL will never hold themselves accountable

@Huntyroyal: Sad times ahead

@Gidsentinel: I can not overstate this enough, I am so fucking and exceptionally delighted that our club is run properly and not allowed to piss itself out of existence. Little things to be taken for granted I know but there’s a definite happiness that our house is in order

@jonnykyte: #SellBeforeWeDai

@NJK20171: New ownership is vital for the future of this club. Whatever the reason the money is not there. New owner or Toast. Period. Heartbreaking 💔 but true. #readingfc

@PAN1F: If anyone is sitting there thinking we will be OK – please think again. The club is on it way to going out of existence. Doing nothing is not an option. #readingfc #SellBeforeWeDai

@Huntyroyal: So worth a watch on what’s going on with club’s finances and future 😡 💙🤍 #readingfc

@randallsroyals: More importantly…. What’s the deadline for the club to respond to its fans?!! 🔵⚪️🔵⚪️ #sellbeforewedai

@clarks1481: Depressing that is the only word

@PhilipShortland: If only the boards of failing clubs could be removed and the club put into special measures. How many more red flags do we need to show Reading are in no fit state to start the next season?

@JulianBarker111: Worrying for Reading, but how many other clubs are “a step away” from being in a similar position.

@itsrickyb: I’ve never understood why the leagues don’t act sooner if payroll is delayed and taxes go unpaid.

@blosdacat: Can you send an advance copy of your new book to Dai Yongge although I think it maybe too late… 7th oldest football club and could be gone forever…

@Stephen_Noakes: Feels like the owner has given up and if so, we are well and truly in the brown stuff.

@grumpy_vik: The plug hole is a gurgling… Absolute mess.

Dai your time is up #sellbeforewedai https://t.co/63Ha86HYVn pic.twitter.com/ffZw0DeUsw

— Jacob (@RFCJacob) June 22, 2023