Reading: English Football League adds non-payment of tax to transfer embargo
- Published
Football finance expert Kieran Maguire explains how latest charge could hurt Reading
The English Football League has added non-payment of tax to the reasons Reading are under a transfer embargo.
The non-payment of PAYE tax to HM Revenue & Customs is the latest EFL regulation that the club is accused of failing to comply with., external
The Royals were last week charged with failing to pay their players' wages on time on three occasions last season.
Owner Dai Yongge has also been charged with causing the club to be in breach of EFL regulations.
Reading and Dai have until 16:00 BST on Thursday, 29 June to respond to those charges.
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, from the University of Liverpool, told BBC South Today.
"The club has effectively kept the money back for itself, presumably to pay some other debts, and not pay the tax authorities."
Managerless Reading were relegated to League One last season for the first time in 21 years following their disappointing 2022-23 campaign.
A collection of fan groups, who have called themselves 'Sell Before We Dai', are calling for owner Dai, who bought Reading in 2017, to sell the club as soon as possible.
Maguire said all the charges laid against Reading paint a bleak picture that could have a significant impact on the club, with a "risk" of administration.
"It's a pretty grim charge sheet and it is indictive of financial stress at the club," he added.
"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."
Prior to the club being charged by the EFL last week, Royals chief executive Dayong Pang posted a letter to fans 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."