Embargos, HMRC Payment defaults, non payment of wages, the usual under Dai Wrongge

[WestYorksRoyal]

I'd completed forgotten. Last month it was confirmed by 10am, so silence so far today is ominous.

James Earnshaw clearly read this as he confirmed paying of wages 5 minutes after I posted it.

[Dirk Gently]

Anyone know if wages are confirmed as having been paid today?

I believe Dai has scheduled the payment for 31st February...

[Mid Sussex Royal]

I guess the key question now is how much money, if any, is left from the player sales and whether Dai is still providing any funds.

Hopefully we can get to exclusivity by next time.

[Fezza]

When is the next HMRC bill due?

[Mid Sussex Royal]

When is the next HMRC bill due?

22nd March

[Fezza]

When is the next HMRC bill due?

22nd March

Something to look forward to!

[Orion1871]

When is the next points deduction due?

22nd March

Corrected.

[Fezza]

When is the next points deduction due?

22nd March

Corrected.

This seems likely.

[Lower West]

I guess the key question now is how much money, if any, is left from the player sales and whether Dai is still providing any funds.

Crunch time comes when the matchday revenue dries up. All that's coming in is next season advance season ticket sales. Even then 20% is paid over to the HMRC. Treading water.

[East Grinstead Royal]

I guess the key question now is how much money, if any, is left from the player sales and whether Dai is still providing any funds.

Crunch time comes when the matchday revenue dries up. All that's coming in is next season advance season ticket sales. Even then 20% is paid over to the HMRC. Treading water.

16.67% actually.

[blythspartan]

I can’t remember if I imagined this, but does the deal with Sky improve significantly for EFL clubs starting from the 2024/25 season?

[Clyde1998]

I can’t remember if I imagined this, but does the deal with Sky improve significantly for EFL clubs starting from the 2024/25 season?

It's a 50% increase - probably doesn't really help very much given we're in League One.

[3points]

Much more sporting success there compared to our relegation rivals. A 3rd party observer might say Reading are gaining a continued sporting advantage compared to their competitors, by being able to maintain a superior playing squad which it can't actually afford.

And our rivals are all sticking to their budget?

That is a moot point.

Around 90% of EFL clubs rely on an owner paying the bills - the debts they run up in competition terms mean nothing at this level as long as you meet your obligations. Our owner hasn't so we are looked at - doesn't matter if say Oxford are losing money hand over fist paying for a squad they can't afford as the wages and tax are paid - so in competition terms they can "afford" them.

Our biggest problem, and why sporting advantage is not probably the best term - the likelihood is we could have played this season with the u21s/u18s making up the team and there would still have been every chance that Dai wouldn't have paid the tax.

What we should have done is looked to sell the likes of Holmes in the summer, we would have got more money for him and would have likely made the chance of late payment less - we didn't, had a player on the books that, at the time, we weren't using and was costing us money in wages that could/should have paid some of the tax - whilst lessening the tax burden itself.

Dai is at fault for everything here but we could have sold some players in a more calm way than just accepting low ball bids in Jan to cover the whole and we may - just may - not have lost more points this week.

I think this point is spot on and a subtlety which the likes of Simon Jordan miss in their outward in view of the machinations at RFC. Dai clearly made promises / assurances on funding the club this season otherwise there is no way players like Smith, Knibbs, Savage, Wing, etc would have joined. Likely that their wages are at the upper end of L1 levels you would imagine.

But if Dai can't be arsed to fund the club now, it doesn't matter whether the PAYE bill is £100k or £1m a month if we're losing money and the club is not self sufficient. The unfilled hole is a bit bigger. We must remember, from a cashflow point of view, most of our gate receipts is received in the summer / start of the season through season tickets

[Forbury Lion]

When is the next HMRC bill due?

I assume this is for employer tax and Ni contributions so if he doesn't pay the players then no tax and NI is due.
So in theory if they didn't pay any wages but instead gave all the players and staff an interest free loan, they might be able to defer tax and NI... could then write the loans off and claim tax relief on them, although technically the players would still be entitled to backdated wages.

None of this will work in practice, but it's great bad accounting theory which I find fascinating.

Also, is the penalty worse for paying players late or paying the tax man late? - if more severe for tax then they might want to hold back player wages until they have enough funds for both.

[From Despair To Where?]

From our experienced earlier this season, not paying the players results in points deductions, not paying HMRC results in a winding up petitions.

[Dirk Gently]

When is the next HMRC bill due?

I assume this is for employer tax and Ni contributions so if he doesn't pay the players then no tax and NI is due.
So in theory if they didn't pay any wages but instead gave all the players and staff an interest free loan, they might be able to defer tax and NI... could then write the loans off and claim tax relief on them, although technically the players would still be entitled to backdated wages.

None of this will work in practice, but it's great bad accounting theory which I find fascinating.

Also, is the penalty worse for paying players late or paying the tax man late? - if more severe for tax then they might want to hold back player wages until they have enough funds for both.

Loans to staff in lieu of pay are still seen as taxable benefits and HMRC would be down like a ton of bricks on this sort of thing. Not just having to pay NI & PAYE, but probably also prosecution.

This is exactly the type of scheme that got Jimmy Carr into so much trouble - money in goes to offshore company (in his case IoM), and he doesn't take salary, he takes "Director's Loans" from that company - which are never paid off so no tax is ever due on them...

And the process for "Director's Loans" is much more friendly than for employee loans.

[Elm Park Kid]

I just got some troubling information concerning our finances. Basically, if Dai doesn't agree to the sale very soon then we'll be getting the 2-point suspended deduction in April. Even if he does it depends on whether the new owner is willing to give us money before the sale is finalised.

[PieEater]

That aligns with the what STAR said in the EFL meeting

ST noted sales in the January window are funding the Club, and that the original expectation was that this would fund to April but may now only cover up to, or part of, March

[Orion1871]

I just got some troubling information concerning our finances. Basically, if Dai doesn't agree to the sale very soon then we'll be getting the 2-point suspended deduction in April. Even if he does it depends on whether the new owner is willing to give us money before the sale is finalised.

Not exactly a revelation. Is anyone expecting us not to get the two points suspended taken from us?

[Armadillo Roadkill]

I just got some troubling information concerning our finances. Basically, if Dai doesn't agree to the sale very soon then we'll be getting the 2-point suspended deduction in April. Even if he does it depends on whether the new owner is willing to give us money before the sale is finalised.

Not exactly a revelation. Is anyone expecting us not to get the two points suspended taken from us?

Maybe hoping we don't get further points deducted rather than expecting. And even if we get a further deduction, hoping that we have enough points to avoid being relegated by it.

It makes sense to me to try to remain positive. This is all hard enough to cope with without giving up hope.