Finance guru gives blunt take on Sheffield Wednesday’s embargo, HMRC bill and Dejphon Chansiri

Sheffield Wednesday remain under a registration embargo as the club’s off-field concerns continue. Last week saw the club hit with an EFL punishment owing to amounts due to HMRC.

On Monday owner Dejphon Chansiri laid bare the real struggles at Hillsborough alluding to cash-flow issues and admitting that players and staff at the Championship club may not get paid on time or in full. Thankfully that particular hurdle was cleared after salaries were paid on Tuesday. However the HMRC debt remains unpaid. Chansiri, in an explosive interview, suggested that 20,000 fans chip in with £100 each to offset the £2m black hole. Chansiri says that this would be repaid with interest but never goes into detail exactly how that would work.

To get a clearer picture of the financial situation at Hillsborough we spoke with respected football finance guru Kieran Maguire. Here, we run through some of the key issues to come out of Chansiri’s latest bombshell interview.

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Q: What exactly does this embargo mean for Wednesday?

KM: I think it’s symbolic more than anything, given we’re not presently in a transfer window. But the EFL now has a relationship with the tax authorities along the lines of they must be advised, ideally by the clubs, of delayed payments. They must be kept in the loop and off the back of that the automatic response is giving clubs sanctions where they’re not allowed to buy, sell or loan players.

This will really hit Sheffield Wednesday if it’s still outstanding in January. But often transfers start earlier than that so the wheels are already in motion. Wednesday won’t be able to sign players until this is lifted and it’s a simple thing to get lifted: pay the outstanding tax. But remember, this is not Wednesday paying tax in the vast majority of cases. It is VAT being collected on ticket sales, merchandise sales, PAYE, national insurance that has been deducted from payroll. So it’s not the club’s money, it’s the taxes the club is collecting on their behalf. They’re not alone. Reading and Sutton have a similar embargo.

Q: If they reach the 30-day limit what awaits them?

KM: If we look at Reading Football Club as a precedence, there’s a range of sanctions from extending the embargo – which I don’t think would be much of an issue – to the one that fans fear most of all which is points deductions. We’ve seen that happen to Reading a number of times over the last few years. I think there is a similar relationship between the fans and the owner there that we are seeing at Hillsborough at present.

Q: Is a winding up order from HMRC the last resort?

KM: It’s not something that HMRC would want to do, because they want companies and institutions to survive. If they survive then they are employing people and therefore tax is being collected. HMRC do have a responsibility to collect tax on behalf of the taxpayer if they feel that individual companies are not co-operating. We’ve seen it (threat of winding up) on regular occasions at Southend United. What tended to be the case was it would get as far as the court steps and then there would be a mysterious payment. It’s bluff and counter-bluff.