BBC WM, however, stated that the suspension of Wyness and the missing tax payment are not related.
Aston Villa have suspended CEO Keith Wyness. The move comes at the same time as it`s emerged that Aston Villa are working with HMRC to resolve an unpaid tax bill. However, BBCWM understands that the suspension of Wyness and the unpaid tax bill are in no way connected. #avfc pic.twitter.com/c7atKhy7W2— BBC WM Sport 95.6 (@sportbbcwm) June 5, 2018
With these latest stories coming into play, confusion remains rife amongst the Aston Villa fanbase. That’s to be expected. However, with the club seemingly in limbo in regards to many of the possible choices they face, where do the club go from here? What’s next? Let’s try to break this down.
Please remember that speculation is rife, and that it features in this article. Don’t worry, I’ll make my guesswork clear.
No, Aston Villa didn’t simply forget to pay their tax
This should be crystal-clear. Self-employed people can forget to pay tax, smaller SME’s might forget a payment. A massive, monolithic business of the size and scale of Aston Villa does not and can not afford to forget to meet its tax obligations. With the Government of the United Kingdom and HMRC coming under criticism after their seemingly lax approach to giants like Google and Amazon, they take their cash where they can get it. Everyone in-between giant corporations and the self-employed are going to be scoped out by HMRC, with little to no discrimination. Only the biggest and the smallest can seemingly find cracks in the system. Aston Villa will not be privy to those and fall into that middle bracket - the people who must pay up, correctly and on-time. There are no ‘cash-in-hand tasks’ for football clubs. There are no massive loopholes for football clubs. Tax is not something that is forgotten by a company of the scale of Aston Villa.
What’s the deal, then?
Well, if Villa didn’t forget to pay the tax - it’s possible that someone within the organisation did. This is speculation. If the department responsible for filing and paying tax didn’t do exactly that, then Aston Villa will have not met their obligations to Her Majesty’s Revenue & Customs.
However, and this is an interesting point, what if Villa filed their tax and were unable to pay it?
Cash flow issues?
Bang on. Occam’s Razor in motion.
While this remains speculation, the simplest explanation for this current crisis is the most plausible. Villa are owned by a Chinese Businessman - Dr Tony Xia. While he might have deep pockets, those pockets are located in China.
Remember when he bid for Millennium Films via his Recon organisation? Yeah - that deal fell through because, in essence, China do not want money to leak out of the country in a way that it was happy to abide by when Xia bought Villa.
In fact, this hit Xia and Recon in the pocket. They paid Producer Avi Lerner 20 million American Dollars as a down-payment on Millennium before pulling the plug. The Chinese Government have been clamping down hard on deals like this.
This is backed up by reporting made by the Financial Times. A graph in the report entitled ‘China outbound investment down nearly 41% in 2017’ shows outbound investment hit a fresh peak in early 2016 before collapsing throughout 2017 and beyond. A key paragraph states that Beijing have hit down on deals that don’t fit their strategy.
These deals? They don’t want to see investment in a number of regions including sports and entertainment. If Xia’s cash is tied up in China, that’s a worry. While he certainly might not be cashless, regulations will prevent him from bankrolling Villa. Insider Media discussed Villa’s financial situation earlier this year - and even the board acknowledged it within a statement.
“The cash flow forecasts indicate a requirement for additional funding form the ultimate parent company to support the group’s operations for a period of at least one year.”
If you’re looking for the simplest explanation, this is it. Villa require funding from Recon, based in China, that they can’t get. This could be because of a multitude of reasons.
How do Villa get out of this one?
The latest news is that Villa are ‘working with HMRC’ to pay their bill. Note the wording here. While Villa have not yet been hit with a winding-up order, it’s worrying to see all of this. Could it be as simple as paying the bill off? Hopefully, but stories have been released multiple times about Xia and Wyness pitching investors for funding. You don’t look for funding if you’ve got money, do you? I do find it somewhat interesting that takeover rumours have spread shortly before we heard this latest news. What’s more, the club haven’t moved to shut down these rumours, at all. Our owner is outspoken at the worst of times, and has seemingly (and quite bloody rightly) kept tight lipped. Nothing they can say is going to make this better, is it? That requires swift and decisive action.
Again, speculation - Villa’s cash is stuck in China, and the club are now stuck in limbo. There was a huge gamble behind the club to chase promotion to secure funding through competition. That has not happened. Dr Tony Xia certainly has his heart in the right place, but so did every other owner of this football club. We can’t make anything of the situation as the story changes by the hour.
On a final note, if you’re reading this, Aston Villa, get the tax bill paid. That’s the ONE thing that you needed to do.