Chelsea and Aston Villa are both set to face penalties from UEFA after breaching financial regulations, according to recent reports. The two Premier League clubs will receive fines for what are considered first-time violations of UEFA's financial rules.

Chelsea reportedly exceeded the permitted limits on financial losses for the previous season. A key point of contention arose when UEFA refused to recognize income the London club declared from selling their women's team to sister company Blueco 22 Midco Limited—a transaction that reportedly generated a world-record £200 million in revenue.

Unlike the Premier League, UEFA's regulations do not permit clubs to declare income from selling assets to sister companies, putting Chelsea in violation of the governing body's financial rules.

Aston Villa are also understood to have breached the financial limits set by UEFA, though specific details of their violation have not been disclosed.

Understanding UEFA's Financial Regulations

Under UEFA's financial regulations, clubs are permitted to lose a maximum of €200 million over a three-year assessment period. However, the rules do allow for certain deductions from this calculation, including expenditures on youth development programs, women's teams, and infrastructure improvements.

These regulations, often referred to as Financial Fair Play (FFP) rules, were implemented to ensure clubs operate within their means and maintain financial sustainability in European football.

The penalties for Chelsea and Aston Villa are expected to be limited to financial sanctions as these are considered first-time breaches. More severe punishments, such as transfer bans or exclusion from European competitions, are typically reserved for repeat offenders or more serious violations.

Neither club has yet issued an official statement regarding the reported breaches or potential penalties. Both teams competed in European competitions last season and will be keen to resolve these financial issues to avoid any impact on their future participation in UEFA tournaments.