Rangers’ Expert Advice

Anyone else notice the subtle difference in Rangers’ statements on Friday compared with earlier efforts to allay fears about the tax case?  The club’s Chairman, Alastair Johnston’s prepared statement said: “We continue to vigorously contest HMRC’s challenge on the taxation treatment of the Trust and in doing so continue to receive reassuring opinion from tax, accounting and legal specialists.”  Compare this to the previous mantra from the club: “On the basis of expert tax advice provided to Rangers, the club is robustly defending the matters raised.”

In any information vacuum, commentators tend to over analyse what information does exists, and I may be guilty of the same thing here.  However, I detect a change in tone; a de-emphasis and lesser reliance on having followed “expert tax advice”.  I think that many people would be interested in this aspect of the story,  so we need to ask the question: “Who gave Rangers their tax advice?”  The answer: Paul Baxendale-Walker.

Mr. Baxendale-Walker is a colourful character to put it mildly.  Under the pseudonym of Paul Chaplin, he hosts a late-night TV show called “The Red Zone”.  He also is the founder and owner of one of Britain’s largest pornography studios, Bluebird Productions Limited.  However, he does have a basis to claim expertise in tax matters and is the author of a number of books on the subject, including one with Rangers’ own lawyer for the current EBT case, Andrew Thornhill QC.

Yet there have been clouds over his career and the restless Mr. Baxendale-Walker was arrested on 22 November 2000 and charged with conspiracy to commit fraud by the Serious Fraud Office over his role in the Balfron Group Ltd case.  While one of the owners of Balfron Group was eventually convicted and jailed for raiding the company’s pension fund, Mr. Baxendale-Walker fought his charges and eventually won a stay of prosecution.  However, the Law Society alleged that Baxendale-Walker had “given a false reference to a bank, which indicated that the person to whom he referred was a person of good standing when he had no basis for saying so”.  He was suspended by the Law Society on 4 May, 2005 for three years for “serious professional misconduct”.  However, a call to the Law Society to check on his current status revealed that he was ‘struck off’ on the 29 September 2006.  This amounts to losing his “license” to practice law.  He also became embroiled in a lawsuit with  the accounting firm Deloitte claiming that one its employees, Aidan Langley, was telling potential clients that “Baxendale-Walker would advise clients to mislead HMRC“.  Deloitte confirmed that the case did not go to trial, but would not elaborate on the nature of any settlement with Baxendale-Walker.  While he personally cannot practice law in England and Wales, he is the owner of a law firm bearing his name that has qualified lawyers who can provide advice and execute his strategies.

It is with this background, we turn to his involvement with Rangers FC.  A journalist contacted me through this blog this week to provide details of an interview he conducted with Mr. Baxendale-Walker in October last year.  In the interview, he admitted that Rangers FC were a client and that he had  finished another assignment with Rangers just a few weeks earlier.  His discussions with Rangers started back in 1998, but the trusts did not get implemented until 2000.  The timing coincides with Sir David Murray’s now legendary bombast during the Succulent Lamb interview with James Traynor which included statements like: “Bring on the next 10 years, there’s more to come for Rangers.”  That Celtic had just stopped ‘ten in a row’ and had been taken off the financial life-support system under the leadership of Fergus McCann around the time that the discussions about  ‘increased tax efficiency’ started cannot be ignored.  That its actual implementation coincides with Martin O’Neil’s revitalisation of Celtic and the 6-2 victory over Rangers in August of 2000 also seems noteworthy.

While Baxendale-Walker defended the advice given to Rangers and expressed confidence in a Rangers victory, when challenged on the suitability of EBTs for distributing payments for contractual obligations, he admitted that: “the Rangers case is the test case“.  That the man whose law firm developed Rangers’ EBT strategies is conceding that the club will be the guinea pigs for their own implementation of EBTs should be a cause for concern.

The journalist told me that he had a sense that Baxendale-Walker had delivered a ‘canned-product’ to Rangers and had not been deeply involved in the mechanics of its implementation.  He felt that it was unlikely that Baxendale-Walker or any of the staff at his law firm would have been tracking which requests for loans from the EBT were for contractual obligations and which were not.  So, it is quite possible that Baxendale-Walker gave perfectly good advice.  The questions are over what Rangers did with it.

Aside from the doubts which their own tax advisor’s comments raise about Rangers’ use of the EBTs, one wonders about the quality of leadership at Rangers.  Was this really the only lawyer from whom competent tax advice could be obtained?  Back to the subtle change in wording in Rangers’ statements in their defence: do they betray a desire to lessen the focus on the original tax advice received?  The reality is that Rangers took a legal tax strategy that was suitable for a narrow set of circumstances and forced it into a hole into which it was not designed to fit.

About rangerstaxcase
I have information on Rangers' tax case, and I will use this blog to provide the details of what Rangers FC have done, why it was illegal, and what the implications are for one of the largest football clubs in Britain.

37 Responses to Rangers’ Expert Advice

  1. John says:

    Murray International might have purchased the product (EBT) from a firm called FSL. It should be noted that it transpired that FSL was in fact owned by non other by a Mr Paul Baxendale-Walker. A lawyer was struck of by the Law Society in England for his involvement in the FSL. Check out the lengthy findings of the Law Society Tribunal on the FSL / PBW case.

    So the facts are that the lawyer to this case was in fact the architect of the product and is central and the key individual in what now is the mess that Rangers find themselves in.

    He has been challenged by a number of clients on the failure of his trusts to deliver what was promised.

  2. I edited a couple of words in your post to keep everything kosher. I need to ask you all to exercise some common-sense. When speculating, you need to say so. It will keep the quality of discussion at its current high standard.

    Thanks for the info. I did not know about FSL. Here is a link for anyone interested:

    The key point is that Rangers’ leaped in with both feet into a tax strategy that was at the very best controversial. Thankfully, Celtic had Brian Quinn around during these years. As a globally respected banker, Quinn would not sacrifice his own reputation or gamble Celtic’s future, for the sake of a temporary advantage. Quinn will not be remembered by many fans in a few years, but I think that he set a direction and a standard of integrity for the club that ensured we dodged several bullets.

  3. Auldheid says:

    I believe we had one EBT with Johinuo (sp) from Middlesborough that has since been settled but the benefits of the prudence of Quinn and DD in 2004 is begining to show, even if it did cost us trophies and CL money latterly. We at least have been able to sustain that loss and remain viable.

  4. Torquemada says:

    This just gets better and better. Or worse and worse, depending on whether you want the planet rid of this vile totem for religious extremism and right-wing hatreds. When the name Paul Baxendale-Walker first entered my consciousness, I said to a colleague: ”Wouldn’t it be great if this was the guy who set up the Rangers tax dodge scheme that Phil Mac Giolla Bhain is on about?” I cannot believe that you have confirmed it. Woohoo!

    We will see what we will see, but it’s beginning to look particularly grim for Rangers. No wonder Alistair Johnston became frazzled even under the gentle lobs that pass for questioning by the radio wing of the Winalot fraternity.

    There is one light on the horizon for the suffering hordes, however: Tom English says it’s going to be okay, there, there. Oh my aching sides!

  5. neil c says:

    The question i would like answered is…what is in this for Whyte..? a purchase price of 30M, a tax case that could cost 50M+ , a stadium in dis-repair, a squad in much need of rebuilding and a squad where the main players are looking at england to further their careers and boost their wage packets. Is their a land deal involved in this, millionaires/billionaires do not like giving away their money for no reason….surely it cannot just be love of the club or simply EGO…? He could be a 100M out of pocket within 18 months.

    fantastic blog…keep up the fantastic work.

  6. me 2 says:

    Well ipox is worth a couple of hundred mil ….. Oh wait ..

  7. me 2 says:

    The daily ranger has the huns legal team monitoring a similar case that may set precident in their favour moonbeams i say

  8. Eeramacaroonbar says:

    neil c

    I am asking the exact same questions as yourself. It doesn’t make any sense. Fergus McCann came in at just the right time and he was shrewd enough to know there was BIG money just around the corner. It is the exact opposite with this “proposed” takeover. As quite a few people have touched on, there is no money to be made in the forseeable future. I agree with your 100 million approx figure, and as you say that it just to steady the ship and deal with the tax liabilities.

    The only reasons I can come up with are the same as yourself……ego. Look at Boyle at Motherwell, I mean that was guaranteed money down the drain. Some of these millionaires have money burning a hole in their pocket. The fact that he supposedley specialises in turning ailing firms around also maybe points to ” a challenge” he sees in all of this.

    Can anyone confirm he has the money though ????? The press have come out with so much garbage that it is hard to believe a single word they say, although surely at this stage Rangers have done some checks ?????

  9. JohnnyPaton says:

    There’s a book in this! But seriously can you make any comment regarding the (over)valuation of Ibrox and Murray Park, contrasted against the much lower (realistic!) valuation of Celtic’s same assets. What is this hiding or is it a tool to fend off instant administration?

  10. cadizzy says:


    “The journalist …..felt that it was unlikely that Baxendale-Walker or any of the staff at his law firm would have been tracking which requests for loans from the EBT were for contractual obligations and which were not.”

    What the journalist is saying here does not make any sense. Any loan from the trust (and it would be a family benefits trust rather than an employee benefits trust) would be a matter for the trustees and the beneficiaries only (the player and his family members). The law firm or the tax advisers behind the planning would have no involvement in the loans whatsoever.

    Also, any loan is a stand alone issue; it cannot be said to be for contractual or non contractual obligations. The contractual or otherwise issue only relates to the actual contributions into the EBT by Rangers with the debate being about whether or not the player already had a right to the amount being contributed to the EBT at the time it was contributed.

  11. I think that the journalist was under the impression that PBW’s firm also set up the trust(s) and administered them. If that is not the case, then you are right, it would not make sense. However, I think that it is clear that in this aspect, he was not sure and was speculating to try to pull some of the threads of the story together.
    What seemed clear to him was that PBW did not seem aware of the specific details of how Rangers had been using the EBT.

  12. Brattbakkk says:

    From KDS http://twitpic.com/4gteja

  13. ramsay smith says:

    Mr Baxendale-Walker strikes me as being the El-Hadji Diouf of tax advisers.

    Does anyone have a link to a list of titles from his film production company? I suspect there’s a seam of comedy gold to be mined there.

  14. Paulsatim says:

    well they are “blue”, so I suppose that’s fitting!

  15. Alan says:

    How is this for a bit of wild speculation. Nobody knows the wealth of Whyte or where his money is coming from. What if he has some secret backers? What if his backer is none other than David Murray himself!!!
    David Murray needs to get Rangers off MIH books. If the EBT case goes against them and they are landed with an £80 million tax bill, not only will it pull Rangers down but it might also pull MIH down with it.
    If he was to fund a secrative thousandaire like Whyte with the £20 million (£25m minus the £5m he was getting back from Whyte) then he gets Rangers off the books and saves MIH.
    Just a fanciful thought

  16. I have thought about this too.

    It would require a complex web of transactions to disguise the fact that money wasn’t changing hands. The problem is Lloyds. Effectively controlling MIH, they will not partake in any sham transaction.

  17. mcguireonfire says:

    “Thousandaire” love it!

  18. ramsay smith says:

    I just wonder whether a change of ownership of The Rangurz would affect how HMRC exercise their discretion when deciding how much of a penalty to impose if/when they win the case.

    Could the new owner say ‘Well yes, the previous owner was a bit iffy, and gave you the run around, but I’m Whyte by name and white by nature, so go easy’ ?

  19. JohnBhoy says:

    Douglas Alexander in The Times says Whyte is worth £700million, so I don’t see there’s anything for Rangers to worry about.
    Unless Douglas Alexander is havering . . .

  20. Mick says:

    April the 1st was a few days ago Johnbhoy, surely they’ve stopped using the £700m figure now! lol

    Rangers on verge of billionaire buyout – reports | Football | STV …
    18 Nov 2010 … He owns Liberty Capital Ltd – value unknown, Tixway UK Ltd which is … Video: Ahead of their acclaimed movie’s release tomorrow, STV talked …
    sport.stv.tv/…/209849-rangers-on-verge-of-billionaire-buyout/ – Cached

    On trhe above link from STV in November, it highlights Whyte’s assets as Liberty and Tixway, Tixway are the company that have been taken to court for the 90 grand and looks like companies house are ready to wrap them up.


    G2 2BX
    ( Active – Proposal to Strike off )

    Which brings me to Liberty, very interesting post below and wasn’t aware about the inter-dealings of his companies and beginning to sound like one of Muray’s own pyramid schemes, can’t be much mileage left in the fakeover though and with season ticket sales due shortly, the end game must be near whatever that will mean.


    Surely people must be aware that Craig Whyte(not Chris!) is the person who in effect controls all aspects of MHG;but from scotmanukuks and other posts clearly are not.

    Whyte is the founder of Liberty Capital Ltd which for business is based at Whytes Bath St Office in Glasgow & MHGs London Office and is assumed to be its main ultimate beneficial owner;but as Liberty is incorporated in British Virgin Islands this information is not publically available.

    Liberty presently controls 29.7% of MHG shares and more importantly is its financial guarantor,without which guarantee support MHG could not present “going concern” accounts and remain in business and listed.As you will be aware MHGs liabilities exceed its assets by a substantial margin and is to date making heavy losses which it cannot finance from existing resources.
    Liberty is the main sponsor of MHGs numerous share issues buying MHGs shares,most recently @ 0.05p & usually at a discount to market price and reselling in the market generally at a significant profit.
    Tixway UK Ltd is a subsiduary of Liberty.Tixway preference shares £500k worth were bought by MHG in exchange for a convertible loan and are used to support Merchant Capitals requirement from Irish Financial services for capital solvency requirements.I cannot comment on Tixways recent finances as Companies House lists the company as overdue in submitting accounts and notes an application to strike out the company has been made.Tixway is also being sued for £90,000 for an unpaid bill from a company controlled by Albion Rovers Manager Paul Martin.It denies liability.
    Three companies directed by Whyte LM Logistics,Syntex Logistics & Countryliner Group are financed by Merchant Turnround Fund from bonds sold by Merchant to the public.
    Whyte is a Director of Pritchard Stockbrokers to which Merchant have supplied a bond to enable it to meet FSA solvency requirements and with whom they have a business relationship.

    Whyte has been discribed as a “billionaire” in press reports but nobody has yet identified a substantive business connected with him that might accord him this status.So I cannot comment.

    However in some reports BVI company Liberty Capital has been confused with the giant property company Liberty International REIT which was recently taken over.There is no connection whatsoever.

    A takeover of Rangers by Whyte,who is a box holder and supporter is unlikely.Although there may be talk I expect this commodity will be in greater supply than cash!

  21. gorillainaroom says:

    Don’t make me angry, you won’t like me when I’m angry.


  22. manila says:

    I have nothing to add to the financial forensics but i would like to add to the appreciation for what is a very clear, informative and entertaining read. I stumbled here through the backdoor by way of a mention on that exemplar of rational and liberal discourse that is followfollow. I’ve since looked for further references on there of rangerstaxcase but to no avail. But I’d expect any bearer of harsh reality would be shouted down. The rest would likely just stick their fingers in their ears and la-la-lah in a perfect reflection of The Rangers board while Sir Moon of Beam delivered yet another fiduciary white rabbit out of the bowler hat. More fool them.

    I’m looking forward to you outling the endgame scenarios should this all go the way we hope – but I’d be very disappointed if you gave them too much of a clue on how best to extricate themselves from the shambles. I enjoy that you are regularly addressing different aspects and I always have bottle of Schadenfreude on ice in anticipation.

    small point re Brattbakkk says: … that image may be found on KDS – but it ekcherly originates from TSW. There’s a very good reason I know this. *winks*

    associated imagery …


  23. On the idea that this blog might actually guide them through their problems, I very much doubt that.
    We will go into detail later, but I am of the view that the die is cast for them now- at least in terms of winning or losing the tax case and the administration filing which would follow a loss. After that, it becomes a pinball game (or if some prefer, “a big bagatelle” ;-)). Outlining the options will not help them. It will all depend on a combination of who wants to own them, how much they will pay, and whether the creditors can agree upon a formula to divide that amount up. A lot of conditional probability going into this formula.

  24. cadizzy says:

    bizarrely, Mr Baxendale Walker is also a TV host called Paul Chaplin. The programme is called “Redzone” and is shown on Edge TV which I have never noticed on any of my far too frequent channel-hopping occasions. His guests have included Neil and Christine Hamilton, Garry Bushell and a woman who used to be on ‘Allo ‘Allo. (So, I’m gutted to have missed it).

    He manages to describe himself as having a natural eloquence as well as a self deprecating style. He also says he owns several lawyers’ offices in the UK, while the law firm’s website says two.

  25. Sorry, but I going to have to moderate every post on this subject.

    Paul Baxendale-Walker might be the devil incarnate or the resurected Christ, but this is not the board to debate which. If you have material specific to the Rangers case, let me know, but I think the post above contains enough background to set the stage for Rangers’ selection of a tax advisor.

    I don’t have time to fact check every post and every claim being made. I don’t doubt the sincerity of the posters, but I just cannot allow material which could be actionable which I cannot defend in court if necessary.

  26. John says:

    Moderator. I will quite happily retarct my eralier statements. I would not wish to post anything that may cuase offence or may result in action against your good self. The readesr of these posting can read the LAw Society findings against Mr Baxendale which provide the details of the indvidual and the erasoning behind the decsion of the Law Society in England to strike him off.

    As I said my sincere aplogies to you as you are doing a tremendous job of providing the facts of the case.

    Please delete any posting that I have made if you feel it may cause you problems.


  27. Sir Dirty Money says:

    This blog is bustin’ ma succulent-lamb-chops!

  28. Sir Dirty Money says:

    This blog is bustin’ my succulent-lamb-chops!

  29. eventlogger says:

    Inept management of the EBT can be the only explanation for RFC being nailed for evasion by Hector. If RFC is found to have evaded tax (in order to attract players with wages that were considerably higher than what the players would take home via the PAYE mechanism) then that is tantamount to gaining an unfair sporting advantage IMO. I hereby declare all trophies won by RFC since they adopted the EBT evasion scheme to be null and void :-) THat must make it 10+ in a row for us at the moment….

    As for the guy who wants to buy RFC, if he wants to do the deal this week he has to swallow what HMRC has estimated they are owed by RFC. Hector must be very confident he will prevail or he would have cut a deal by now…RFC’s potential saviour has to answer one question only: is RFC worth 100million GBP, one seventh of his rumoured wealth, or one tenth of what Phillip Green successfully “borrowed” from his (obviously) very well managed EBT a few years ago.

  30. Gary says:

    :The “journo” was none other than Mad Phil McGillivan who is nothing but a bitter Rangers hater. He gave himself away by posting the Paul Baxendale Walker story himself. This blog started off as smart and sensible now its descended into some form of KDS/CM. Ah well was fun while it lasted.


Get every new post delivered to your Inbox.

Join 23,474 other followers

%d bloggers like this: