Rangers Knew About Other Tax Bill


On 1 April, Rangers’ Chairman, Alastair Johnston, presented his club’s Interim Results for the six month period ending 31 December 2011.  A bit of a fuss followed his revelation that Rangers had taken a charge of £2.8m for a tax bill relating to a Discounted Options Scheme used to compensate players between 1999-2003.  This is a second, and entirely separate,  tax case from the much larger one related to Rangers’ use of Employee Benefits Trusts (EBTs).  This smaller bill has been seized by the creative PR staff spinning the on-going “takeover” saga involving Craig Whyte as a snag holding up a deal to sell the club.  However, it was Johnston’s claims that this bill “came out of left field” that struck me as strange.  So I did some digging.

If Johnston is claiming that no one at Rangers FC knew about this bill, he is either ignorant of the facts or is deliberately misleading his shareholders.  It is possible that Johnston and other board members did not know about this bill, but my research reveals that staff at Rangers FC have been aware of this issue for at least two years.  Contrary to speculation, this issue was not discovered during Craig Whyte’s (or anyone else’s) due diligence.  Back-office staff at Rangers have been corresponding with HMRC on the matter for all of this time, and cannot claim that this was any kind of surprise.  After many months of discussion and correspondence, HMRC finally sent an assessment in recent weeks.

If Alastair Johnston’s claims of executive surprise are true, it is indicative of an organizational and leadership vacuum at the club.  Certainly, Martin Bain, as Chief Executive charged with day-to-day management of the business, should have been fully aware of this issue.  If a “shoot-the-messenger” culture exists that lead accounting staff at Rangers to hide potentially bad news from the Chief Executive, the club is in worse shape than anyone thought.  A picture seems to be emerging of a dysfunctional organization that rarely misses an opportunity to do the wrong thing.

This would all appear to be a hangover from the reign of Sir David Murray.  It is a familiar issue for companies where an overbearing ego casts a long shadow.  Organizational design, delegation of authority, and a common understanding of business ethics are sacrificed to feed Mammon.  In such companies, strong middle managers do not develop or they are passed-over for more the more compliant.  When the cult of personality fades or is extracted, there is no corporate culture to fall back upon.  Either Rangers has become such a troubled company, or Alastair Johnston is mistaken when he claims that no one knew that this issue was brewing.  If Martin Bain knew but did not inform the board of developing risks, it would reveal the extent to which Rangers have become distracted by internal feuding and ownership issues.

The obvious next question: Are there any more tax issues?
I have been told of a few issues bubbling under. It should not surprise us that more issues exist. Once you ‘cross the Rubicon’ and embark upon what is, at best, a high risk taxation strategy, your door will be open to every snake-oil selling law firm with a plan.  Other schemes in which it has been claimed that Rangers have participated over the last decade include one to award share warrants in cash-rich offshore companies to staff and to make use of  film partnerships.  (Coincidentally, this last scheme was apparently used to compensate a former Rangers manager who bears a startling resemblance to the actor David Caruso).

Whether investigations into these other issues ever result in additional tax assessments remains to be seen.  Nevertheless, it is clear that when a revitalised Celtic started to apply pressure on Rangers in the late 1990s, Sir David Murray directed the club to chart a course which now imperils its very existence.

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 for what was (updated) one of the largest football clubs in Britain.

139 Responses to Rangers Knew About Other Tax Bill

  1. eventlogger says:

    Desperate stuff indeed from Johnston. That appeal to higher powers was dog-whistled almost a year ago. Didn’t stop the first bill landing, nor has it prevented the other much larger assessment being delivered to Edmiston Drive. It might have worked if there were a Scottish Revenue and Customs service that was on their case. But as far as UK authorities are concerned Rangers are just another lot who they believe owe them money. They are not as important outside of Scotland as they think they are.

  2. Ed H says:

    probably some masonic phrase

  3. me 2 says:

    Sfa sfl spl should have bee issuing fines to stamp out the bigoted singing they have shirked their responsibilities weren’t celtic fined heavily for not having shirt numbers at one time uefa showing THEY arra peepil

  4. Boab says:

    Oh for heaven’s sake, let’s not be tempted down this line and become involved in obfuscation. People do this far too often and forget the main issues. Conspiracy theories and the like are so much more interesting, so much more fun.

    It’s part of the masonic rituals, yes. So what. This stuff is hardly a secret, they advertise it themselves.

    Another wee link so long as the blogger has no objection.

    http://www.phoenixmasonry.org/masonicmuseum/statues_of_faith_hope_and_charit.htm

    To go down these routes and become more interested in this type of stuff is to take away from the actual point. They have already had to pay the biggest bit of £2.8m by the Her Majesty’s Revenue & Customs. They are currently at tribunal arguing another tax bill with Her Majesty’s Revenue & Customs. This one is said to be a lot bigger, an awful lot bigger. It’s more likely that their Chairman is, if anything, trying to rally the troops rather than influence any procedure. If he were that would be a very public and very stupid way to go about it.

    So mote it be.

  5. eventlogger says:

    If poring over the accounts of the zombie company that is RFC hasn’t made the gullible spiv walk away thus far, then losing the revenue from three Euro games will be considered as just another wee crease to iron out.

  6. Bobo Slamrage says:

    Great blog and comment debate as always RTC.

    As another poster commented, as did you, no press has ran a story on Craig Whyte and his finances. He is a billionaire, occasionally A (multi)millionaire, A wealthy businessman etc etc

    Is there any chance you could do a blog on it? Maybe some help from the more informed readers could highlight previous dealings, or lack of.

    All the best,

    Bobo

  7. Great post.

    Let me reassure everyone, the HMRC case is not going to be sidetracked by a Masonic cry for help. Referees, the SFA, the SPL- they might try to help a brother in need.

    The British government just wants its money. How this goes after the FTT I am not sure, but HMRC are committed to getting a win.

  8. I guess this will cause a further delay in the completion of Craig Whyte’s due diligence? 🙂

  9. eventlogger says:

    Some may describe Whyte’s continued participation in the meetings as due diligence. I call it kidnapping. Has anyone seen him since the first 48 hour deadline elapsed?

  10. matty6721 says:

    I have a feeling the fakeover will eventually go through however I cant believe that the Rangers fans are so willing to accept this guys shilling, there is litterary nothing out there as to where his money has been made. Could he have made his millions after doing a moonie back in the 90’s? If so surely it would be tracable?
    I also wouldnt worry aout any hidden HMRC agendas when dealing with Rangers, if the can put the Queens jockey in Jail then nobody is safe!!

  11. BigFrank says:

    Boab:

    Do you know the difference between being secured and unsecured in an adminstration process?

  12. Dr T says:

    Hey RTC, have you any thoughts about writing a book about this whole sordid affair after it finally reaches a conclusion? I’m sure the Blog must be close to reaching Biblical proportions! It must be one of the most read pieces on the Internet at the moment. One set of readers will be thinking they are reading Agatha Christie with more than a hint of Monty Python and the other set will be thinking Stephen (with a PH) King.

  13. patrick fox says:

    “Faith, Hope and Charity” is a distinct Catholic moral ethos taught in Catholic shools. I dont where Alastair Johnstone is going with that lol

  14. tomtom says:

    Apparently the Director is Graeme Duffy who currently lives in Florida. Director of various other little outfits none of which appear to trade.

  15. Let’s see how this plays out. If half of the rumours I have heard are true, it could be on a par with “Killing Pablo”.

  16. ramsay smith says:

    Do you know which players were beneficiaries of the EBT?

    Will Rangers have taken indemnities from them regarding any tax which might become liable?

    Would such indemnities be enforceable after this length of time or will they have prescribed?

    Do HMRC have the right to recover tax from players if Rangers can’t pay?

    Are the players witnesses at the tribunal hearing?

  17. gorillainaroom says:

    Ahm still here and I’m still angry….

    But here’s the rub…..

    No-one knows how angry….. Grrrrr!!!!

  18. kells says:

    If you were the puppet fronting this bid and you played to the tune you were told , would hinshelwood be your reward (what is the developement value ?)

  19. Chris says:

    Killing Pablo??? More like Robbing Peter…to pay Lizzie! :o)

  20. Ed H says:

    I think Gazza is up for Bankrutpcy. Might be some blowback from that.

  21. Eeramacaroonbar says:

    Moira Gordon done a live webchat on the Rangers takeover yesterday afternoon in the Scotsman. In reply to why there was a complete lack of any sort of investigative journalism on the the taxcase, Whyte himself and the takeover…………she said it was due to a “LACK OF TIME”. Honest to God you couldn’t make this up. A guy was pressing her on why there was so many things dug up about McCann when he was about to takeover. She said it was because there were a lot more journalists working at that time.

    Imagine being a journalist for a moment and stories like the ones we are discussing on here are breaking and your boss is asking why we have nothing on it. You turn round and tell him – “I don’t have enough time”.

    I am truly speechless. I know most Celtic fans have known it for some time , but truly over the last few years the press/media in Scotland have not even tried to hide their motives. Fair enough it may well be out of economic pressures rather than blatant bias, but whatever it still remains.

    I can’t help but feel if it was Celtic that were in this position they would be like rabid dogs trying to dig the dirt.

  22. Ian Ferguson says:

    I intended logging on for the Gordon webchat, but missed it, Sounds like the same old keech.

    No time to write anything!

    The legendary Monkeys could have rewritten a fair bit of Shakespeare in the length of time the laptop have had to write ONE investigative or critical article BETWEEN them.

    Still the Rangers “fans” deserve all that happens to them.

    Subservient bunch o MUGS with their heads buried in the sand, How much has Minty mugged them for over the Years?

    The good news rolls on…

    Yesterday it was a sectarian charge from UEFA…. That wasn’t their fault either, everybody’s picking on them.

    AW DIDDUMS!

    I’m STILL Lovin it.

  23. Annie M says:

    Exchange ‘lack of time’ for ‘lack of a clue’ and you will be nearer the truth.

    There is no cover up or conspiracy. Journalists just don’t know what’s going on. The idea they would hide it if they did is completely ludicrous and patently nonsense.

    Asking your average sports hack to understand a tax case is like asking a monkey to write a thesis on astro physics.

  24. JJ says:

    I accept the media don’t have a clue BUT a couple of hours on the internet, and a further short period to check the accuracy and veracity of the information, and they would have a BIG story about Whyte.

    I firmly believe there IS a conspiracy and it’s not nonsense to suggest they are hiding, or declining to obtain, the information.

    It’s more to do with their readership and not wanting to be seen to scupper the deal. They would never be forgiven. I understand that is the view of the Commercial Director of, at least, one of the Newspaper Groups in Scotland.

  25. Ian Ferguson says:

    Annie M.

    I DIDN’T HAVE A CLUE.

    But a wee bit of joined up reading, asking a question if there was a point I did’t undestand and look it up to make sure what your being told is true, has worked wonders for me.

    The beauty of this site has been there have been a lot of knowledgable guys willing to share info, cross reference it and even explain if its complicated.

    Add the quality of the blog itself and the story is already written for them, just a bit of Plagiarism required to make the story of the year.

    Instead total silence. Or worse more ” just another 48 hours” assurances for the great unwashed hordes.

  26. Eeramacaroonbar says:

    Exactly right JJ

    The simple fact – whether it is listeners tuning in to their radio stations, watching their tv programmes or buying their newspapers, the media and press in Scotland – pander to their majority. As we all know in the West of Scotland that would be your average working class Rangers fan. Positive Rangers news and negative Celtic stories are the call of the day. Negative Rangers news is a definite no-go area. Whether this is deliberate bias is another arguement. I believe in the past it certainly was , but it has been going on so long that it is maybe “just the way they do things” nowadays and young hacks starting their careers who have no personal agendas are quickly told of how things operate. Instituitional bias at it’s best. The same way it seemed perfectly normal to so many in Scotland for a player to be booked after blessing himself. So many of these journalists and media types profess how the bigotry in Scotland makes them cringe , yet their work (or lack of in this case) often perpetuates the whole mess.

    As I say Instituitional bias is so deep-rooted and ingrained in our soceity that I think in a lot of cases the media are completley oblivious to their compliance in it.

  27. The Mighty Atom says:

    Scottish sports hacks should not be mistaken for investigative journalists.

    They wouldn’t have the faintest idea where to start.

    They loll around in their semi-celebrity, fork and knife in hand and napkin tucked between their fat necks and straining collars awaiting their next feed.

    That’s how they are because that’s what we accept from them.

  28. Ian Ferguson says:

    I know it is drifting off the subject a bit but I was amazed at the following:

    “It is fine when you have a great club, with a great tradition, as Rangers have and people feel that’s a part of it,” Smith said at his media conference on Friday.

    “But I think when there is a reaction, as there has been over the last few years, against those traditions then the people who do sing them – and I would stress that I don’t think it’s the majority of Rangers supporters – need to take into account that in a modern era it’s maybe not acceptable for them to do so.
    .
    There you go, straight from Mr Dignity himself. Rangers have a great “Tradition” of Racism and Bigotry and thats fine by him.
    (
    It shows whats wrong in Scotland could you imagine substituting any other race or creed into the equation instead of Irish Catholic? There would be an outraged cry from all and sundry and he and his “Fine Tradition” would be kicked right into touch.

    Come on Mr TAXMAN, Hurry up and catch up with this motley crew.

  29. Mark Dickson says:

    Well in the absence of any critical media examination of Who is Craig Whyte? What do people here know about him, his past etc. All I can find are a few glib articles of little substance and a young scots in business article the herald posted back in 1996 ….. who is Craig Whyte now though?

  30. Mark Dickson says:

    Yet more hope, more spin and of course still more time required ……………….

    http://news.bbc.co.uk/sport1/hi/football/teams/r/rangers/9388150.stm

  31. Auldheid says:

    Financial Fair Play rules click in next close season and it will be a club’s accounts for the FY in which CW says he will spend more than £5M that will be used to determine if FFP rules have been followed.

    While the extra he promises to spend might keep Rangers within the FFP income threshold (and without CL money as a percentage of football earned income any higher non football contribution might take it over it) the principle behind FFP is that money spent on footballers i.e fees and wages has to have a sustainable relationship to income earned from football. Sugar daddy money falls outside that category.

    I am not saying CW will not be able to contribute, but I would expect any journalist worth his salt to acquaint himself with FFP and look to see if these promises to spend non football money can indeed be homoured, not because the wherewithall might be lacking but because the business reward for breaching the rules (access to CL money) is taken away.

    To sum up: we do not know if he has the money:
    we do not know the source of the money
    we do not know if he has the money if he can actually keep his promises because of FFP.

    How about a bit of due diligence from the media or they waiting for us Tims or Swiss Rambler

    http://swissramble.blogspot.com/

    to check the rules and spoon feed them the answer.

  32. Boab says:

    Loads of people talk about Craig Whyte and who he was. Few mention in any great way that about 10 years ago he was the subject of investigations by both the Inland Revenue and HMRC. Those are the Departments which joined to form Her Majesty’s Revenue & Customs. So he does have experience in dealing with both Departments.

    What little can be found out today suggests a “venture capitalist” but at the end of that particular market which looks at business with ongoing problems, seeking investment to try to get out of those problems. I would liken him to the credit card for people who cannot get one elsewhere, so they have to pay the higher rate of interest for the card which is basically available to anyone.

    Anything I have seen about the man puts him into the “any port in a storm” category. However it is all very nebulous, which is strange for someone for whom such lavish claims are made. It is worthy of note that it is not Mr Whyte himself who makes these claims, but other people. has he ever described himself as anything. Or is it all just elaborate legends made about him.

    I can honestly say that I would not want him anywhere near a business in which I was involved. Or indeed my football club.

  33. Jeepster says:

    I bet the press are all over the stokes rumours

  34. How can anyone be rewarded with something that does not belong to Rangers or anyone involved in this situation?

  35. Weefatbhoy says:

    RTC:- I have been following your blog from the start, It’s excellent m8…………

    For many years now the vast majority of the press in this country have been “One sided”, But over the last few months it has been hard to comprehend how far they are actually prepared to go to cover up certain stories.

    When Fergus McCann entertained the idea of purchasing Celtic FC, Brian Dempsey covered most of the pre-purchase agreements and even then the media in this country had already disclosed his financial background to the penny – BEFORE the man had arrived in the country.

    If my memory serves me right, I think (Open to correction on this) Mr McCann arrived at Glasgow airport at noon and had completed said purchase of Celtic FC by 11pm that night and yet most of the same journalist we have today had asked him (Mr McCann) more question (In eleven hours) than they have asked the Whyte knight in FIVE MONTHS.

    I accept both deals are different in the extreme but the one pertinent question they asked “The Bunnett” back then and MUST ask TWK now – What is your motive for buying this club?………Simples

    Now they (Journalist’s) don’t need to understand the complexity of the fakeover or tax case to ask this simple question, The reply FM gave that night was front page news in EVERY daily newspaper ………..NATIONWIDE

    Go on Mr .T ask Mr .W ***THE*** question……..you never know it may lead to another romantic dinner date………

  36. Boab says:

    I bet they are too, however what that has to do with this blog is a mystery to me.

    I’m not really sure how those rumours relate to Rangers’ tax case, Ranger’s takeover position, or Ranger’s current financial predicament.

  37. Jeepster says:

    it is not in relation to the tax case boab, but are we not allowed a thought onwhere the press will spend more of their time when it could be best served somewhere else

  38. To be fair, the Stokes’ senior story is fair game. It would be naive in the extreme to expect any paper to ignore it given the nature and history of the divide. However, you are correct as well that the idea that such a story would takes its place amongst proportionate and analytical stories that try to uncover the truth about Whyte is just ludicrous. The combination of incompetence and agenda makes the Scottish media very predictable.

  39. Frank Galvin says:

    “Could Rangers go Bust”?

    Rangers also mislead their shareholders and the stock exchange by making the statement that Alastair Johnston did not ‘state’ that Rangers could go bust. Because whilst it is true that Johnston made no such statement, his act of nodding in agreement in front of seven journalists (who all corroborated Johnston’s reaction), clearly showed a concern that was subsequently ‘watered down’ to shareholders and potential buyers later on that day.

    They can’t both be right.

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