Rangers have nothing to worry about

Rangers’ previous board, and its new owner, made much of the expert legal opinion they have received assuring them that they would win their appeal against the £24m underpayment, £12m interest, and £18m penalty assessments from HMRC.  For almost a year, Alastair Johnston deflected and denied, but beginning on 1 April of this year, he began to signal that things were less certain for Rangers.  Once Craig Whyte had secured funding for his takeover (from sources unknown), Johnston and other directors began to sound the alarm about the consequences of Rangers’ new owner being unable to pay these bills.  Craig Whyte’s retort, and only comment on the tax case, was to dismiss the possibility of losing the case based upon the legal advice received.

In a previous blog post, we discussed the source of Rangers’ original legal advice on Employee Benefit Trusts (EBTs), Paul Baxendale-Walker.  We showed that Mr. Baxendale-Walker is a colourful character who runs one of Britain’s largest pornography production firms.  More relevant is the fact that Baxendale-Walker has been struck off by The Law Society of England and Wales: he lost his ability to practice law related to malpractice involving a company that used one of Baxendale-Walker’s EBTs to loot its own pension fund.  (Baxendale-Walker gave a character reference to a bank for a “person” who did not in fact exist).

Mr. Baxendale-Walker is an ebullient chap and not someone to take such a professional insult lying down.  When you have one of the greatest legal minds in history, it would surely be a waste of your genius to allow lesser mortals to deprive the world of your brilliance.  So Baxendale-Walker launched his counter offensive.  He took The Law Society, Deloitte & Touche (the accounting firm), and several individuals who were involved in the case against him to court.  The outcome can be found here: http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/QB/2011/998.html&query=Taylor&method=boolean

The link above provides more details than most would care to read, but the short version is that his claims were dismissed as being without foundation.  For those with an hour to spare, the link is worth a read.  It is like a plot from a bad spy novel.  The number of judges who seem to find that Baxendale-Walker’s statements lack credibility is quite remarkable.  In the face of rules that prevent lawyers from paying commissions to those to find clients for his EBT schemes, Paul Baxendale-Walker appears to have just formed a company that was held in trust, but acting on his behalf, to get around the restrictions.  The courts looked through this device and saw it for what it was: a sham.  Most bizarrely, Baxendale-Walker took to pretexting.  He pretended to be an HMRC investigator in emails and phone conversations with those who were ‘persecuting’ him to try to get them to make damaging admissions.  (According to the court papers, pretending to be a representative of HMRC is possibly a crime in itself).  A sound recording expert witness gave testimony that at least one of the conversations taped by Baxendale-Walker had been deliberately altered.  However, the important bit is the outcome.  Eight of the nine defendants sought to get a dismissal.  On reviewing the evidence in the case, The Honourable Mr Justice Supperstone found in their favour and dismissed the case against them on a number of grounds, but principally “The claims against each of these Defendants should be struck out on the basis that they have no real prospect of success”.

Rangers have never specified who is giving them this advice; that there is no risk of having to pay anything on the tax assessments.  While Baxendale-Walker’s co-author on a book on EBTs, Rangers’ own counsel in the current tribunal process, Andrew Thornhill QC is also known to be gregarious character never afflicted with self-doubt, Baxendale-Walker admitted last year (in an interview with Phil MacGiolla Bhain) that he had recently completed some work for Rangers.  (I hope that this was general consulting work and that he was not giving legal advice, as he is not authorised to do so).  It is just an educated guess, but I suspect that Baxendale-Walker will prove to be the “expert legal opinion” on which Rangers are using as the tissue behind which they can hide their admissions of the risks the club really faces.

Anyone taking the time to read the court papers in the Baxendale-Walker case will gain a detailed insight into precarious legal status of EBTs, the findings against those who have been blatantly misusing them, and the value to place on expressions of confidence from Paul Baxendale-Walker on a favourable outcome.

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.

301 Responses to Rangers have nothing to worry about

  1. MarkM says:

    the difference is i type the way yoda talks but without the wisdom

  2. Tam S says:

    Do you not think we’re confused enough without this being thrown in!!! 

  3. Fittaeprint says:


    Excellent blog, compelling stuff! I’m not surprised at the lack of Scottish pressaction in relation to either the takeover or the background of the new owner/board. For years myself and many other fans have seen an institutional bias in the media, this bias is best described as reporting anything to do with SDM as positive, (the numerous stories over the years about ‘…a major investment is iminent..’ which usually appeared around early Jan, whereas the bunnet was treated like a pariah who was only in it for what he could get.

    I am baffled, however, by the belief that the tax case worst scenario of £50M+ will pose any difficulties to DW, given the vast sums SDM borrowed over the years, he’ll simply reclaim the mis-sold PPI, bingo!
    Keep up the good work, THE TRUTH IS OUT THERE

  4. Mark says:

    comment on tax would I give hmmmm?!

  5. ChrisMcC says:

    Well, I laughed, Mark. :o)

    RTC and Don Dionisio both mentioned ‘geekery’ but Star Wars references surely takes it to a whole new level?

    Having said that, Yoda isn’t the first Star Wars character mentioned here. Was there not something about the guy who wrote about ‘succulent lamb’ earlier …

  6. majoc says:

    ANDY COLL 1141

    That is the very man,probably or even possibly or not.

    I believe he was lampooned and satirised mercilessly by a St Mirren supporting novelist.

    Entertaining read,and perhaps prescient in a number of ways!

    Not that I’ve read it,so I cannot pass comment………

  7. Goosy says:

    Re HMRC response to liquidation
    Surely HMRC can prevent liquidation being the largest creditor by far ?
    Hence the most likely scenario is how much p.a and for how many yrs will ?RFC be allowed to pay off their debt ?

  8. Henry Clarson says:

    In other words, after years of expensive and tedious investigation they should send out a signal that if you set up an unlawful tax avoidance scheme and dodge paying tax for years and years and years, the Taxman will give you even more time to get around to eventually stumping up some of the back payments?
    I think that might be a less than likely possibility

  9. Adam says:

    RTC – Any chance you could send me a contact e-mail address and would you consider sticking a blog up for debate on the facts and figures of Peter Lawwells reign(looking at a direct comparison to Rangers figures profit/effective debt/pay/trophies) if i am able to write something up. Please delete this once you have read and fully understand if you dont want to given what this blog is about, but there might be an appetite for it.

    Its your ball and cool either way buddy.

  10. Adam says:

    Forget the above RTC. Can you delete when you get on as ive just opened up my email. ;-)


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