Rangers’ tax case: outcomes and scenarios


My thanks again to the many great contributors to this board. It is said that politics makes for strange bedfellows and it appears that this blog has brought an unusual array of interests together. Information sharing, fact checking, and the inevitable rumour mongering is going into high-gear while as diverse a cast of characters as could be imagined collaborate on piecing together the mysteries surrounding Craig Whyte’s ownership of Rangers FC. If the enemy of my enemy is my friend, someone has managed to make a lot of enemies in a very short time.

In today’s post, I will try to stimulate some discussion on likely end-games to the tax case and what that would mean for Rangers. By definition, this cannot be anything more than informed speculation, so I welcome alternative views and scenarios from all readers.

There are three broad types of outcome from Rangers’ appeal of the assessments from HMRC:

  1. Complete win for Rangers: no payments on the assessments
  2. Complete win for HMRC: Rangers face bills of £36m immediately with £18-24m in penalties to follow
  3. Some midway point where tax is due but Rangers have managed to get the amounts reduced- let us suggest to £18m

For simplicity of analysis we will ignore possibility 3. that there would be some intermediate level bill. It would take a book to go through all of the permutations for this, but until we know more about how the tribunal has gone, we will not know how applicable this might be.

Option 1: Rangers get a complete win

Obviously, this would be great news for everyone attached to Rangers FC. Craig Whyte’s company could sell its shares which it acquired for £1 for a price anywhere between £5 and £10m. Even if the reported £700k in legal and PR costs during the takeover process are true, this would still be a tremendous return. With UK gilts yielding about 2.5% this year, any investment that could provide an APR return of over 1000% would be worth having a small stake flutter. Whyte would have the option of retaining the £18m bank debt on his own books and charging a commercial interest rate. Or it could be sold to another banker for par value (£18m). Rangers would still have to deal with the fundamental problems that lead them to the nadir in the first place: the ‘benefactor’ model for football club ownership is not sustainable. Everyone will eventually tire of pumping cash in without any prospect of a payoff. However, if Rangers were to end up with an owner who at least balances revenue and outgoings, the club would be stable and in a relatively healthy position compared with many others in Scotland and around Europe.

Option 2: HMRC have their bills for underpayment and interest of £36m confirmed, with £12-18m in penalties to follow.
I am going to discount the possibility that Craig Whyte and his partners are really so naive or so stupid that they really believe that there is no risk of this happening. (It is the perception that the new owners are trying to mislead Rangers fans that is at the heart of the growing disquiet among the club’s more sentient supporters.) Whyte’s team will have gone into this venture with their eyes open and will have a strategy for dealing with this outcome. Whether it is a smart strategy will remain to be seen, but I believe that they will have one. We can look at a few of these possible approaches to dealing with such a monumental problem:

a) Fathomless Wealth:

If Whyte and his backers are men of fathomless wealth who are willing to pay any price for the personal honour of being custodians of their beloved club, then simply paying the bills would be an option. Nothing in the available public records indicates that Whyte would have even a fraction of the wealth required to do this. If the rumours of James Mortimer’s involvement are true, does he have that kind of wealth? He will have accumulated a considerable fortune over a career at the top of the nightlife business in the West of Scotland that has spanned about 25 years. However, does he have the kind of wealth that would allow you to spend about £80m before you have even bought a single player? Are there other mystery backers? We do not know, but it seems unlikely that any group would be willing to have this amount of cash tied up to just retain control of their beloved football club. Certainly, it would not be a business decision to bail Rangers out of trouble as such an amount could never be recovered.

b) Liquidation:

As we have presented on here several times, by being assigned Rangers’ debt to the Bank of Scotland/Lloyds, Whyte’s group will have retained Lloyds’ security interest (floating charge) in Rangers’ assets. If HMRC decide to be difficult, Whyte’s only way to enforce these rights would be via liquidation of Rangers FC. Could a group of lifelong Rangers fans really do this to their club? If forced to liquidate, a receiver would sell Rangers assets to the highest bidder and pay Whyte & partners off with the proceeds. Whyte & partners would likely recover all of their £18m debt from Rangers.

c) Make A Deal:

It is known that the previous Rangers’ board made two offers to HMRC to settle the tax case. These were rejected. If Rangers are hit with bills totalling £54-60m, and no one is fronting the cash to pay them, insolvency becomes inevitable. Yet, given its unsecured creditor status, HMRC is unlikely to receive much, if anything, from the liquidation of Rangers FC. From a narrow financial perspective, HMRC should accept a settlement offer of almost anything. Whyte & partners cannot (rationally) offer much as they would find their investment marooned by having over-invested in a business that would never be able to produce a sensible return on invested capital. Balancing this impetus to settle is HMRC’s need to ‘save face’.

HMRC has in recent years faced considerable public criticism for perceived weakness in the face of large corporations disputing massive tax bills. In particular, Dave Hartnett, the Permanent Secretary for Tax, has faced public ridicule and media innuendo over claims that he “caved in” on the £6 billion tax dispute with Vodaphone and agreed a sweetheart deal for investment banking giant, Goldman Sachs. Famously labelled “Whitehall’s most wined and dined mandarin” by The Daily Telegraph last year, Hartnett was also in the firing line over the PAYE fiasco that saw many millions of tax payers face claw-backs from HMRC. These public disasters have captured a greater public mindshare than the larger number of enforcement successes.

In the face of early hints of tax troubles ahead for Rangers, the conventional wisdom amongst radio talking-heads and the man in the street was that “they will just do a deal for pennies on the pound. They always do in the end.” The widespread perception that “taxes are for little people” and previous public disasters may limit HMRC’s room for manoeuvre. In a time of fiscal difficulty for the country, anything that provides an encouragement to businessmen to engage in (yet to be declared illegal) tax avoidance schemes or conscious tax fraud in the belief that they can agree to pay a smaller amount in a decade’s time will not be good for revenue collection. Certainly within Scotland, HMRC’s credibility could be said to depend upon how the Rangers case is handled.

Assuming that Rangers’ lose their appeal of the tax assessments in their possession, Rangers’ future appears to be in the hands of Whitehall mandarins. The continuity of the football club incorporated in 1873 would depend on whether HMRC looks at the low probability of receiving much from Rangers or agrees to accept whatever crumbs Whyte and his friends decide to throw its way. If HMRC feel that a deal could damage the public sense that it is best to pay to taxes, in-full and on-time, the public display of the metaphorical corpse of The Rangers Football Club plc could follow swiftly thereafter.

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.

242 Responses to Rangers’ tax case: outcomes and scenarios

  1. Adam says:

    Both the studies suggest that the HMRC offered payment terms that the debtor wasnt happy with or couldnt meet. The debtor then paid the specialists to renegotiate those terms and get better payment terms that did suit them.

  2. timtim says:

    Why did Whyte spend money carrying out the same due diligence that his partner had conducted less than 6 months previously. ?

    did he ?

    or did he just claim he did ,if Ellis already had the info and is a partner of Whyte
    it would seem logical that the info was given freely
    the only due dilligence required would be for the time after Ellis’ investigation
    If Whyte has quoted a large legal bill then he is probably at another scam
    as would the lawyers who are charging twice for the same work
    anyone know if the legal team doing the dd was the same for Whyte as Ellis ?

  3. Lord Wobbly says:

    That’s what I get for trying to skim over it whilst making lunch. Multi-tasking failure.

    I’m not convinced Rangers would have appropriate ‘circumstances’ that would lead HMRC to make such an offer though.

  4. Adam says:

    Again mate, I dont think i have ever said they will. The question simply posed was whether or not the HMRC would consider £50m over 20 years or something rather than get £0.

    I think everyone accepts that if HMRC press the button, the likelihood is ZILCHO for them.

    There has been a suggestion they are using this case as a precedent to get to others, however if RTC is correct about Rangers and how they have worked this scheme, then I dont think HMRC winning it will start the dominoes falling elsewhere.

  5. I think the whole “another 48 hours” stuff was just Whyte’s team demonstrating that they understand the power of a deadline to a motivated seller. So Whyte’s due diligence would have built on the data collected by Ellis, but the timeline will have been driven more by the importance of the “the other side of teh table” feeling the heat of being left with Rangers and a large tax bill.

  6. Barry says:

    Adam , agreed but if you look through them all the lowest monthly payment agreed was 1.2% of the overall debt which if the same was agreed with Rangers would result in a yearly payment of £7.2m
    Not taking interest into account and if the tax bill was £50m this would take 7 years to clear
    Where in that scenario is the benefit for Rangers or CW

  7. tomtom says:

    If the Ellis 25% is paper talk what is his purpose? Remember he set Wavetower up. I don’t want to keep harping on about him but I think Ellis is the key to the mystery.

  8. pj says:

    rtc i take it you have put your money where your mouth is in terms of backing celtic to win the title? -10 points or not in existance is a good bet eh?

  9. If this is for me, I don’t recall ever saying that they do not offer payment terms. My previous statement on this is that asking for a pennies on the pound discount and time to pay is likely to be a problem. My main question (asked a couple of times) is “why would Whyte accept terms that would make it a certainty that his group will lose a lot of money owning Rangers?”

    £2m per year at a commercial rate of interest would leave Rangers paying virtually forever. (The first year’s interest would be close to £2m alone- very little would go towards the principle). As I say above, as a Celtic fan such a solution is my dream come true. My club (and Scottish football in general) gets the benefits of the rivalry while Rangers have to compete with a millstone around its neck. Some might say say that this is the only fair solution.

    I agree that HMRC would probably accept such an offer, but there is a resistance within the organisation to being treated like a bank. They often ask “why are we financing a tax bill that should have been paid in full?” However, where there is evidence of real hardship and an inability to finance the deal privately, they have been known to provide time to pay. If I recall correctly, the recent Portsmouth bankruptcy included a provision to repay HMRC is a few block installments.

    I haven’t read your link yet (but I will). As mentioned up the thread, I expect that Whyte’s team is trying to negaotiate right now. However, Whyte’s team will be unlikely to be interested in time and would be asking for a massive reduction. To twist your logic a little, they will say: “Do you want £4m or nothing?”

    My point was that faced with this choice, HMRC might feel that enhancing their reputation as fraud busters generates more revenue than accepting a huge discount.

  10. Boab says:

    It wasn’t for you, it was a reply to Adan who is convinced that HMRC offer terms to people who have underpaid their tax. He posted links to two wedbites, which aongst a plethora of “cases” mention one or two where they claim HMRC offered terms.

    My position is exactly the opposite. HMRC do not offer terms, other than people just paying the tax. If however the taxpayer offers terms which ae reasonable then they may accept them. However that is on acase by case basis.

    Sorry for any confusion. Not about the position, I know that, about who I was replying to.

  11. The Vodaphone example shows that it you do your negotiations with someone high enough up in the organisation, you can make any deal structure that you want. So anything is possible if you are involved in a high profile case. However, I wonder if the publicity from previous decisions will influence the range of options open to Rangers.

    There is also the issue that the name “Craig Whyte” is not exactly unknown to HMRC. Will a deal fronted by him get treated as “turning over a new leaf”?

  12. Boab says:

    I believe the whole 48 hours stuff was contrived nonsense. It meant the fans would be so relieved when it happenened they wouldn’t ask many questions as any deal was agood deal.

    I mean they bought the club for £1, what was their previous offer which was unacceptable to MIH / Lloyds.

  13. Boab says:

    The Vodaphone case was for £6bn and involved a very large business.

    This is a two bob Scottish football team, and a relatively small amount of tax.

  14. KevMc says:

    Boab says:

    04/06/2011 at 2:33 pm

    I believe the whole 48 hours stuff was contrived nonsense. It meant the fans would be so relieved when it happenened they wouldn’t ask many questions as any deal was agood deal.

    I mean they bought the club for £1, what was their previous offer which was unacceptable to MIH / Lloyds.

    Good point, very good point. Insider trading going on? The people get shafted! The rich get richer! Nothing new under the sun.

  15. Jonathan says:

    In a event of the worst case scenario, could Rangers do a ACF Fiorentina and get their name back after a set amount of time? Does British law prohibit it?

  16. Paulsatim says:

    shurely you mean “‘ra peepul”?

  17. Area51 says:

    dimtim wrote:

    Why did Whyte spend money carrying out the same due diligence that his partner had conducted less than 6 months previously. ?

    Well tim, dont you think it possible that things may have changed in 6 months ?

  18. Boab says:

    I don’t think it would really matter that much to be honest.

    The business is currently The Rangers Football Club PLC and they play as Rangers.

    They could call a new business something like Rangers FC Ltd (So long as that does not already exist) and still play as Rangers.

    I don’t think there would be anything to stop them doing that, someone can correct me if that’s wrong. Though to be fair whatever they are called the fans would probably just call them Rangers anyway.

  19. Boab says:

    That was to Jonathan obviously.

  20. Brendan says:

    Quote

    Adam says:
    04/06/2011 at 10:45 am

    So he will make a loss of £8m in 3/6/9 months. Cheers. I thought i was missing something

    Reply

    Which makes the next transfer window interesting..

  21. Adam says:

    So to be 100% crystal clear Boab.

    HMRC raise a bill for £30,000 for me and I owe them that amount. I write a letter and say, “Look I cant afford to pay that as it will cripple my business and put me under”

    Are you saying that under no circumstances whatsoever that HMRC would turn round and say, “Could you pay it up over 3 years to us, with a down payment of £5,000?”

    Is that what you are claiming ?

  22. Brendan says:

    A “debt free” rangers would surely be attractive to Parks/Mortimer/King and Murray. They could establish the new born side on a far more respectable and dignified financial footing than the last ten years of nonsense.The money would be found somehow, but as Adam has alluded, a vengeful and united cartel would play hardball with the figures.

  23. Gwared says:

    Boab & Adam, you are easily two of the best contributers on this forum, however you have been getting over agitated today especially you Boab. Now Kiss n make up. Consider yourselves telt.

  24. Lord Wobbly says:

    HMRC might Adam, but following your figures/timeframe (I realise it was just an example) based on a minimum amount due of £36m, that would be £6m down and about a million a month. What kind of deal were you thinking of? (You never know, CW and HMRC might be reading this).

  25. Adam says:

    Wasnt thinking of any deal Wobbly.

    Just puting it out there as a possibility, or a debating point to be honest.

  26. Boab says:

    What will happen when you contact HMRC

    You will need to explain why:

    you are unable to pay in full and on time
    what you have done to try and raise the money to pay your debt
    how much you can pay immediately
    how long you think you will need to pay the rest

    If this discussion reveals that you are able to pay immediately in full you must do so. The HMRC adviser you speak to will be able take a payment over the phone, either by Direct Debit or debit/credit card, or they can advise you how to make a Bacs payment.

    If you are unable to pay immediately HMRC will want to ask you a number of questions to judge your ability to pay off your debt whilst paying ongoing liabilities. HMRC will ask questions about your income and expenditure, your assets and the changes you are making so that you can return to making payments on time.

    If you have previously been given time to pay you will be asked more in-depth questions.

    In more complex cases HMRC may ask for documentary evidence to consider your request for time to pay.

    If HMRC allows you extra time to pay

    HMRC will only agree time to pay where they believe you are genuinely unable to pay in full.

    When allowing extra time to pay HMRC will help people to schedule their debt payments so that they can pay what is owed and return to making future payments in full and on time.

    As part of this process you are expected to investigate and seek other sources of finance and/or take action to restructure your business and/or personal affairs to enable you to meet your statutory tax obligations.

    When HMRC do agree time to pay they will encourage you to set up a Direct Debit payment plan over the phone to help you make sure that you don’t miss any payments.

    HMRC is responsible for making sure that money is available to fund the UK’s public services and expects people to pay their tax in full and on time.

  27. Adam says:

    No agitation here mate. lol

    As for kissing a Celtic fan, no chan…………………..

  28. Adam says:

    Sorry, my wife just clouted me there reminding me of her allegiances. lol

  29. Boab says:

    Posted above by mistake

    Here is the procedure, according to HMRC.

    What will happen when you contact HMRC

    You will need to explain why:

    you are unable to pay in full and on time
    what you have done to try and raise the money to pay your debt
    how much you can pay immediately
    how long you think you will need to pay the rest

    If this discussion reveals that you are able to pay immediately in full you must do so. The HMRC adviser you speak to will be able take a payment over the phone, either by Direct Debit or debit/credit card, or they can advise you how to make a Bacs payment.

    If you are unable to pay immediately HMRC will want to ask you a number of questions to judge your ability to pay off your debt whilst paying ongoing liabilities. HMRC will ask questions about your income and expenditure, your assets and the changes you are making so that you can return to making payments on time.

    If you have previously been given time to pay you will be asked more in-depth questions.

    In more complex cases HMRC may ask for documentary evidence to consider your request for time to pay.

    If HMRC allows you extra time to pay

    HMRC will only agree time to pay where they believe you are genuinely unable to pay in full.

    When allowing extra time to pay HMRC will help people to schedule their debt payments so that they can pay what is owed and return to making future payments in full and on time.

    As part of this process you are expected to investigate and seek other sources of finance and/or take action to restructure your business and/or personal affairs to enable you to meet your statutory tax obligations.

    When HMRC do agree time to pay they will encourage you to set up a Direct Debit payment plan over the phone to help you make sure that you don’t miss any payments.

    HMRC is responsible for making sure that money is available to fund the UK’s public services and expects people to pay their tax in full and on time.

  30. Lord Wobbly says:

    The thing about this site is that two guys from opposing sides CAN engage in a forthright discussion without it descending into the gutter. I agree it can get very slightly tetchy (and I also agree that you certainly read that in the occasional Boab post) but, for the most part, it’s a good clean fight.

    “Ding ding….. round 14”

  31. Boab says:

    I’m not even remotely agitated.

    Adam doesn’t believe me when I say HMRC don’t offer time to pay arrangements. It is the taxpayer / underpayer who puts their proposals to HMRC, who will then look at the circumstances and decide whether to accept them or not.

    It’s no big deal, I’m just bored going over the same ground.

    If Adam thinks I am wrong fair do’s. There’s not a lot more I can say about it.

  32. Brendan says:

    Regarding the next transfer window ( which I admit fascinates me more and more) .If Rangers Fc sell big name players will they then be able to reduce the debt to Wavetower/Rangers and leave Whyte still sitting pretty knowing that the reduced debt to the holding company is still safe and his position strenghtened regarding a future liquidation sale price or am I barking up a wrong tree ?

  33. paul smith says:

    Adam, Boab is spot on. HMRC *may* allow time, but they do not have to. Once a tax assessment is legally payable, it is due at once, and they can enforce payment in the courts, or non-payment by bankrupting an individual or closing down a company

    I dont think any repayment schedule is realistic unless it is a) for a lot of money b) over a very short time period

    HMRC are under pressure to close the so-called ‘tax gap’, the difference between what the Treasury thinks the tax yield should be given the overall state of the economy, and what actually comes in. In these circumstances, a long repayment period is a non-starter

    I will post more on my opinion on what this might mean for Rangers tomorrow, but right now I am off to the pub.

    But, finally, to continue my tradition of disagreeing – well, querying – Boab’s posts, in the Sempra case HMRC raised assessments for PAYE plus NIC,and for corporation tax. Sempra appealed and the court ruled that the former was not payable given the way the EBTs were set up and administered, but the latter was. So it is possible that as part of HMRC’s case with these assessments on Rangers, they are trying to overturn Sempra as well as attack the way the Rangers scheme was run. It doesn’t seem to be the case from what RTC has posted. This is relevant in my view to how HMRC might approach the case if they win

  34. andycol says:

    The timing of when CW pulls the plug will be interesting in itself. If Rangers have still to qualify for the CL then the situation will be less complicated. As I read the UEFA regs the other teaams in the qulaifying process all step up one place. If they have already qualified the the team they knocked out in the play off round would take their place. If the comp has reached the group stage then the brown stuff will hit the fan and questions will be asked of the SFA, as the licensor, on how this stage was reached without the relevant questions being asked. The implications of this are extremely serious for Scotland as UEFA are likely to take a dim view of their premier tournament being disrupted in this way and could well result in sanctions regarding future participation of teams from this country taking part in any competions in the future. Suspension for a period is not unthinkable. I include aa couple of extracts from the UEFA regs to illustrate the point.

    I hope the rest of Scottish football are keeping an eye on these possibilitites and ensuring the SFA sticks to its remit of acting in the best interests of the whole of Scottish football. The financial implications of Whytes actions have a direct significance beyond the interests of Rangers FC and the other clubs will need to be aware of this. Of course none of this will matter if liquidation does not occur.

    Article 52 – Duty to notify subsequent events
    1 Following the licensing decision by the decision-making body, the licensee must
    promptly notify the licensor in writing about any subsequent events of major
    economic importance that may cast significant doubt upon the licensee’s ability
    to continue as a going concern until at least the end of the season for which the
    licence has been granted.
    2 The information prepared by management must include a description of the
    nature of the event or condition and an estimate of its financial effect, or a
    statement (with supporting reason s) that such an estimate cannot be made.

    F – Assessment of the future financial information
    1 In respect of the future financial information the licensor must assess whether or
    not an indicator as defined in Article 50 has been breached. If any indicator has
    56
    been breached, the licensor must assess the future financial information more
    extensively, as defined in par. 2 below.
    2 The assessment procedures, which may be carried out by an auditor, must
    include, as a minimum, the following:
    a) check whether the future financial information is arithmetically accurate;
    b) through discussion with management and review of the future financial
    information, determination of whether the future financial information has
    been prepared using the disclosed assumptions and risks;
    c) check that the opening balances contained within the future financial
    information are consistent with the balance sheet shown in the immediately
    preceding audited annual financial statements or reviewed interim financial
    statements (if such interim statements have been submitted); and
    d) check that the future financial information has been formally approved by the
    executive body of the licence applicant
    The licensor must assess the club’s ability to continue as a going concern until at least
    the end of the season to be licensed (i.e. the licence must be refused if,based on the
    financial information that the licensor has assessed, in the licensor’s judgement, the
    licence applicant may not be able to continue as a going concern until at least the end
    of the season to be licensed.

  35. Mark says:

    i think the “front loaded transfer budget” will be soent tying up waht quality they have or they will try to then say not our fault they didn’t want to stay then follow up with some bosmans and maybe one half decent signing if they are lucky, mayhbe a quality James Beattie signing? or a pander to the masses David Healy esque signing?

  36. Adam says:

    Haud the bus a second Paul. Nowhere have i said that HMRC “HAVE TO” allow time. I am fully aware they can enforce payment(well attempt to) through the court if thats what they chose to do.

    All im saying, is that it is a remote possibility, that given a certain set of circumstance, HMRC could offer(yes thats right, they do the offer) a potential scenario whereby the money is paid over a period of time.

  37. jimbo milligan says:

    Apparently a mg05 has been raised at companies house in relation to rangers today. Partial discharge of a floating charge from the bank of scotland from 1999.

    All very confusingly described but the bank are retaining secuirity on the season tickets – And as someone on kerrydale street asked earlier – why are they doing this if the debt has been cleared??

  38. Brendan says:

    No doubt true but is Wavetowers position advanced by selling the family silver ? I realise that most transfer deals are not cash up front so is it possible to tie the terms to the new rangers ie Wavetower or does this cause Tevez like registration issues /

  39. Paul says:

    From KDS, user 7upfree
    :
    “I see that a form MG05s has been lodged with Companies House today in relation to Rangers. This form is generally used as a means of discharging a floating charge. In this case it is a discharge in respect of Bank of Scotland’s floating charge from 1999. The important thing to note that it is only a partial discharge of that security. The description of what has been discharged is also highly confusing as it would appear that everything save for season book income has been discharged (up to 2014 – 2015). In other words, BoS have retained this security (somewhere in the region of 25k tickests at say £400 each). But why if the debt has been paid in full?”

    Can anyone confirm and tell us what this might mean?

  40. Boab says:

    Which part of this do you disagree with Adam. It says to me that it is up to the taxpayer to tell HMRC what they can pay immediately, and what additional time they will need.

    It’s not from a company trying to get business. It’s from HMRC’s interweb

    ———————————————————————————————————————————-

    What will happen when you contact HMRC

    You will need to explain why:

    you are unable to pay in full and on time
    what you have done to try and raise the money to pay your debt
    how much you can pay immediately
    how long you think you will need to pay the rest

  41. Diffo says:

    I have been following this excellent website since inception and cannot thank RTC enough for helping bring this to the fore and trying to explain in lay mans terms the details as known by him and guessed by others.
    Assuming I have got the gist of this correct; CW buys the debt from lloyds for £18m (for arguments sake). Rangers lose the tax case and HMRC play hardball and force rangers into liquidation.
    As CW is the preferred creditor, providing rangers or rangers assets are sold for more than £18m, then CW makes a profit on his investment. As the people backing CW are presumably charging interest on the sum (debt could still be with lloyds but now assigned to CW/Wavetower) or will be looking for a return on their investment, it actually makes sense for rangers to lose the tax tribunal (in CW’s eyes anyway) and get it over with quickly to avoid the accumulation of further interest charges. If £18m cannot be realised by the sales of rangers assets, I assume, CW gets to keeps the lot as he is the preferred creditor.
    If in fact I have summarised correctly and if CW is not a diehard rangers fan, I frankly cannot see any other outcome working in his favour.

  42. Paulsatim says:

    Which club, in their right minds, will allow {edit: RFC] an instalment plan knowing what is happening?

  43. KevMc says:

    Brendan says:

    04/06/2011 at 6:26 pm

    No doubt true but is Wavetowers position advanced by selling the family silver ? I realise that most transfer deals are not cash up front so is it possible to tie the terms to the new rangers ie Wavetower or does this cause Tevez like registration issues /

    Wavetower no longer exists. It’s gone. It’s disappeared into the ether. It has transmogrified into “The Rangers FC Group Limited”. It get’s even more absurd that TRFCGLtd owns RFCPLC. HMRC are going to get shafted by RFCPLC, who will cease to exist when HMRC present the bill, because TRFCGLtd will point the finger at RFCPLC as being the culprits for the tax dodging that has been going on. Don’t be surprised if there is an amalgamation announced on Monday. The amalgamation of RFCPLC and TRFCGLtd to create yet another company called “………………………..” fill in the blanks.

  44. Adam says:

    Hypothetical situation:

    What will happen when you contact HMRC

    You will need to explain why:

    you are unable to pay in full and on time – “£50 million is a lot of money and im afraid we just dont have that amount of cash lying around mr taxman”

    what you have done to try and raise the money to pay your debt – “Our hands are tied. We cant sell all our players or our stadium as then we will have no other revenue which means you will still get nothing mr taxman”

    how much you can pay immediately “We have £1.2 million in the bank, will that do Mr Taxman”

    how long you think you will need to pay the rest ” Well weve just got rid of a £2.5 million Capital and Interest payment so i suppose we could pay you that each year and meet our other obligations”

    Mr Taxman “Ok, well hows about you find £5m as an upfront payment then pay us £3m per year over 15 years then”

    Forgetting the numbers(amounts and years) i have plugged in as im sure you will just ridicule them(and they are there as hypothetical), but do you not believe the above is possible. I would bet it is.

  45. Lord Wobbly says:

    The Tyrell Corporation?

  46. tonybananas says:

    paul smith “It seems to me unlikely they would try to establish case law when they have a settlement offer out there.”

    A high-profile dead body hanging from a gallows would serve to encourage others to take advantage of the amnesty or “settlement offer” as you put it, and start afresh.

    Otherwise, what incentive does this “settlement offer” carry? Why would others agree to hold their hands up when the perception is that HMRC haven’t got the balls to follow through on their words?

    It actually it makes perfect sense.

    This is linked to the ongoing debate between Boab and Adam over time-to-pay, where I pretty much agree with Boab that an offer of £2-3m a year is a non-starter as it also sends out a message of weakness and does little to convince others the risk of draconian penalty is high enough to outweight the rewards of continuing avoidance.

    Just picking on one part of what was a good post by the way.

  47. Lord Wobbly says:

    Hypothetically, yes. But in reality, it would take a mammoth lump sum up front and/or the rest over a long time. I know you asked not to pick on your numbers Adam, but lets say £50m = £12.5m up front and £62.5k per month for 5 years. That’s not including interest so you can say £1m a month. It seems unlikely to me.

  48. sligobhoy says:

    Please explain the significance of the MGO5s form lodged with Companies House.From discussions elsewhere,it would appear that HBOS still have security over season ticket revenue until 2014/15?
    What is going on?

  49. Boab says:

    Why are you being obtuse Adam.

    The scenario you just painted had the taxpayer making an offer to HMRC.

    I have said on numerous occasions now, HMRC will not offer terms, that is up to the taxpayer. However if the taxpayer offers terms then HMRC may accept them, they may not, depending on the circumstances.

    I have never said, or even suggested, that Rangers would not be allowed time to pay. Just that they will have to make the offer. HMRC’s default position is that if the tax is due then it should just be paid. Even if the taxpayer has to borrow it elsewhere to make the payment.

    Like I said earlier, if you don’t believe that fair do’s.

  50. Boab says:

    As RTC pointed out an offer of £2m per year would be ridiculous from a Rangers point of view.

    They would pay £2m, and during the same year incur interest of about £2m. So they would be no better off. Same the next year and the next and the next.

    Any offer which does not reduce the capital sum is just money being thrown down the drain from a rangers point of view.

    So, meaningfully it has to be at least something like £5m (even that only reduces the sum by about say £3m in reality).

    Rangers cannot afford to pay £5m per year to HMRC. Not without CL money ever year.

    Even if they could it would take well over 10 years to pay off a £50m debt. How many Rangers fans would want their club to start every financial year at -£5m. It makes no sense whatsoever.

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