Analysis of the Bain Papers

After 17 months of ignoring the abundant evidence that much was wrong at Rangers FC, the mainstream media appear to have been roused from their slumbers by this weekend’s revelations within the Bain Papers.  Reaction has varied from claims of surprise to defiant finger-pointing.  (According to one especially corpulent hack, Rangers’ problems are all just a product of meddlesome bloggers.  He has to say that, doesn’t he?  With over 25 years of obsequious subservience on the lap of Sir David Murray, he cannot now turn on him.  Rangers problems are a direct function of the failure of journalists at Scotland’s leading publications to do their jobs).

The reaction to the Bain Papers is finally proportionate to their significance.  Without fear of exaggeration, this is the most important story in the history of Scottish football.  It is good that the media has finally been shocked into saying something.

Journalistic  investigation of the scandals within Rangers over the last decade has amounted to nothing more than telephoning Rangers’ PR firm for a comment.  Obviously, it will  take them some time to catch up.  In their analysis of the Bain Papers, these neophytes have made several errors in analysis and I thought that it would be a good idea to help clarify a few of the most important points.

  • Securitization of Ticket Sales
    The media reported that the Bain Papers made reference to Rangers having started the process of selling off four year’s worth of future season ticket sales in return for cash now. What these reports have missed is that Bain’s information on Rangers stopped being accurate as of 23 May 2011. The Bain Papers are themselves just snapshots in time and do not necessarily reflect the current state of affairs. As regular readers of this blog will already be aware, Rangers FC did indeed file paperwork related to the mortgaging of four years of season ticket revenues. However, this filing (an MG05s) was botched and actually released all of Rangers’ assets except the season tickets! The MG05s was later withdrawn and, to date, has not been replaced. This means that either the transaction was not completed or the finance company has given a loan without any security. Lending to Rangers without security is very unlikely, so in the absence of any more recent evidence, I believe that this securitization of season ticket revenues has not taken place. (Rangers might have found it easier to keep up with its bills if it had).
  • Assignment of Rangers’ Debt
    Given the number of new readers to this blog, it is worth repeating my questions over the terms of Whyte’s purchase of Rangers’ debt. Had Whyte paid Lloyds in-full for the debt, there would be no doubt that Whyte would have also received £18 million of priority protection (and the probable right to appoint a receiver for his own benefit). However, I have received credible information that questions whether most (or any) of the debt has been paid for. If Whyte has only signed a promissory note and not actually fulfilled his end of the transaction, the benefits of the security interest would remain with Lloyds. Whyte would have no say in events should Rangers become insolvent under these conditions. Until Whyte or Lloyds make an unequivocal statement on who holds the floating-charge on Rangers’ assets, we will not know for certain who will determine Rangers’ future.
  • Amount of Tax Bills
    The amount of the tax bills reported to be in the Bain Papers is slightly in error. The £14 million interest and penalties is actually just penalty. Interest is included with the £35 million assessments. A trivial point, but worth recording in the interest of accuracy.

Perhaps the most significant comment that can be made is over the timeline for a Rangers insolvency event. Despite all of the fevered speculation, all I can say is that I do not know if or when this will happen. Football clubs are odd businesses. They start their financial years in the summer with large cash-piles from season ticket sales and will see their funds gradually deplete until they start selling tickets for the following season in March or April of the following year. In between, the club must ensure that it is able to pay wages and other bills from the cash-pile, matchday receipts (food, a small number of ticket sales, etc.) and TV money. In Rangers first season in three years without significant European cash, there was always going to be a question on whether the club could remain solvent through to spring. The “wee tax case” has taken an additional £2.8m that would be badly needed. Without a line of credit at a bank to tide Rangers over, the risks are real and significant.

However, the reports of unpaid suppliers do not automatically mean that a crisis is days away. This could be part of the bureaucratic malaise that has fallen over the club since the takeover or it could be part of a stringent cash management plan to see the club through to the next transfer window in January. The key point being that there is no information to support a projection on how immediate a cash crisis is at Rangers. Rangers might have a problem tomorrow or next week, but my money is on the club surviving until a result is obtained in the First Tier Tribunal for the ‘big tax case’.

Assuming that Rangers lose the ‘big tax case’, Whyte will have the option to file for insolvency or he can appeal to the Upper Tribunal to buy more time. HMRC for its part would have the legal right to demand payment as soon as they they get a positive result in the First Tier Tribunal. By custom, HMRC do not generally enforce payment while an appeal is active if it would cause insolvency. However, if they feel that a delay in enforcing payment is just creating an opportunity for the alienation of assets, they might be more inclined towards flexing their legal muscles. Given these caveats and conditions, it is possible that Rangers could delay the hangman’s noose until this time next year.

In summary, I am delighted that this case has broken open. While Rangers’ supporters might not be in any mood to thank anyone for helping shed light on this situation, it is good for their club (if not its current and previous owners) that this information is in the public domain. It is especially good for our national game as a whole that we discuss the problems of the last decade openly. Rangers supporters need to ask themselves why they have meekly stood by while the future of their club has been imperiled and whether their “friends” in the media have done them an injustice by becoming complicit in the cover-up of this story.

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.

2,405 Responses to Analysis of the Bain Papers

  1. TheBlackKnight says:

    Do you mean ‘prescribed’?

  2. jockybhoy says:

    I agree with Lord Wobbly – if we’re all of he same opinion then this site loses some (tax) appeal…. let the accountant have his say. Too be pored over and disssected as this board is meant to do.

    I assume he was talking about the successive Rangers boards and not this message one when he stated “it appears board members are still struggling to understand the difference (between perfectly legal (sic) avoidance and criminal evasion)”.

    I don;t think there is such a thing as “perfectly legal tax avoidance” – you can mitigate your tax, you can minimise your tax responsibilities, but you can’t “avoid” tax….

    Thanks for the post re The Eye Captain Bob – that was what i read that implies to me the HMRC have a very strong case,

    BTW Captain Bob – thanks also for the memories – when i previous Cpt Bob went overboard he was suing the publication I worked for at the time. My editor came through with 2 bottles of champagne when the news of his demise broke…”you can’t libel a dead man” :o))))

    Any news on Rangers’ pension fund ;o)

  3. Not The Huddle Malcontent says:

    Guiness John

    you credit the accountant with more insight than they are worth

  4. TheBlackKnight says:

    I haven’t seen anything (or anything subscribed) that would relate to COP9.

  5. Lord Wobbly says:

    theaccountant says:
    29/09/2011 at 9:19 pm
    I am not in the least surprised that an expert such as yourself,
    whose vocabulary appears to consist of one word drivel, is
    unaware that it is a criminal offence to withhold payment of NI
    contributions within the subscribed time-scale.
    I bid you a good evening and suggest you hone up on your
    Was that directed at me? If so, you’re right. Why use superfluous words when one will suffice? I’ll try, once again, to answer your earlier question.


  6. Guinnessjohn says:

    Barney says:
    29/09/2011 at 9:22 pm
    BBCAlLamont Alasdair Lamont
    #Rangers and Martin Bain won’t be back in court tomorrow as planned as agreement was reached re documents requested by Bain’s lawyer

    Disclosure of those documents would have been mandatory . All they`ve done is save some appearance fees and costs .
    Was it the IBC documents Bain was after ?
    Remember , he knows where the bodies are buried .

  7. TheBlackKnight says:

    RFC have released some of the documentation, not all.

    They may still ‘prove’ that the missing documents are required (relevant) when going to proof.

  8. spanglebhoy says:

    This is getting interesting, This blog will provide details on Rangers FC’s appeals against tax bills which the club has received for underpayment of tax going back to 2001. The case centers around what HMRC believes is the illegal use of Employee Benefit Trusts (EBTs) to avoid paying PAYE and National Insurance Contributions on payments made to players and members of the board of directors. written by RTC. Are you The Accountant saying rangers are accused of criminal acts regarding Insurance contributions, and that they have invited the tax man to prove it ?

  9. easyJambo says:

    Further tweet from Al Lamont suggests Bain didn’t get all that he wanted.

    BBCAlLamontAlasdair Lamont
    #Rangers have agreed to hand over a certain amount of what was being requested, though not all

  10. gunnerb says:

    TheBlackKnight says:
    29/09/2011 at 9:39 pm

    RFC have released some of the documentation, not all.

    They may still ‘prove’ that the missing documents are required (relevant) when going to proof.

    Still it seems RFC are now in receipt of some competent legal advice, no airing of stained linen on Friday and can still argue the case later.

  11. TheBlackKnight says:

    Accountant = drivel

  12. TheBlackKnight says:


    Perhaps, but it is straightforward procedure. In the inventory of productions MB could refer to letters or documents in his possession.
    If any of those documents are cross referenced with other documents or letters (that are currently unavailable) it is a simple request to his Lordship (I don’t mean you Wobbly 😉 ) to ‘persuade’ RFCs team to produce them if relevant.

  13. Guinnessjohn says:

    The deliberations of the IBC are clearly crucial to the Bain case . He knows what should be put before the court . From RFC perspective and CW in particular , these minutes are potentially catastrophic .

  14. TheBlackKnight says:

    Exactly (subject to their content being relevant, which I am persuaded it is)

  15. Lord Wobbly says:

    TheBlackKnight says:
    29/09/2011 at 9:55 pm
    If any of those documents are cross referenced with other
    documents or letters (that are currently unavailable) it is a simple request to his Lordship (I don’t mean you Wobbly)
    Are you sure? I mean, Lord knows…

  16. TheBlackKnight says:

    LW 😉

    Maybe, yes, no!

  17. Lord Wobbly says:

    TheBlackKnight says:
    29/09/2011 at 10:02 pm
    Maybe, yes, no!
    In the words or Robert Robinson, “Would that it were”

    Alas, no.

  18. Lord Wobbly says:

    oops…. ‘of’ Robert Robinson…

  19. gunnerb says:

    TheBlackKnight says:
    29/09/2011 at 9:55 pm

    If any of those documents are cross referenced with other documents or letters (that are currently unavailable) it is a simple request to his Lordship (I don’t mean you Wobbly 😉 ) to ‘persuade’ RFCs team to produce them if relevant.
    Quite so but judged by the recent history of RFC and legal procedure this is something of a success….any idea how long they can now delay ….post FTT verdict maybe?

  20. TheBlackKnight says:

    “BLUFF” 😉

  21. TheBlackKnight says:

    gunnerb says:
    29/09/2011 at 10:10 pm

    “….any idea how long they can now delay ….post FTT verdict maybe?”

    Absolutely. MB knew this, hence the ringfencing of monies.

    RFC will no doubt (deliberately) drag this out. The waters will be muddied, costs will be increased.

  22. Lord Wobbly says:

    TheBlackKnight says:
    29/09/2011 at 10:10 pm
    Yes, but who’s?

  23. TheBlackKnight says:

    “TRUE” 😉

  24. TheBlackKnight says:

    Really don’t know why that first link didn’t work.

    Sausage fingers or luddite!

  25. Auldheid says:

    There is no comparison between one season of EBT use, particulary when it was quickly dropped and proper payments made to all parties and systemic use of them over 7 or 8 years.
    I have no idea of the points differential in 2005 between us and the teams mentioned but I doubt Juhino contributed anything to make the gap significantly different.

    I have to say that when there is quite a bit of evidence that Rangers have been underhand that Celtic supporters choose to dismiss it if it means changing their mind about how they see Celtic.

    In a normal family is the family member not usually given the benefit of the doubt by their own family?

  26. Lord Wobbly says:

    TheBlackKnight says:
    29/09/2011 at 10:34 pm
    Really don’t know why that first link didn’t work.
    Sausage fingers or luddite!
    Dunno, but with me it’s always that second bottle of St Emilion. I’ve often said that one is not enough but two is too many!

  27. Lord Wobbly says:

    Can someone remind me? Is MB v RFC scheduled for later in the afternoon tomoz?

  28. TheBlackKnight says:

    LW, agreed! LOL

  29. Paulsatim says:

    Lord Wobbly says:
    29/09/2011 at 11:06 pm

    Postponed due CW agreeing to give MB some of the papers he wanted, according to some journo’s tweet

  30. TheBlackKnight says:

    Lord Wobbly says:
    29/09/2011 at 11:06 pm
    Can someone remind me? Is MB v RFC scheduled for later in the afternoon tomoz?

    It was scheduled (still is) but according to Alasdair Lamont’ tweet, it will not follow on.

  31. Lord Wobbly says:

    Cheers Paulsatim/TBK. Interesting. The cynic inside me suspects a stalling tactic.

  32. droid says:

    I would ask some posters to be mindful of the potential fishing exercise being pursued by the accountant, it appears as though someone is attempting to identify the source of a leak.

  33. MidlothianCelt says:

    Apologies for taking this off subject but if you have access to showering facilities you may care to delve into the cesspit that is a Rangers Media thread about favourite sectarian songs etc of the past. Unsurprisingly, the posts are disgusting – revelling in violence and murder against Catholics, as well as the usual references to taigs, tarriers and fenians.

    With rare praiseworthy exceptions (who must despair at their neanderthal peers) the posters are a slobbering bunch of bigoted, hate-filled, pitiful sociopaths who mourn the “passing” of their revolting sectarian drivel.

    I’m sorry for decent Rangers fans who get tarred with the same sectarian brush as these lowlifes but it is because of scum (apologies RTC for the intemperate language) like these that I really, really, want their club to go down the stank. Craig Whyte – do your worst!


    P.S. Remember to scrub hard in the shower.

  34. TheBlackKnight says:

    MC, there are laws covering thus sort of thing.

    Like any other ste with such content, the authorities would be interested to know of these goings on.

  35. TheBlackKnight says:

    I would ask some posters to be mindful of the potential pishing exercise being pursued by most on here having read the accountants posts. I’m off for a leak! 😉

  36. MidlothianCelt says:

    TheBlackKnight says:

    30/09/2011 at 12:08 am

    MC, there are laws covering thus sort of thing.

    Like any other ste with such content, the authorities would be interested to know of these goings on.

    Indeed TBK – someone very well known to me has just completed and submitted a hate crime incident form to Strathclyde Police. Let’s hope suitable action is taken against the website and/or posters.



  37. Johnobhoyo says:

    Auldheid – when the head of the family has abused the other members of the family, taken them for granted and generally treated them like shoite then they deserve no more benefits of any doubts.

    As usual with you it’s one rule for Celtic another rule for others.

    Like an alcoholic, until you admit that you have a problem you will never get better. As long as Celtic blame their ills on everything and everyone from the dalai lama to gordon smith we’ll be in a mess. Especially when the enemy within sits up in that Director’s box every fortnight lording it over the plebs who pay their wages.

    Three years ago it was the defeat to kaunus that led the Board to their even more drastic downsizing. Looked what happened.

    Two years ago it was the admission from RFC that Lloyds were running the club and that times of austerity were upon them. Again the Board used that as an excuse. Look what happened.

    For the past year or so it’s been the EBT case that has provided the Board with the smokescreen for the continued demise of a club that not too long ago was beating the likes of Barca, Man U and Milan. Look what happened.

    What excuse will Lawwell and co use next year when the EBT case is finally settled I wonder?

  38. Duggie73 says:

    Like it or not Whyte’s Telegraph interview was a PR success for him.
    The first appearance in print of the idea of closing down RFC to avoid the tax bill was controlled by Whyte- he alluded to it in a broadsheet in a cryptic enough manner that the majority of fans are in no way clear what he meant.
    Had a mainstream journalist published the idea first in unequivocable terms, that would have forced CW to unequivocably confirm or deny it. Or damningly remain silent on the issue.
    As it is, some of the momentum has perhaps gone from the story.
    Disappointing. must try harder.

  39. Lord Wobbly says:

    droid says:
    29/09/2011 at 11:40 pm
    I would ask some posters to be mindful of the potential fishing
    exercise being pursued by the accountant, it appears as though
    someone is attempting to identify the source of a leak.
    Leak? It’s a veritable torrent!

  40. Duggie73 says:

    In the weird and wonderful world of theory…
    if HMRC are wishing in the main to indicate a hardline will be taken against businesses which avoid taxes, why not win the FTT and waive the debt meaning CW cannot trigger insolvency within 90 days and loses c£18mil or above?

  41. ger1888 says:

    would it be true to say re the accountant and his fishing trip, that he has done more hooking than a Nantucket fisherman? and by that i mean has he bent over and received one right up his Dover sole from his paymasters in the Whyte camp ??

  42. Auldheid says:


    The Board are guilty of incest?

    Whatever next?

  43. sam says:

    Laugh I couldn’t stop, don’t know about fishing, but the Accountant appears to have ploughed a few leeks and other vegetables under, it certainly brought out the always cheated never defeated since 1888 brigade. 😆

  44. jockybhoy says:

    It’s funny to me that it was a rangers website i believe that coined that “always cheated never defeated” phrase and “they” have been trying to make it stck ever since. I have never heard a Celt say it! The only ones cheating Sammi are Rangers on their tax bills!

    Johnobhoyo – I’d prefer our situation of being a viable functioning football club where as a plc the books are open for all – even our opposition – rather than a piggy bank for one or two rich men to do with as they see fit. We’ve lost a few titles because of chopping & changing managers, now the uber-loyal (to Rangers if not Scotland) Sir Walter – a very good manager there is no doubt – has again been ditched and has tottered off on his shetland pony, we’ll see if Super Sally can fill his brogues.

    I would hardly go the route of domestic disputes given one of the key discussions on this site is whether your own former chief exec is the one with the silver bullet that will finally end the horror story down Govan way.

  45. sam says:

    Isn’t certainty wonderful, as long as it goes your way, you have a less than normally O’Ffended day now, take a day off, it is Friday after all. Cheated again last night were we ?

  46. jockybhoy says:

    Not cheated nor defeated as you well know. (Honest) mistakes happen in sport. Young bhoys played well enough and heads held high despite the disappointment I’d say.

    But what a change eh? 3 up front against the joint leaders of Serie A? Now THAT’S football…

  47. sam says:

    I see, or rather I don’t Neil called it disgraceful as opposed to honest, being 7 points clear now that’s football. 😉

  48. TheBlackKnight says:

    Whilst ploughing some vegetables on my day off I uncovered a COP9 😉
    the accountant would be surprised at the CIF

  49. sam says:

    wouldn’t you have to understand Code of Practice 9 before you can comment on it, try accountingweb, my father is a well respected contributor on that board, he may be able to help you.

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