Rangers’ Negotiations With HMRC: The Truth Is In There


For several months, it must have been difficult for Craig Whyte’s spin doctor to catch his breath.  It seemed as if Whyte, through Rangers or one of his other highly profitable businesses, was in court daily for failing to pay debts to some supplier or an ex-employee, and was having large sums of cash arrested.  The hits kept coming: the BBC broadcast a documentary alleging that Craig Whyte acted as a director while disqualified. The BBC show also made claims that Mr. Whyte was involved in lots of financial fast foot-work.  One scheme seemed to involve pocketing cash that was supposed to be destined for the tax man.  Such were the frequency and magnitude of the accusations against Mr. Whyte that a strange thing happened- it got boring! “Craig Whyte in court over debt” had, by last week, become the least interesting headline you could imagine.  Even the most upstanding Rangers fan developed a tolerance for news that would have shocked had Sir David Murray been in the same position.

When bad news is coming thick and fast, the best PR men would advise to just take cover until the shelling stops.  This week has seen Whyte’s men emerge from their bunker to start the counter-offensive.  A rumour of a negotiated solution to the Big Tax Case emerged on the Follow Follow fanzine website (from a low post count little-known participant).  Darrell King then “confirmed” the story on Radio Clyde last night.  Rangers messageboards have since gone into a frenzy of exaltation.  Salvation is at hand!

As this blog has said a few times, to a drowning man even the smallest straw is worth grasping.  It is with this understanding of the need to have hope that the mendacious arts of the PR firm have been deployed in Rangers’ support once again.  Journalists of low IQ and/or a willingness to prostrate themselves for the cause are very helpful in these exercises.  

The basic subtext being spread is that Mr. Whyte has grown weary of trying to negotiate with the sectarian pygmies in the Scottish offices of HMRC and he is heading to face the main men in London.  A deal that would solve Rangers’ massive tax problems for the paltry sum of £5 million (or some other manageable amount) is on the cards.  “Ha! That will silence that Rangerstaxcase nutter!”

One problem: Mr. Whyte is expressly prohibited from negotiating the Big Tax Case directly with HMRC.  This privilege is reserved for Rangers’ former owner, Murray Holdings Limited- who have their own less serious problems with EBTs and who presumably see a tactical benefit for themselves in keeping the cases together.

Who says Whyte cannot negotiate with HMRC?  Well, Craig Whyte and Michael Scott McGill (representing Murray Holdings Limited) agreed this when they signed the Share Purchase Agreement that delivered Rangers into the hands of Whyte.  Don’t believe me?  Look at this extract from the document below:

Maybe Mr. Whyte arranged for Sir David Murray to join him in London to participate in discussions?  Maybe Mike McGill has some helpful advice that could help include Rangers’ mounting unpaid PAYE, NIC, and VAT remittances in the settlement?  Or maybe Mr. Whyte does not mind having relative strangers sit in on some rather personal discussions?

The big men in London were none too receptive when they were approached by Rangers’ representative in January of this year with an offer to settle for £11 million.  We are supposed to believe that they will now settle for £5 million once Whyte subjects them to the negotiating prowess that saw Rangers land David Goodwillie over the summer for a pittance?

In a week where the head of HMRC has been excoriated by the parliamentary public accounts committee for doing sweetheart deals with tax delinquents, what seems more likely: that a deal is at hand or that a PR charm offensive with the goal of raising the flagging morale of Rangers fans is underway?

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.

1,592 Responses to Rangers’ Negotiations With HMRC: The Truth Is In There

  1. Arfurfuxake says:

    curious onlooker says:

    29/12/2011 at 9:32 pm

    If CW was a footballer he´d score his goals between the 85th and 95th minutes.

    No doubt with penalties 🙂

  2. gunnerb says:

    Hugh McEwan says:
    29/12/2011 at 9:37 pm

    gunnerb says:
    29/12/2011 at 9:27 pm

    Hugh McEwan says:
    29/12/2011 at 9:22 pm

    gunnerb says:
    29/12/2011 at 9:20 pm

    Adam says:
    29/12/2011 at 9:04 pm

    Are they not the only people who can.

    __________________________________________________________________________

    Maybe the change of auditor is not a criminal offence Hugh ?

    ===================================

    It does however require an AGM or an EGM apparently.
    ______________________________________________________________

    The lesser of two evils.

  3. Interested American says:

    It seems like we always need to say “…or what?” to each action (or inaction) by Whyte. Why can’t he just switch auditors? Sure he’s supposed to have an AGM or EGM, but what if he just switches auditors? What is the penalty for a Mullet and Co.-type company signing off on them?

  4. curious onlooker says:

    Arfurfuxake says:
    29/12/2011 at 9:46 pm
    curious onlooker says:
    29/12/2011 at 9:32 pm
    If CW was a footballer he´d score his goals between the 85th and 95th minutes.
    No doubt with penalties
    —————————————–
    Perhaps he´s saving a 30 yard screamer for later !

  5. Brian_Damage says:

    So if Adam’s info is correct that’s MBB pulled another rabbit out of the hat.

    Is anyone able/willing to speculate on what has been done to allow GT to sign-off?

    If the delay was in connection with the big tax case and now GT are satisfied that is a real turn up for the books I’d assume.

  6. OnandOnandOnand says:

    Adam @ 9.34pm

    Plus accounts are lodged electronically, the Plus filing deadline was met at 16.31 on 30th November, always cut to the wire. The audited accounts are an event they require to notify to the market and so should, and I stress should, be lodged, probably 16.31 on 30th December but they may do it 31st December.

    They will be lodged or not, I for one can wait and see little point in speculating until then. Just to be clear, I don’t expect to see anything new in the numbers, it’s the audit report/ true and fair view/going concern/ treatment of the Close loan that may prove interesting

  7. Hugh McEwan says:

    Brian_Damage says:
    29/12/2011 at 9:54 pm

    So if Adam’s info is correct that’s MBB pulled another rabbit out of the hat.

    Is anyone able/willing to speculate on what has been done to allow GT to sign-off?

    If the delay was in connection with the big tax case and now GT are satisfied that is a real turn up for the books I’d assume.

    ===================================

    He will have pulled a rabbit out of the hat by meeting a basic legal requirement. Failing to do so would have been a criminal offence.

    Genius.

  8. Hugh McEwan says:

    Interested American says:
    29/12/2011 at 9:51 pm

    It seems like we always need to say “…or what?” to each action (or inaction) by Whyte. Why can’t he just switch auditors? Sure he’s supposed to have an AGM or EGM, but what if he just switches auditors? What is the penalty for a Mullet and Co.-type company signing off on them?

    ================================

    Would Companies House accept a set of accounts which had not been signed by the auditors.

  9. Brian_Damage says:

    Hugh – any views on how has he managed to get GT to sign-off at the proverbial 11th hour?

    Many on here were creaming their pants at the thought of no audited accounts being lodged within the year.

    Maybe, just maybe, it was some kind of relatively minor problem they were having. Paulie Walnuts said some weeks ago that lines of communication between MBB and GT were silent, so rather than there being a big show-stopper it could just have been MBB’s usual dilly-dallying. It looks like MBB has sorted out these particular problems just in the nick of time.

    That seems to be his MO – a pretty unprofessional way to conduct your business affairs IMO, but not the smoking gun some have been absolutely desperate for. Those of a more paranoid slant may even think that MBB does this deliberately just to wind up some of the foaming at the mouth hoiler than thou types on t’internet. I’m sure that’s not the case however!

  10. easyJambo says:

    If indeed “signed off” accounts are submitted tomorrow, is there also a legal requirement for RFC to disclose significant post balance sheet events, such as any additional borrowings from Close or the Arrestments by HMRC and Bain?

  11. Adam says:

    As far as i know EJ – these should be disclosed yes.

  12. Arfurfuxake says:

    Why is it viewed as a bad thing that he will get the audited accounts lodged? Surely it will give a tremendous insight to what he is doing with the business?

  13. Hugh McEwan says:

    Brian_Damage says:
    29/12/2011 at 10:08 pm

    Not a clue, we will just have to wait and see if Rangers actually submit them and if there are any particular issues with them.

    Thing is, can they have an AGM in the next couple of days or are they willing to commit that particular offence.

  14. Exactly ‘Arfurfuxake’, we were all eagerly awaiting them not so long ago. There will be truth within.

  15. nowoldandgrumpy says:

    Has he not already said he is not going to hold an AGM at this time?

  16. easyJambo says:

    Thanks Adam. – I hope your source is right and that everyone can obtain a bit more clarity about how the finances are being managed from the “Notes to the Financial Statements” and any statement by the Auditors.

  17. Brian_Damage says:

    I’d very much doubt that Hugh and I think you know that as well – especially when MBB admitted a few weeks ago that there would be no AGM this year.

    I am sure he will be able to point to some exceptional circumstances to try to wangle his way out of any rap for that one.

    The big thing is the actual signing-off of the accounts and if GT are happy enough to say RFC is a going concern and any of the qualifications that they have included in any financials to arrive at this view.

  18. curious onlooker says:

    PMcC
    I talked earlier of “righteous positioning” opposed to reallity.

    I give you a recent example from “X”

    “Thing is, can they have an AGM in the next couple of days or are they willing to commit that particular offence”

  19. Thanks Adam.

    I know that Adam does have credible sources and as much as some people dislike his defence of his team / club, he has been very accurate in his statements about RFC. So no reason to doubt him on this.

    On the contrary, it makes perfect sense. Faced with criminal charges for failing to do so, it would be much better to deal with the flak associated with a qualified auditor statement or even an adverse opinion than to give the many organisations looking into his affairs an excuse to clap him in irons.

  20. nowoldandgrumpy says:
    29/12/2011 at 10:22 pm (Edit)
    Has he not already said he is not going to hold an AGM at this time?
    _____________________________________________________
    Like with his tenuous grasp of employment law, he might simply have not known what the requirements were. He has ZERO experience of running a public company subject to ANY degree of public scrutiny.

    Now realising that the law enforcement vultures would be circling over head, he has no choice but to try to make the best of a bad job. Accept a qualified or adverse auditor opinion and hurriedly try to organise an AGM as soon as legally possible (early in the New Year)?
    It might technically have failed compliance with the Companies Act but not in any material way.

  21. Elliptical Hoop says:

    IIRC someone said that if the accounts are signed off as a going concern then Rangers will have to switch to quarterly reporting ? Or did I dream that ?

  22. Hugh McEwan says:

    So the genius move may well be that they submit audited accounts at the last possible minute, possibly with an adverse comment from the auditors. Whilst also committing a criminal offence by failing to have an AGM within the appropriate time.

    Brilliant.

    If I remember rightly Paul McC mentioned that the Co Sec would be guilty of a criminal offence in relation to one requirement but not the other. I can’t remember which was which though. Perhaps Mr Withey has found it necessary to put some pressure on, due to his own reputational issues.

  23. timtim says:

    Its failure to hold an agm that affects Withey,Hugh

  24. Let us all be very clear, the only thing of interest in the accounts will be the auditor’s opinion.

    Most of the rest have already been revealed on here. (i.e. working capital break down).
    A few footnotes will be of interest to us accounting geeks, but the substance is all about the auditor’s opinion.

    Will GT have caved? Or have they been paid a fee that justifies the risk? (Hard to believe these days and given the public profile).

    For a £35k audit fee (will be interesting to see if this has changed!) it would be stupid of GT to not express their concerns about the risk of insolvency.

    Even ignoring the tax case directly, RFC are an insolvency risk. They have no external credit line- and that is what spared Rangers from this indignity in previous years.

  25. Elliptical Hoop says:
    29/12/2011 at 10:41 pm (Edit)
    IIRC someone said that if the accounts are signed off as a going concern then Rangers will have to switch to quarterly reporting ? Or did I dream that ?
    ______________________________________________________

    That is correct if the auditor includes a going-concern warning. (Or more accurately it is the directors who make the statement that the business is a going concern and faces no foreseeable threats to solvency in the next 12 months. The auditors can either record their disagreement or the threat of such a statement can force the directors to issue the solvency warning themselves),

    But you are correct. After a going-concern warning, all PLUS Markets listed companies must switch to quarterly reporting i.e. audited accounts every 3 months, That would mess up Whyte’s beloved secrecy royally.

  26. Elliptical Hoop says:

    Oooooh lovely. ” the beast is sedated. Begin the autopsy ” 🙂

  27. nowoldandgrumpy says:

    Bearing in mind that I am not an accountant, businessman or lawyer, can someone clarify for me please.

    Do the accounts not have to be presented to the AGM and approved. What would happen then if at the AGM them accounts were not approved, or is that unlikely because he is the major shareholder?

  28. Not The Huddle Malcontent says:

    RTC

    the accounts would have some interesting detail on post year end financial transactions – i.e. the Close Brothers loan/security

    also, would it not confirm one way or another if CW had handed over the investment promised in the shareholder circular?

  29. Not The Huddle Malcontent says:
    29/12/2011 at 10:55 pm (Edit)
    RTC

    the accounts would have some interesting detail on post year end financial transactions – i.e. the Close Brothers loan/security

    also, would it not confirm one way or another if CW had handed over the investment promised in the shareholder circular?
    _________________________________________________

    The accounts will only be for the 12 months to 30 June 2011. There is no obligation to discuss events after that date unless deemed material to the company’s ability to survive the next 12 months.

    That gives some leeway to duck providing information on anything Whyte would prefer to keep quiet just now, but I would imagine that any source of cash will be touted as salvation.

  30. OnandOnandOnand says:

    RTC

    31 June………. priceless. Maybe they will have corrected that by now

    [RTC Edit: very funny smart arse! :-)]

  31. OnandOnandOnand says:

    RTC

    You were right the first time, the draft unaudited accounts are to 31 June 2011, see here

    http://www.plus-sx.com/newsItem.html?newsId=1419465

    paragraph beginning “In May, 5th paragraph

  32. ScottyJ says:

    So has all this rigmarole with the accounts simply been to delay having the MBB standing up at an AGM taking “awkward” questions?

  33. Adam says:

    Had a few further exchanges to see how confident she is the info is correct and she is pretty certain from what she has been told about “submission prep” though no nitty gritty detail.

    So unless this is another “smoke em out” operation then it looks pretty solid they will be submitted tomorrow.

    I cant believe though if its the case, there hasnt been some sort of compromise. Interesting times ahead.

  34. Adam says:

    Onand x 3 – Whilst i appreciate they will be submitted electronically, im pretty sure that someone in plus would need to proof them before letting them loose on the WWW. I might be wrong about that though.

  35. OnandOnandOnand says:

    Adam @ 11.29pm

    No, they’re not approved by Plus, they are just uploaded through a financial newswire system, look at the draft unaudited accounts a few postings ago, Dow Jones Newswire

  36. Goosy says:

    Why do people think MBB has been trying to avoid a qualifying statement by the auditors that the business is close to insolvency ?

    Surely thats exactly the excuse he needs to turn as many players as possible into cash in Jan and move the money into some offshore company ?

    The real trick has been to prolong release of bad news to the last date possible
    He can now open up the scenario of the AGM becoming a serious appeal to fans for funds or else go bust

  37. Justinian says:

    Adam says:
    29/12/2011 at 11:27 pm

    So unless this is another “smoke em out” operation then it looks pretty solid they will be submitted tomorrow.
    ______________________________________________________________________________

    So, unless I am reading this wrongly,….

    If this is a “smoke em out” effort then you have narrowed the field somewhat wrt a contact within RFC.

  38. andy Fitzpatrick says:

    Is there any other source or grapevine whispers,, I know a few guys in tax and accountancy with big firms in the UK and in jersey, I asked them if there were any gossip,I know Adam has been bang on a few times but I was wondering if news like this would start a wee sewing circle gossip or would the story be kept in a small circle of people.

  39. George A says:

    If Grant Thornton are prepared to sign off a set of unqualified accounts then it’s very good news for the club

    It means that they believe one of the following

    1 the tax case is likely to settle at an amount that the club can afford to pay

    2 the tax case is likely to settle at an amount that the club can’t afford but that sufficient external finance is available to allow the company to continue to trade

    3 the liability is unlikely to crystallise within the next 12 months – maybe because of appeals etc

    Also be interesting to see if GT feel that an amount needs to be accrued to meet the outcome of the tax case

    As I understand it a qualified opinion can be either on the grounds of uncertainty (we don’t know whether it shows a true and fair view) or adverse (we don’t think it shows a true and fair view)

    Sincere thanks to Adam for this info

    Should be an interesting day

  40. Sergeant Pluck says:

    I have no idea whether or not the story about the “overcharge” on last night’s tickets is true. I do know, however, that the chap who posted the story is one of CQN’s most reliable & respected posters and not someone who is normally given to posting balderdash.

  41. OnandOnandOnand says:

    Just to remind you, Wee Craigie is no stranger to qualified accounts in plcs. Merchant Corporate Recovery plc’s one and only set of accounts were qualified by the auditors as they couldn’t agree the basis of valuation of the investments. The next set of those accounts will be interesting but we will have to wait for them. They would have been due 31st October 2011 but the accounting reference date seems to have changed to 29th June, as allowed for in the Companies Act 2006, and so will not now be due until 15th March 2012, per their Companies House record. If all was well with those terrific investments (LM Logisics being a total loss of £609,000 aside), why extend?

  42. lou says:

    He’s not daft Mr Whyte – leave breaking the bad news until the whole of Scotland’s completely blitzed for Hogmanay. No sunday papers to pick over the bones of the finances. I have a picture in my head of thousands of bears sobering up around Tuesday to find half the team sold and MBB exiting stage left. Its maybe jst my imagination running away with me!

  43. Johnboy says:

    Lou, I think you’ve hit the nail on the head.
    This is about news management.
    Reease the accounts tomorrow, then the Daily Record, Sun (and STV) will regurgitate unquestioningly whatever piece-of-crap press release that Rangers and their spin doctors choose to send out.
    There will be newspapers this Sunday but most of them will be full of pre-written reviews of the year that no one will read. And they tend to steer clear of financial news in any case.
    But there could be one hell of a hangover awaiting Rangers fans on Tuesday when they begin to twig the mess Whyte is about to leave them in.

  44. Bawsman says:

    Has MBB complied with the SFA ‘demand’ for him to supply details to them as to why he was he was barred from holding a directorship for 7 years?

  45. Bawsman says:

    Has MBB provided information of at least ONE company he has turned round or improved?

  46. Bawsman says:

    Has MBB actually sued the BBC yet?

    Are all RFC employees still banned from communicating with the BBC on threat of termination of employment?

  47. Bawsman says:

    We are not journalists – but guys, these are basic questions our MM should be asking.

  48. Tommy says:

    Brian_Damage,

    Your are no doubt aware of the furore your disgusting moniker is causing to this blog. It’s bad taste was debated at length several days ago while you remained silent for some strange reason. Now that you have resurfaced, perhaps in the interests of good taste you could opt to post with a less offensive title.

  49. Paulie Walnuts says:

    Interesting times people.

    I see the beginnings of a turn against Whyte on the Rangers message boards. If he does not come up with a solution in January they will turn quite quickly.

    I would not be surprised to see accounts lodged tomorrow. I cannot imagine any circumstances in which GT could not qualify them as to going concern status.

    Still no summons against the BBC, although I did hear in the last few days that Whyte has had a consultation with Roddy Dunlop QC. He is probably the premier defamation guy at the Scottish bar. A proper heavyweight and would probably have been top of the BBC’s list as well. Now I suppose he may have told Whyte that he’s wasting his time and money and that Whyte has no case and shouldn’t sue, but the fact that he was consulted at all suggests that it is not entirely a cosmetic exercise. He’s certainly a major step up in quality from BKF’s usual efforts.

  50. JoeMc says:

    It’s not a criminal offence not to file accounts by the due date – at companies house Level it only gives rise to a civil penalty for late filing. In context it will be how interested FIFA, uefa and the spl become due to the financial fair play rules that will be the most interesting development after the accounts are not filed on time. Rumours of rangers accounts being signed off by the end of the year – well I chuckled when i read that.

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