Rangers go into administration

[starchief]

It's absolutely 100% not just Rangers in the mix for the tax avoidance scam. Expect many English teams to be quaking in their boots if the result goes against Rangers. Spurs was the first shot, Rangers, the second. Both barrels coming down for many clubs soon.

[CaleyD]

No...because it is not the employee who has broken the rules. It is the Contractor/Companies responsibility to deduct the relevant tax and pay HMRC.

EBT's (Employee Benefits Trusts) work by "paying" an employee part of their salary by means of a loan. That loan is invested in a a Trust and all kinds of weird and wonderful conditions are attached to make it unlikely (although not impossible) that the loan will ever be recalled. Over and above this, employees are paid a basic wage and can borrow against the money they have invested in the Trust....the company then takes repayments for the second loan from the Trust which holds the proceeds of the first loan.

By placing the Trust Offshore, they avoid payment of Income Tax & National Insurance on the EBT portion of their salary....although I believe some corporation tax liability exists on the part of the transaction done in the UK.

The HMRC have disputed the legality of these schemes from the outset, rightfully claiming that they were "Disguised Remuneration", and anyone setting up such a scheme knew there was always a risk that they would be pursued for the tax that had been avoided. Legislation changed at the end of 2009 which put an end to such schemes one and for all and the pursuit of outstanding taxes begun.

HMRC gave companies until December 2011 to sit down with them and agree settlement...they offered incentives for those willing to co-operate.

From what I understand, Rangers FC refused that option and that is why they are now being pursued so vigorously.

Why Rangers FC refused to co-operate and reach settlement is open to speculation, but I suspect it was in large part due to the fact that the moment they settled then money would be due....money which they do not have...and any repayment plan would have left Rangers owing money to HMRC and any club owing money to the Taxman is not allowed to participate in European Competitions.

[Scarlet Pimple]

What is clear is that the run -up of such a huge debt debt had to be deliberate. Their assumption was that they could wriggle out of it eventually in some way, shape or Form. For their sake I hope they are right but for the sake of all decent people I hope the Tax men do mthem in mightily and teach themn=m a lesson they will never be able to forget.But the fcat that Rangers pre-emoted tmje from doing the Sdministration business is suspicious

The top brass of Rangers must be cynical to a fault, and basically dishonest, if they knew that they stood a good chance of getting away with a lot of the debt either being written off or reduced. And knowing that ultimately screwing the tax man and getting away with it so easily is lttle more than screwing the British taxpayer deliberately.

Cynical may be flattering to them; perhaps depraved and criminally-minded might be more appropriate. Time will tell.

Although I do find it odd that Rangers appears to have pre-empted the Taxmen by doing the Administration thing before the Revenoors got to the club first, don't you? It could appear that the all-knowing taxmen got caught with their pants down--something that , frankly, I just don't believe!

It would make much more, rational, sense in the circumstan to believe that they did some kind of a deal with HMRC because the Revenue guys hav all the money and power in the world to have this long-running feud with rangers sewn up long before now. And their apparent lack of direct actionagainst the club to date could easily be interpreted as reason enough for the Rangers Brass to have acted with such impunity to date--almost as if they knew that getting off was not only likely but a foregone conclusion.

How many would mourn their passing?

[starchief]

Statements today suggest it's nothing to do with the big tax bill - and that Murray still believes Rangers have a better than even chance of winning that case. Rather, it's about a £9M bill run up in the last year.

I have no idea what's happening.

[mainstander]

Murray still believes Rangers have a better than even chance of winning that case.

He would wouldnt he given that he created the whole HMRC situation in the first place!

[KingBeastie]

I've been a bit surprised by the number of friends who are non football fans who are quite happy and find it amusing to see rangers in this situation. Just goes to show how much the behaviour of rangers fans over the past 15-20 years has really go to so many people even those who don't even follow the game.

[Yngwie]

Rangers fans have been very smug for most of the last 25 years, so it's refreshing to see them humble. And greeting on the national news.

[Yngwie]

Schadhunfreude!

[davie]

My heart gave a little leap of joy every time I saw that blond haired guy greetin.I don't buy the "too big to die" argument. Dinosaurs did, and the planet adapted admirably. They are an institution only in the number of lunatics that are gathered around there right now, and deserve no intervention from the rest of us. I think that Rangers are in grave, grave danger of unravelling completely as liquidation stares them in the face. If HMRC are pursuing only what liabilities have been racked up since Whyte took over and that has led them to be unable to pay their way, people are going to be very interested in what happened to the dosh he got for selling the catering rights, what he got for Jellyfish and the unpaid PAYE for the year. What's he done with it? Given that this debacle has tarnished his reputation beyond any repair will he actually care about the aftermath or simply sit back and trouser any reasonable offer that comes for Castle Greyskull (presuming that point 1 (above) doesn't constitute illegality)You never know, it might pay for his roof.

[starchief]

It's always used as an insult but Castle Greyskull is where the heroes live, i.e. He-Man, Man-At-Arms etc.

Snake Mountain is where the likes of Skeletor are based.

...not that it's important - just sayin' that's all....

[Scotty]

Snake mountain seems oddly appropriate .......

[ICTRoughi]

from BBC

Its TV deal includes a clause stipulating the participation of both Celtic and Rangers in the SPL.

Rangers' administrator must now agree a Company Voluntary Agreement with the Glasgow club's creditors.

Should it fail to do so, any new company taking the Rangers name would have to apply for re-admittance.

And that would be subject to a vote from the remaining 11 clubs.

At least four of those clubs are believed to be owed money by Rangers - Hearts for the £1.5m summer purchase of Scotland full-back Lee Wallace and Dundee United, Dunfermline Athletic and Inverness Caledonian Thistle for ticket sale proceeds.

Clark and Whitehouse have been appointed Rangers' administrators

Clark and Whitehouse have been appointed Rangers' administrators

The SPL announced a new five-year contract worth £80m in November and it is due to come into effect at the beginning of next season.

Rangers entered administration following a legal battle with HMRC over tax arrears, with new owner Craig Whyte estimating that a court action could lead to a demand for £75m.

Joint administrators Paul Clark and David Whitehouse, from Duff and Phelps, have since confirmed that HMRC's action stemmed from the alleged non-payment of £9m in VAT and PAYE dating back to last year, when Whyte bought the club from Sir David Murray.

Following Rangers' appointment of Duff and Phelps, the Glasgow club were immediately docked 10 points by the SPL, which also imposed an embargo on player signings.

SPL chief executive Neil Doncaster is hoping to meet representatives from the administrator in the next couple of days.

His Scottish Football Association counterpart, Stewart Regan, on Wednesday met the men given responsibility of handling Rangers' financial affairs.

Meanwhile, the brewer, Tennent's, has already said that it will continue its deal with Rangers despite the club being in administration.

Dundee were the last Scottish club to face a similar plight to Rangers, the First Division club spending seven months in administration until May.

Livingston were demoted by the Scottish Football League from Division One to the Third Division in 2009 after going into administration.

Gretna were the last senior Scottish club to go out of business, suffering relegation from the SPL in 2008 while in administration, being demoted to Division Three but being unable to come out of administration in time to continue in the league.

[old caley girl]

BBC Sportsound have just read out the number of employees that Rangers have. Huge numbers of folk are going to lose their jobs through no fault of their own. 20 people work in the ticket office alone. No matter how you feel about this youve gotta feel sorry for a lot of people.

[Scarlet Pimple]

And I will bet quite a few of their very highly-paid players will be having a few nightmares at this time.

Come to think of it, in what way are they sellable and how much are they now worth to the club. Let's say that they sold off every player currently on their roster would the total pounds received be sufficient to clear off all the debs I wonder?

That would surely put them right out of business but would pay off all the hard working, and no doubt more honest, businesses and folks which/who have serviced that club over the years. Not to mention the unfortunate employees of Rangers F.C.

Is anyone really thinking about the small businesses, and other folks mentioned, at this ? If they lose their livelihood can you blame the HMRC for being punitive when the ownership of the club has deliberately been avoiding the payment of ongoing and legitimate debts to the Taxpayers' representatives? Answer , IMHO, ...NO!

[Alex MacLeod]

There's a lot of spin in the press and coming from Ibrox. They all emphasis the fact that HMRC have taken action for a £9 million claim for the last financial year. HMRC are not letting go on all the other tax dodging antics. They have to present a winnable case to the courts to force administration and that was the winnable part. Dont anyone be kidded into thinking the rest has been dropped. Whatever monies become available, and whatever deals are struck with the debtors you can be sure that HMRC will get the lions share and all others, including many struggling small business's, will get peanuts if they're lucky.

Rangers will then come out of administration, albeit left with no more than a small squad of youngsters. They will have a ticket at least two european games. They will spend two or three seasons in the lower to mid half of the league then they'll stick the fingures up at those who've lost out and start to challenge again, possibly with someone coming in and buying a debt free club.

[CaleyD]

If Rangers are not out of administration by 31st March then they won't be allowed to play in Europe next season.

If they do come out of Administration and the £49 Million case has not been settled they will not be allowed to play in Europe next season.

If they go into liquidation and re-appear as a Phoenix Company then they won't be allowed to play in Europe for 3 years.

If I was Rangers, I wouldn't be factoring Europe in to the budget for recovery.

[+DoofersDad]

Very disappointed with Alex Salmond today courting the votes of the Unionists. He said that the most important thing here was the survival of Rangers football club. Wrong Alex! The most important thing is that the tax payer gets as much money possible out of the criminals who run that business.Whether or not Rangers' survival is good or bad for Scottish football is not the issue here. Those running the club, past and present have been deliberately withholding money from the taxpayer - money which could be used for a whole raft of essential public services which are being squeezed at the moment. Carer support for the elderly, books for school kids, repairing crumbling roads, investing in the NHS - you name a worthy use of public spending and Rangers football club is stopping it happening.

It is extraordinary that there is a mindset in this country that almost accepts failure to pay tax as a bit of bad luck and those who fail to pay can negotiate with the authorities to agree to pay back whatever minimal amount of their debt they can get away with. They then start again buying into a debt free company owned by their mates who bought the assets at knockdown prices. They then find new ways in which to spend money they haven't got and steal more from the taxpayer. Every asset of the club should be sold and those responsible for the theft should have their personal assets including money hidden in other companies identified to pay back as much of the debt as possible. They should be allowed nowhere near a football club again.

[Gabby]

So, HMRC's action to force administration today was a result of unpaid taxes dating back to May last year and not the "big case".

Is that an indication that their problems run deeper than the big tax case....or a deliberate "money saving" ploy because they knew the big case was always going to get them and the chance to pay off that bill at Xp in the pound seemed too good a chance to pass up?

What about the frozen assets? I thought that had been done to secure payment of certain (possible) liabilities...do those frozen assets remain frozen to cover those liabilities if/when they fall due, or does administration mean that it's all back to being one big pot for everyone to fight over?

When Criag Whyte took over a Rangers he agreed to clear the known debt of 18 million pounds. At the point he became a secured creditor of Rangers. As a secured debtor his 18m is safe. It will be interesting to see where all the missing money is. There is no logical reason for Rangers not to pay this years VAT etc especially since (by his own reckoning) is cost 4.5 m pounds to run Rangers each month and a history of Rangers revenue (even conservativley measured) would easilly exceed this.

If I was a suspicious person, I would think that the mortgaging of future season ticket sales would provide the liquidity to immediatly secure his original 18m pound investment. If I was a really suspicious person I would think he was preparing for asset stripping.

[old caley girl]

Very disappointed with Alex Salmond today courting the votes of the Unionists. He said that the most important thing here was the survival of Rangers football club. Wrong Alex! The most important thing is that the tax payer gets as much money possible out of the criminals who run that business.Whether or not Rangers' survival is good or bad for Scottish football is not the issue here. Those running the club, past and present have been deliberately withholding money from the taxpayer - money which could be used for a whole raft of essential public services which are being squeezed at the moment. Carer support for the elderly, books for school kids, repairing crumbling roads, investing in the NHS - you name a worthy use of public spending and Rangers football club is stopping it happening.

It is extraordinary that there is a mindset in this country that almost accepts failure to pay tax as a bit of bad luck and those who fail to pay can negotiate with the authorities to agree to pay back whatever minimal amount of their debt they can get away with. They then start again buying into a debt free company owned by their mates who bought the assets at knockdown prices. They then find new ways in which to spend money they haven't got and steal more from the taxpayer. Every asset of the club should be sold and those responsible for the theft should have their personal assets including money hidden in other companies identified to pay back as much of the debt as possible. They should be allowed nowhere near a football club again.

David Cameron at it now as well according to the bbc.

[CaleyD]

I think you're spot on Gabby, and had it not been Craig Whyte, it would have been someone else.

I have been known to criticise for the deal that saw ownership of Caledonian Stadium removed from the club. I may not have liked what happened, and still don't, but when you see stuff like this going on with Rangers even I can't fail to appreciate that some of the alternatives available to us back then would have had a far more disastrous outcome. Like, dislike or simply fail to understand what exactly happened when moving the debt along with the stadium, nobody was cheated of taxes, nobody was paid off to the tune of pennies in the pound and (at the time) employees weren't being cast on to the street.

You have to wonder why the same options were not explored by Rangers. They've already stated that they wanted to seak a "payment plan" with HMRC which suggests they were willing/able to take on large payments on a regular basis. Why not, if refused that option, choose to do that by effectively mortgaging Ibrox, Moray Park and the Car Park?

Craig Whytes' background hardly suggests that he is a trustworthy custodian and this has been borne out by revelations that he has clocked up near £10 Million in additional debt with the taxman since arriving at Ibrox.

Is it possible that Murray was not willing to tarnish his own character by doing over the public purse via administration so that the Stadium etc could be mortgaged off on the cheap, so Whyte was brought in to do it instead? That's pretty much how I see it. Whyte will effectively end up owning everything for a fraction of the cost and I'll put money on some "Blue Knights" riding in to do a deal to purchase it from him, giving him a few quid for his part in everything and then disappearing.

The only thing I don't think was part of the "plan" is Whyte running up all the additional debt. Yeah, from a ruthless self-interested business perspective, if you are almost certainly going to go into administration anyway, then racking up the debt as far as you can before hand and then paying it off at pennies in the pound along with everything else makes some kind of twisted sense....but it would appear that this happened to the point where, in terms of agreeing a deal to come out of administration, they are now going to be relying heavily on the good will of those they have screwed the most...and that is a ludicrous risk to be taking with the club.

The only thing we can be certain of is that the only person who won't lose anything when all is said and done is Craig Whyte. Even if Rangers went out of existence, he would have property which could be sold for more than he might be invested at. Even if that "investment" is nothing more than paperwork and it hasn't cost him a penny.

[kencar]

The first redundancies have just been announced by the administrators.....

4 referees and 8 assistant linesmen have been told their services are no longer required

Edited February 16, 2012 by kencar

[davie]

Did someone say preparing for asset stripping? This is what I think (figures are approximate)

Liabilities

Tax Case£36M

Unpaid Taxes£9M (the administration trigger)

Ticketus £25M plus interest

SPL Teams £1M (Dunfermline, Dundee United etc.)

Rapid Vienna £1M outstanding for Jelavic

Stockholm £250K outstanding for Cellik

£71 250 000 minimum

Other outstanding debts to various creditors would probably indicate an estimate total indebtedness for RFC of £100M. Any prospective buyer would then have to consider replacement of player contracts for those annulled during administration, probably something in the region of £5M. Craig Whyte (if anything can be believed) has stated that RFC requires £3.5M revenue costs per month, so a season’s worth of working capital would seem sensible. The total cost required for any investor is therefore around £136.5M and it is unlikely that they would attract any credit/ financing arrangements from financial institutions given the toxicity of the investment and the present financial climate.

Assets

Stadium (owned by Craig Whyte)

Murray Park (owned by Craig Whyte)

Season Ticket revenue (prior claim by Ticketsus)

Catering rights (realised by Craig Whyte)

Walk in sales £5M estimate

£5M maximum

Potential income per annum (excluding merchandising) is therefore less than 2 months revenue outgoing. The position on merchandising is unclear, as Whyte may have sold some or all rights and JJB run their shops but it would be required to generate £24.5M to achieve break even assuming 100% write off on the debt. SPL/ Sky income is minimal in this context, and there is no possibility of UEFA funding for a three year ban period. There has been speculation that every home game generates around £1.5M for Rangers (making for much better balance) but it's not clear if that includes pre-mortgaged season tickets.

Conclusion

RFC are unlikely to attract an investor willing to invest around £75M as a capital investment plus an additional annual provision of capital to the tune of £10M+. Any of the previous Board’s offsets are unavailable, as the major realisable assets either belong to or have been sold by Craig Whyte. Any post administration investor would have to purchase these from Mr. Whyte or build a new stadium and training ground. Given that either option would cost in excess of £50M it escalates the cost of purchase to around £125M, which is wholly unrealistic. It would appear that liquidisation is the only possible option that is open to RFC, with the creation of a debt free phoenix club because the present Board have efficient denuded the club of any cashable assets. They are, in short, stuffed. And if anyone still thinks that we need them, read this:

http://wingsland.podgamer.com/why-scotland-doesnt-need-rangers/

[CaleyD]

http://wingsland.podgamer.com/why-scotland-doesnt-need-rangers/

Pretty much what I have been saying for weeks/months/years!!!

[lukemackay]

http://www.highland-news.co.uk/Sport/Football/Inverness-Caley-Thistle/Carnage-Tel-stunned-by-Rangers-crisis-7618903.htm

nice wee post from terry on the matter

past experience

and he puts a sly wee mention about our financial position and how we are in a good place financially.

well done tel

[Ten4]

yeah, kick them out & quick

now that they are in administration, for them to just come back out of it as if nothing has happened is going to

cause just as any problems.