Rangers go into administration

[Gabby]

Let's be clear. Rangers have been found guilty of the Big Tax Case and they have admitted guilt. The appeal is against the size of the peanlties and interest on top of the outstanding tax.

The appeal is on the basis of diminished responsibility....i.e. Rangers defence is one of "we didn't know we were breaking the tax laws". The job of the tribunal is to ascertain whether or not (on the balance of probability) that is true. HMRC do not have to prove that it was deliberate in every case, they just require enough to show that Rangers knowingly and purposefully broke the tax laws as part of the scheme. In other words, do the claims of ignorance hold water.

It comes down to whether or not the payments were discretionary or non-discretionary (was it part of a salary package or not). If the existence of side letters can be proven (and the BBC claims would suggest it can) then it's case closed as that would be as damming as it gets.

On top of that it throws open the player registration breaches with the SPL/SFA...and I have to say that I believe the SPL & SFA have been negligent in their handling of that to date. For a start, the SPL didn't begin looking in to it until March when they should have been investigating it in parallel with the Tax Tribunal. We then learn this week (although we kinds knew before) that Rangers have not released the required information to them...why have they waited this long before setting a deadline? Furthermore, as it involves player registrations then why have the SFA not been investigating?

UEFA have to be looking at all this and wondering if these associations are fit for purpose, if they're not then it's more than just Scottish Football that's screwed up.

No it's not. They are appealing the amount of the penalty and interest. Regardless of the result on the FTT, the original tax owed from the EBT's will stand. This seems to be a fairly common error amongst the scottish media.

[CaleyD]

Yeah, the original tax will stand...not claiming it wouldn't.

Penalties and Interest are a set formula, you can't just conjure up an appeal on the basis that you think they are too much, you need to have mitigating circumstances in order to ask for them to be reduced. Rangers (claimed) mitigating circumstance is that "we didn't know we were breaking the tax laws". Whilst it's not quite as straight forward as that (ignorance being no defence and all that), it's basically what their claim amounts to.

[+DoofersDad]

Yeah, the original tax will stand...not claiming it wouldn't.

Penalties and Interest are a set formula, you can't just conjure up an appeal on the basis that you think they are too much, you need to have mitigating circumstances in order to ask for them to be reduced. Rangers (claimed) mitigating circumstance is that "we didn't know we were breaking the tax laws". Whilst it's not quite as straight forward as that (ignorance being no defence and all that), it's basically what their claim amounts to.

You may be right and they may be right in that they may not have known they were breaking the tax laws. But surely the point is that they should have known they were breaking the tax laws. The actions they took were specifically designed to avoid paying tax and therefore they should have received confirmation from the appropriate authorities that the actions they were taklng would not incur tax. They did not do that. Not knowing is therefore a reflection either of their own incompetence or their own deviousness. Neither is an acceptable defence.

[CaleyD]

Yeah, that's why I had the "not quite as straight forward as that" caveat in my post.

As I understand it, Rangers are arguing a case that left and right hand never spoke to each other and that breakdown in communication resulted in the misuse of the EBT. Hence the "Silly us Mr HMRC, we'll pay what we owe, but surely you can understand our position and can you please reduce the interest/penalties" approach.

Such a defence was always going to be fairly futile, IMO, and the appeal is/was nothing more than a stalling tactic. Only the extremely naive are still of the opinion that Rangers route to (impending) liquidation was not a foregone conclusions long before Whyte got involved and if they can get to that point before the tribunal is decided then the worries of the Big Tax Case disappear along with the OldCo. Let's face it, if Craig Whyte didn't drive the company to the wall by withholding PAYE etc for the best part of a year then the Big Tax Case was going to do it....even if HMRC wiped out all interest and penalties.

Murray needed to delay the Big Tax Case long enough for him to get the fork out of Dodge and Craig Whyte was taken in as someone who was willing to take the flak and was morally bereft enough to rape the company for everything he could before the curtain finally fell as his payment for that.

[Gabby]

Yeah, the original tax will stand...not claiming it wouldn't.

Penalties and Interest are a set formula, you can't just conjure up an appeal on the basis that you think they are too much, you need to have mitigating circumstances in order to ask for them to be reduced. Rangers (claimed) mitigating circumstance is that "we didn't know we were breaking the tax laws". Whilst it's not quite as straight forward as that (ignorance being no defence and all that), it's basically what their claim amounts to.

They are appealing on the grounds that they didn't expect to be caught.

[MarkD]

Is there some source for all the facts quoted here? I can't see any decision on the FTT website and as far as I was aware Rangers were contesting whether there was tax due from the EBT.

There's no appeal against interest as that's just a calculation, but on penalties in fact it is for HMRC to show negligence (a fact they often omit to state) and if Rangers took 'proper' legal advice then prima facie they can claim they weren't negligent. In the case of EBT's there have been cases where they were upheld initially (eg the Phones 4U case - Dextra Accessories) so if the courts can't decide whether they work or not it's hard to prove negligence. Although in this case it may have been negligently implemented from the sound of things.

And finally, presumably if HMRC do get penalties, this just reduces the amount that goes to all the small creditors.

[CaleyD]

The (claimed) facts tend to change day by day and I have been careful to try and not state stuff that is widely believed/accepted as fact because until the full findings of the FTT are known then there is no facts on the case as we do not know what evidence/sources of information are being considered.

I think it's more accurate to say that it's "widely accepted" that Rangers will have to pay the Tax relating to the EBT's. I'd have to do some digging to find it, but Murray as good as admitted this before selling to Whyte and Whyte has also made statement to the effect that payment of the Tax "would be handled".

As we now know "would be handled" will be, at worst (for Rangers), something to the tune of pennies in the pound and at best (for Rangers) nothing at all if they are liquidated before the FTT gives final findings. Although I am not convinced that HMRC would not be able to put a freeze on the transfer of Assets to a NewCo until the FTT was decided. My thoughts on this are based on the fact (yes fact) that this is an appeal, the invoice for unpaid tax exists and has merely been set aside temporarily until the appeal is heard.

It is also widely accepted that Rangers are merely delaying the FTT process. An FTT normally has a timescale of 2 or 3 weeks in which a decision is made and delivered. With us now around the 18 month mark without a decision then such a claim almost certainly holds water.

The only people playing the "Nothing has been proven yet" card are Rangers fans who refuse to accept the case being presented against them on all fronts. This may be technically accurate, but it's only acceptable to those living in desperation and futile hope that it will all magically disappear.

[CELTIC1CALEY3]

Rangers as a man of straw should be arguing that HMRC would be better chasing the recipients of tax free loans.

This is a very good article:

http://www.scotzine.com/2012/05/desperate-measures-from-rangers-as-they-head-to-court-of-session/

which paints a picture of the sinking ship potentially taking others down if it cannot get its way.

The summer of 2012 is likely to make our 2004 summer issues with Partick look like a full body attack by 1,000 midges compared to one midge bite. The BBC this week have really livened things up. Next week could be an absolute watershed for SPL Chairmen. They may hear a FIFA ruling to the SFA about Rangers latest course of action. They will probably have witnessed Duff and Phelps issuing a CVA knowing it would be a further 6 weeks before they might come out of administration. They will know fixtures will be published fairly soon - Rangers/Dunfermline/Dundee versus ICT. The BBC probably have a few more aces up their sleaves on Duff and Phelp's role so it will be fascinating to see their court case with the BBC.

Inverness Caledonian Thistle is though in a much healthier state than Glasgow Rangers.

[Heilandee]

"Meanwhile, SPL bosses have done a U-turn by admitting Rangers will be allowed to compete in the top flight without an SFA club licence.

The club’s failure to submit audited accounts for last year by March 31 breaches the SFA’s club licensing criteria.

But yesterday SPL secretary Ian Blair insisted that would not block Rangers from competing in the elite division next season.

That’s despite Blair writing to member clubs nine months ago insisting a licence would be essential for any team taking part in the 2012-13 season.

That would make the Glasgow giants the only senior club in the country operating without a licence.

“Whether clubs do or do not have that licence is not currently relevant to their participation in the SPL.

“There is work going on behind the scenes with ourselves, the SFA and the Scottish Football League in order to establish a more unified policy.”

Scottish League sources confirmed Rangers would be allowed to enter next season’s League Cup without a licence.

The SFA also admitted they would be allowed to take part in their flagship competition, the Scottish Cup, even though their licensing laws suggest they could be kicked out of

football.

And Under Article 35 it states: “Clubs failing to comply with the requirements of the Club Licensing Procedures shall be liable to a fine, to a suspension, to an expulsion, or such other sanctions as are provided for in the Judicial Panel Protocol.”

Meanwhile, on the other side of the Scottish footballing universe,Inverness City get relegated,instead of promoted coz "rules have to be adhered to"! As ever, ya couldnae make it up wi the tubes running the game in Scotland. Maks me

[CaleyD]

With todays ruling by the Court of Session that the Trasfer Embargo was not an option open to the SFA and FIFA announcing that they will be asking the SFA to take action against Rangers for going outside both SFA and FIFA rules by taking action in the ordinary courts then you do wonder where things are going to go now.

The judge hearing the case also commented that a fine, suspension and expulsion were really the only options open to the SFA for punishing Rangers and that just because he had thrown out the Transfer Embargo, that did not mean Rangers should escape further punishment.

Looks to me like Rangers are calling the SFA bluff in that they will not suspend/expel them....but with FIFA now getting involved and the risk (based on past actions by FIFA) that the SFA could be thrown out of world football, then it would seem that things are far from over.

[+Tree]

This may well be the latest in a long line of mistakes by people connected with or involved in the running of the club.

The reality is that FIFA are unlikely to accept a precedent being create for a club of a member organisation taking action through ordinary legal process and are very likely to put pressure on the SFA to take serious action against the club to send a clear message. The loss of income from Scotland being excluded from World Cup qualifiers, etc may well prove too much of a factor for this to go without the sanction of suspension or less likley expulsion.

Time to read the SFA articles re taking action through the courts.

[+DoofersDad]

I wonder if Rangers have shot themselves in the foot here. The SFA were saying that the seriousness of the offence warranted more than a fine but they were loathe to take action which would stop Rangers playing. If the imposition of a transfer embargo is now deemed to be illegal then the SFA may now revisit this and impose a suspension. This, or even expulsion is surely now more likely with the added pressure from FIFA.

I always thought that the transfer ban was a blessing in disguise for Rangers. They have a number of talented youngsters in the side and whilst they would be unlikely to challenge at the top this would be a real opportunity to bring the youngsters into first team action and bring them on. This would be an investment for the future and the source of potential transfer income in the coming years. Whatever happens now there will be less to keep the youngsters at Ibrox.

When the book of all this gets written it's going to be longer than War and Peace. More like the Bible I guess. An old testament and a new testament, most of it unbelievable but with revalations at the end.

[CaleyD]

Article 65.5 of the SFA Articles of Association

The fact of membership of the Scottish FA shall constitute an agreement by a member that it, or any body or person interested through such member, shall submit all disputes to the jurisdiction of the Judicial Panel and shall not be permitted to take such differences or questions to a court of law.

FIFA Statute 64.2

Recourse to ordinary courts of law is prohibited unless specifically provided for in the FIFA regulations.

There's also an article at - http://www.scotzine....urt-of-session/ - is where it claims the last association to find itself in this position (Chilean) were faced with taking action against a club or being thrown out of FIFA. Backed up by BBC article at - http://news.bbc.co.u...als/8382018.stm

[old caley girl]

Article 65.5 of the SFA Articles of Association

The fact of membership of the Scottish FA shall constitute an agreement by a member that it, or any body or person interested through such member, shall submit all disputes to the jurisdiction of the Judicial Panel and shall not be permitted to take such differences or questions to a court of law.

FIFA Statute 64.2

Recourse to ordinary courts of law is prohibited unless specifically provided for in the FIFA regulations.

There's also an article at - http://www.scotzine....urt-of-session/ - is where it claims the last association to find itself in this position (Chilean) were faced with taking action against a club or being thrown out of FIFA. Backed up by BBC article at - http://news.bbc.co.u...als/8382018.stm

Oops have they finally blown it this time or can they wriggle of the hook again? Personally I think the punishment may be a years ban from the Scottish cup.

[CaleyD]

The problem with that is FIFA are unlikely to see that as sufficient punishment for taking the case to the ordinary courts, let alone punishment for bringing the game into disrepute in the manner which they have.

[+DoofersDad]

I think a crucial point is being missed here. Whilst the rules would stop Rangers taking the SFA to court to argue against what it might feel to be an unfair application of a power that the SFA actually have, it is surely right for Rangers or any other team to challenge the SFA in the court when the SFA have acted outwith their remit. I assume the court took this view too as otherwise they would have thrown the case out as being outwith their jurisdiction. It is analagous to employment contracts where your terms of employment may preclude you having any legal representation in disputes with the employer over terms and condidtions but you would have every right to challenge your employer in the courts if you felt that what they were imposing was contrary to employment legislation.

Having said that, I would have thought that both the SFA and FIFA would take a dim view of the approach Rangers took. Regardless of the legal nicities here, there is a clear expectation that representation to the judicial panel would be the first line of approach and only when that failed would legal action be considered appropriate. I must confess that I have not followed this in detail and apologies if Rangers did actually try the judicial panel first. I am sure Caley D will keep me right on that.

[CaleyD]

The SFA broke no laws....what the Court of Sessions performed was a Judicial Review, which is basically them taking the Associations Rules and applying them (using their own understanding) to the actions that were taken and giving a decision on whether that was right or wrong. That is exactly the same thing as would have been done by the Court of Arbitration for Sport.

The same scenario exists within the example you give. If an employer took disciplinary action against an employee which they did not agree with then you have to go through the appeal and tribunal process before taking it to the courts.

[Heilandee]

The latest dramatic twist see's Rangers application for the English Conference league turned down as the weren't prepared to do Woking away.

[Alex MacLeod]

I think this is going to result in total turmoil of Scottish football. Rangers did not go through the proper channels available to them but instead chose to take their appeal through the civil courts in total breach of FIFA regulations. Is this nievity on the part of the administrators? I would have thought they and their legal advisors would have looked at the outcomes of such actions before embarking on this appeal in they way they chose. Now the SFA have to address this new breach as well as the original and impose sanctions that FIFA see fit. A ban from the Scottish cup will not suffice.

If the correct actions are not taken then FIFA impose sanctions against the SFA. Sanctions that could have serious repercussions for Rangers allies from the other side of the city. Clubs banned from competing in the european competitions and country banned for next World Cup qualifiers!! Those teams who are in europe are building, at additional cost, for the chance to compete. They could now find themselves in financial difficulty because they have been building based of the monies they would gleen from european games. Celtic now need to think about possible monies gained within the SPL by arguing to keep Rangers in it against the possible monies gained by making it to the CL group stages. Motherwell may not see themselves as possible CL group stage contenders but I'm sure they will be looking at getting past the first qualifying stage and thus earning a decent sum. A sum that would likely be greater than the losses they percieve if Rangers were not in the SPL. Same goes for the Europa league contenders.

All this is going to make for a very interesting SPL meeting today. One where the chairmen must take account of the FIFA threat and bear in mind that GB is not a popular nation within the realms of FIFA after all the recent investigative documentaries trying to undermine Mr Blatter and his regime. The SPL, SFA and, indeed, the SFL must now get together and save this game in Scotland, and have the balls to take the right action to prevent us going down the tubes as the laughing stock of the world. There is more chance of TV pulling out of our game because we are an embarassment than there is of them pulling out because there is no Rangers.

Edited May 30, 2012 by Alex MacLeod

[CaleyD]

There's not a hope that the SPL are going to deliver a decision (one way or the other) whilst there's a chance that the SFA/FIFA will do it for them.

I'm actually surprised todays SPL meeting hasn't been called off already and fully expect another deferment.

The SPL claim there's nothing more they can do to punish Rangers as the 10point penalty is the sanction for going in to administration....however, what about there' options under the charge of bringing the league/game into disrepute? Seems very convenient that nobody at the SPL or any of the member clubs has made mention of that...and that is because, as we all know, they really don't want to get rid of Rangers and are willing to sell their soul, the soul of the clubs they represent and the soul of the game for the scraps from the OF table.

Any inclination I might have had towards accepting a situation which saw Rangers (current or new form) continue in the SPL has now gone and hell mend anyone (SPL Reps, Charimen etc) who tries to argue in favour of such a move.

[Heilandee]

good read.....

http://rangerstaxcas...age-1/#comments

Edited May 30, 2012 by Heilandee

[CaleyD]

Absolutely disgraceful......SPL vote in new rules which give NewCo green light to stay in the SPL - http://www.bbc.co.uk...otball/18263819

Nothing more than a license for SPL clubs to continue what they are doing now (running up debt, then clearing the board via administration)...and the bigger the club the more likely you are to get away with it as a 1/3rd loss of points isn't going to see you relegated.

Sanctions for NewCo's to be decided on a "case by case basis"....unreal!!!

[Heilandee]

Make it up as you go along is now an official policy then?

[+Fraz]

Absolutely disgraceful......SPL vote in new rules which give NewCo green light to stay in the SPL - http://www.bbc.co.uk...otball/18263819

Nothing more than a license for SPL clubs to continue what they are doing now (running up debt, then clearing the board via administration)...and the bigger the club the more likely you are to get away with it as a 1/3rd loss of points isn't going to see you relegated.

Sanctions for NewCo's to be decided on a "case by case basis"....unreal!!!

Case by case....

Which I guess would mean in the case of the OF we will bend over backwards for you and in the case of everyone else we will bend you over.

[dougiedanger]

Best comment I have heard yet on this whole sorry saga. Should be relayed to all club chairmen.

John MacBeath:

''Football would survive without Rangers, maybe not at the same level, and the game would may be lose some fans - but so be it,'' he said.

"If you look after the sport the money will follow you, if you look after the money you'll kill the sport.''

http://www.bbc.co.uk/sport/0/football/18265663