Written by: Keith Tully
Published: 13th November 2019
According to reports from the Times newspaper, the football club was overcharged by as much as £50 million by HMRC and that amount could be wiped off the tax bill of its old operators.
Rangers has long been a powerhouse of Scottish football but suffered a devastating financial crisis in 2012 after it was accused by HMRC of using tax avoidance schemes, referred to as employee benefit trusts (EBTs), to pay its players.
Those issues saw the club left with a tax bill worth around £70 million, which sources have now told the Times should have been closer to £20 million.
According to ex-Rangers chairman John McClelland, it would have been much easier for the club to attract investors during his tenure if its outstanding tax bill was £50 million lower than it actually was at the time.
Indeed, Mr McClelland has indicated that he believes it would have been relatively straightforward to find a credible buyer for the club while it was in administration.
Rangers entered administration in 2012 fundamentally because it was unable to pay its tax bill and HMRC, as the club’s largest creditor, subsequently voted against a rescue proposal, which then led to its operating company entering liquidation and its assets being sold to a newly created entity.
Several factors are reported to have led HMRC to accept that its tax bill in the case should have been much lower than initially stated for what is now referred to as ‘oldco’, meaning the company that operated Rangers prior to its liquidation.
A £24 million penalty charge is said to have been wiped completely by HMRC in response to challenges made against it.
Meanwhile, it’s understood that liabilities relating to EBTs were being pursued on the basis of gross figures rather than with regard to actual tax amounts due, which further reduces the figure ‘oldco’ is actually liable for.
None of these issues will impact the current operators of Rangers, who function as a company called Rangers International Football Club.
After its collapse and entry into liquidation, the newly established Rangers Football Club and its team were placed in the fourth tier of the Scottish Football League for the start of the 2012/13 season.
The club has since risen back through the leagues to the top tier of Scottish football, where it competes again with its great cross-city rivals at Celtic FC.