Multi-million tax blunder blamed for Rangers’ downfall

Up to £50m could now be wiped off the tax bill owed by the club's old operating company.

Ibrox: Up to £50m could now be wiped off the tax bill owed by the club's old operating company. <strong>SNS</strong>
Ibrox: Up to £50m could now be wiped off the tax bill owed by the club's old operating company. SNS

Rangers Football Club’s collapse has been blamed on a multi-million-pound blunder by the tax authorities.

The taxman originally claimed the club’s old operating company owed around £70m for using controversial offshore trusts known as EBTs to pay players and staff.

But up to £50m could now be wiped off the tax bill after HM Revenue & Customs (HMRC) reportedly admitted over-estimating its debt and penalties.

According to The Times, the outstanding bill for misusing an offshore trust to pay Rangers players and staff between 2001-2010 is likely to stand at the far more affordable rate of £20m.

ADVERT

Former Rangers chairman John McClelland believes that would have made the club more attractive to potential buyers before it collapsed in 2012.

It was eventually sold to Craig Whyte for £1 and his regime took the club into administration under what is known as the ‘wee tax case’ for failing to pay national insurance.

Mr McClelland said ambiguity over the EBT burden – which reports had suggested would top £90m – had repelled genuine investors and paved the way for Rangers’ collapse under Whyte.

He said if a £20m tax bill had been agreed during his tenure it would have been relatively simple for the Glasgow club to find credible buyer.

ADVERT

Speaking to The Times, Mr McClelland said: “At the time of the sale of the club in 2011 had the tax claim been at the level now being reported then, in my opinion, the outcome would have been different.

“I believe there would certainly have been a much higher level of interest in acquiring it and therefore more potential buyers.”

An HMRC spokesman said: “We don’t comment on identifiable businesses. HMRC has always been clear that disguised remuneration is a form of tax avoidance.”


You're up to date

You've read today's top stories. Where would you like to go next?