Rangers tax case: HMRC refute claims it miscalculated Scottish club’s tax demand and caused collapse of club

15 Nov

The tax authority has staunchly denied claims that it miscalculated a demand which was a major contributing factor in the financial collapse of Rangers back in 2012.

A report in The Times on Thursday suggested the Scottish Premiership giants were overcharged to the tune of £50million by HM Revenue and Customs over their use of an Employee Benefit Trust (EBT) between 2001 and 2010.

Former Rangers owner Craig Whye and ex-chief executive Charles Green arrested
Craig Whyte had a controversial spell as owner of Rangers
getty images

It was claimed the ‘multi-million pound blunder’ was to blame for Rangers being consigned to liquidation in June 2012, which saw the club officially fold and relaunch in the fourth tier.

That left Rangers fans and former players outraged, with Ally McCoist describing the alleged mistake as “completely and utterly unacceptable”.

However, HMRC have denied any wrongdoing on their part, with a statement from their press office reading: “As widely reported today and to clarify: HMRC won against Rangers’ tax avoidance in the Supreme Court, and did not miscalculate anything.”

The report stemmed from a June audit by liquidators BDO, who wiped £26million off the amount claimed by HMRC after challenging the imposition of a £24m penalty for the use of an EBT scheme through which the club paid wages and bonuses which were disguised as loans.

The reduction left the total outstanding to HMRC as £68m and there were claims on Thursday that the figure could drop by a total of £50m.

This led to former Rangers chairman John McLelland arguing there would have been more potential buyers for the club had demands been reduced at the time.

With the EBT case hanging over the club, Rangers were sold to Craig Whyte for £1 in May 2011 on the understanding he paid off their £18million bank debt and another tax bill of less than £3m.

He mortgaged season ticket sales to pay the bank and the club went into administration in February 2012 over a separate tax debt relating to unpaid PAYE and national insurance.

Rangers legend Ally McCoist outraged by ‘completely and utterly unacceptable’ reported tax blunder blamed for financial collapse of Scottish club

HMRC went on to win a legal challenge against the liquidated Rangers (now called RFC 2012 plc) over their use of EBTs, a test case which has allowed it to issue demands over the use of many other similar schemes.

The tax authority would have had to instigate fresh legal action to enforce the £24m penalties, but with little money in the pot for creditors, it did not challenge BDO’s assertion.

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