A letter from an HMRC official has spelled out the realities of the liquidation of Rangers and the on-going big tax case.
While the SFA, BBC and others attempt to whitewash the shameful final years of the old club allowing the easily led to latch onto a grand conspiracy theory the reality is somewhat different.
Rangers (IL) owed HMRC around £6m from the Discount Option Scheme, initiated by Campbell Ogilvie, when they were sold to Craig Whyte for £1 and given an SFA licence to compete in the 2011/12 Champions League qualifiers.
While owning HMRC that money the club signed Lee Wallace, Juan Ortiz, Gorin Doian and others in an attempt to beat Malmo to reach the lucrative group stages of the Champions League. New contracts were given to Allan McGregor, Steve Davis and Steven Whittaker.
For whatever reason Rangers decided not to pay National Insurance and Income Tax during the 2011/12 year. For reasons unknown Her Majesties Revenue and Custom Service allowed this to continue for several months before applying to bring in their own administrators but the club succeeded in appointing Duff & Phelps ten months into the tax year.
Separate to that HMRC are patiently going through the local stages of the appeal process before the big tax case gets out of Scotland to be heard at the House of Lords, they know that a verdict in their favour will never be delivered within 100 miles of the Edinburgh establishment that propped up the massive debts of the Murray Group with Rangers the flagship organisation.
Amid the spin that has allowed Ally McCoist, Dave Murray and others to criticise HMRC without any sort of balance, or base in reality, fans of the Ibrox club have been led to believe that their club has been the victim of a witch hunt.
Various blogs and messageboards have fueled the delusions of supporters who looked for sugar daddies as their club imploded prompting different campaigns including letters and emails to politicians about the great crime committed against their club.
Setting the record straight, from the relative safety and sanity of Nottingham, one official of HMRC has delivered some home truths to the deluded.
Signing off a letter the official states: “I think it would also be helpful to clarify that the recent tax case is categorically not the reason why the club was put into liquidation.
“It is a matter of public record that Rangers was placed in administration by its principal shareholder and director because it was unable to pay its creditors, including HMRC. At the time of liquidation, published court papers showed that the undisputed tax that was owed by the company was approximately £21 million.
“This is an entirely separate issue from the amount in dispute due to the former owner of the club’s use of the EBT scheme.
“You mentioned concerns that confidential information was leaked about the case. These matters were investigated by the Police Service of Scotland in conjunction with HMRC and the Police Force West of Scotland. No evidence was found that there was any leak of information from HMRC.”
Earlier on the official had explained why their persistence wasn’t part of some grand conspiracy against the club that went into liquidation two years ago.
The letter stated: “We are committed to tacking tax avoidance wherever we see it, investigating and closing down schemes that we believe do not work. Tax avoidance is about bending the tax rules to gain an advantage never intended by Parliament.
“Avoidance often involves contrived, artificial transactions that serve little or no purpose other than to reduce the amount of tax someone pays. Those who use avoidance schemes put additional burdens on the vast majority who pay the right amount of tax. We have been consistent in our approach to dealing with EBT schemes, and have not singled out Rangers.
“If avoidance scheme users refuse to accept our position that their scheme does not work and take the case to litigation, we will continue to challenge them. We are very successful in tackling avoidance cases litigated by taxpayers, winning around 80% of cases in the tribunal and courts. In 2013-14 alone our 30 wins protected around £2.7 billion of tax.”
One letter is unlikely to change the mindset of those that promote the idea of a witch hunt, a grand conspiracy while they soak up stories about a ‘liquidation crisis’ and tales of relegation/demotion to sooth their pain.
With the new club following the same path as the old club, without the backing of the old Edinburgh financial network it seems highly unlikely that the sympathy shown by the government authorities to Rangers will be repeated for Sevco as they race towards oblivion.
Turning a blind eye to a phoenix Sevco club won’t be an option.
According to the BBC Alex McLeish, Barry Ferguson, Graeme Souness, Stefan Klos, Alex Rae, Neil McCann, Andrew Dickson (Sevco’s head of football administration), Billy Dodds, Campbell Ogilvie, Dick Advocaat, Fernando Ricksen, George Adams, John Greig, John McClelland, Kris Boyd, Mikel Arteta, Nacho Novo, Paul le Guen, Martin Bain, Ronald de Boer, Steven Smith, Steve Davis and others all benefited from EBT’s.
The SFA have never taken any action against the Discount Option Scheme operated from 1999-2003 which resulted in a £6m tax bill from payments to three players that weren’t disclosed to HMRC or the SFA.