Rangers administration: Signs that HMRC may be prepared to strike deal

THERE are conflicting views on the mindset of HMRC and what they are really thinking about Rangers and their strategy should the ‘big tax case’ be resolved in HMRC’s favour.

One school of thought is that HMRC will go after Rangers like rabid dogs, seeking to make an example of them. If the bill for their use of Employee Benefit Trusts (EBTs) comes in anywhere close to the £49 million that has been widely reported then the argument goes that HMRC will hammer the tax-dodging football club, thereby giving them only one option – the death knell of liquidation.

That’s an assessment that the Rangers administrators entirely disagree with. They said yesterday that such an analysis flies in the face of all the conversations they have had with HMRC – three or four meetings since the club went into administration and more than a handful of phone calls. The parties spoke on two occasions last week.

Paul Clark, of Duff & Phelps, pictured right, has said that potential bill to HMRC is not a major factor in the sale of the club. Nor does he believe that there is any great animosity towards Rangers on the part of HMRC. Or, at least, a Rangers where Craig Whyte plays no future part. “The reason is whatever the size of the debt, it just dilutes the amount that is available to the creditors. HMRC are not saying, ‘We’re going to be difficult, we’re going to destroy value’. Why would they? It’s not in their interests or the taxpayers’ interests. I haven’t seen or heard that HMRC have said that RFC should cease to operate. That has never been said.

“We had two meetings with them this week. They have never, ever, suggested that they are going to be belligerent. They are concerned at the manner in which the football club was run most recently. Make no mistake, they are not at all happy with the conduct of the people who have run Rangers, particularly over the last few months.

“But once we know who the main party is to take over the club we can have a three-way negotiation between the creditors, the prospective owner and the administrators and work out what could happen. Do HMRC, being the most significant creditor, get cash on completion of the takeover or payment over a period of time? We already know that HMRC are owed in the region of £15m but of course it could be a lot more than that.”

A settle-ment up front and/or an on-going payment moving forward is the likely outcome should the big tax bill hit, says Clark. The Armageddon option is not one he believes HMRC are considering.