Tax fears leave Rangers 10 days from meltdown

Imminent administration and collapse stalks one of Britain's biggest clubs. Robin Scott-Elliot asks how and why

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The Independent Online

The future of Rangers, the Scottish Premier League champions, was thrown into deep uncertainty yesterday when the club gave notice of their intent to go into administration. Such a move, which Rangers have 10 days to confirm, would incur an immediate 10-point penalty and hand the title to Celtic, who currently lead the SPL by four points.

Last night Craig Whyte, the Glasgow club's owner, insisted it was the only option. With the verdict of a tax tribunal on a £49m bill imminent, the move did not come as a surprise but it still sent shockwaves through the Scottish game.

Rangers lodged legal papers with the Court of Session in Edinburgh at lunchtime. The club expect to take 10 "working days" before deciding whether to appoint an administrator. That gives Whyte, who significantly is the club's largest secured creditor, a window in which to negotiate with HMRC, who would be the biggest loser were the club to collapse.

Whyte said: "Decisions have to be taken to safeguard the long-term survival and prosperity of the club. The harsh reality is that this moment has been a long time coming and its roots lie in decisions taken many years ago. If we do not take action now the consequences and the risks to the club are too great. In addition to the HMRC issues, it has been abundantly clear to me the club faces serious structural and financial issues.

"There is no realistic or practical alternative to our approach as HMRC has made it plain that, should we be successful in the tax tribunal decision, they will 'appeal, appeal and appeal again'. This would leave the club facing years of uncertainty."

What next? The SPL has confirmed a 10-point penalty and a transfer embargo would be imposed if Rangers go into administration.

How has it come to this? With average home gates of nearly 46,000, three successive titles and European football, there ought to be optimism. But Whyte says it costs £45m a year to run a club that brings in £35m in revenue. The tax issue is separate from the day-to-day financial troubles: the case stems from a decision by the club's previous regime – Whyte bought Rangers last year for £1 and took on £18m of debt – to use employee benefits trusts (EBTs) to pay some of its employees, including players. The Revenue insists that PAYE tax and National Insurance contributions are due, some £49m.

A tribunal into this claim has sat and is due to give its decision by the end of the month. Ten working days, then, to ... the workhouse?