February 5 – Rangers chief executive Charles Green (pictured) has reacted angrily to the UK tax authorities reopening its case against the club and lodging an appeal against the verdict of the First Tier Tax Tribunal that had ruled in favour of the Scottish club.
“What the appeal does do, however, is cast a cloud of uncertainty and confusion over a situation that has already been ruled on and has taken a number of years to investigate,” said Green.
“The ruling of the First Tier Tax Tribunal does not affect the operations and the financial position of the Club as it stands today and the appeal will have no affect on us as this is an historic case for The Rangers Football Club plc (‘oldco’).
Rangers were forced into administration by HMRC (the UK tax authorities) in February 2012, over non-payment of tax totalling about £14m.
HMRC subsequently rejected proposals for a creditors agreement that would have prevented Rangers from going into liquidation. The clubs assets were then sold by administrators to a consortium led by Charles Green for £5.5m.
Rangers, having finished runners-up in the Premier League last season, were then forced to start life again in the Scottish Third Division under league rules regarding club insolvency.
“As HMRC stated last June when they decided to vote against the proposed ‘oldco’ CVA, no tax liabilities relating to ‘oldco’ would transfer across to the new company. HMRC have also reaffirmed this position to the Club’s tax advisers, Deloitte,” said Green.
“There is no money to be gained by HMRC as the old company has been liquidated so you have to ask why they are pursuing the matter further when the original EBT enquiry took years to reach a conclusion?
“I have written in the strongest possible terms to HMRC pointing out the futility of such an appeal.”
The tax authorities clearly feel differently and HMRC said it had been granted leave to appeal against the FTT decision and that the appeal had subsequently been filed.
The initial dispute arose over HMRC’s claim that and Employee Benefit Trust, which was used from 2001 to 2010 to make £47.65m in payments to players and staff in the form of tax-free loans, was illegal and that £14m of tax was due.
Rangers disputed this and a First Tier Tax Tribunal (FTT) ruled there was no breach of the law. The case will now be heard at an Upper Tier Tax Tribunal (UTT). If the dispute is not settled at the UTT, it is possible that it may go all the way to the Supreme Court – a process that could take years.
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