More than just a club – more than just a scandal

FOREWORD: The author would like to thank the author of The Football Tax Havens Blog for the provision of some of the information used in this article.

There is one thing I can say with some certainty regarding the HMRC enquiry into Rangers Football Club and that is that it has left a legacy of confusion, contradiction, misdirection ( some of which may either be deliberate or as a consequence of gross negligence) and of course, last but not least, accusation. The fact that some of the key players involved in the whole process now face criminal prosecution should confirm, for even the casual onlooker, that all has not been above board.
Allow me to illustrate courtesy of these two links, which contain contradictory information, but nonetheless, were written in good faith by the respective authors.

http://sport.stv.tv/blog/203241-rangers-tax-case-and-the-result-of-the-cva-your-questions-answered/

http://www.accountancyage.com/aa/news/2214222/hmrc-rangers-fc-bill-rockets-by-gbp73m

The former link written by Mike Farrell for STV attributes HMRC as the largest single creditor at the time of rejection of the CVA whilst the second link written by Rachael Singh for AccountancyAge suggests at the time HMRC vetoed the proposed the CVA they were in fact the second largest single creditor.

What we do know is that at some point Duff & Phelps added the outstanding potential estimated liability regarding EBT’s to the overall bill due to HMRC. A potential bill which never came to fruition due to the rulings of various Tax Tribunals in favour of Rangers.

What is both concerning and alarming is that such “confusion” appears to extend to high level executives within HMRC itself as this Public Accounts Committee Q & A demonstrates.

http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-accounts-committee/hmrc-standard-report-201314-part-1/oral/11443.html

In question 54/55, tendered by Anne McGuire MP, Mr Jim Harra – Director General Business Tax HMRC, moves to correct Ms McGuire regarding her apparent “misapprehension” by responding as follows:

“It has been in the media. This dispute on employee benefit trusts was not the reason why Rangers went into liquidation. It was for non-payment of their standard pay-as-you-earn and VAT obligations.”

No Mr Harra that is not entirely accurate either. That is the reason that Rangers went into administration. The reason Rangers went into liquidation is because, as either the primary or secondary creditor, HMRC the organisation you represent, vetoed the proposal for a CVA.

It is really asking too much of HMRC officials, particularly high ranking ones to provide accurate information in response to questions from Members of Parliament who sit on a Public Accounts Committee?

Furthermore, just to add some added spice to this bubbling pot of confusion and accusation, the reasons for such refusal are themselves subject to considerable speculation.

http://www.eveningtimes.co.uk/news/questions-over-hmrcs-motivation-170639n.24716091

http://www.heraldscotland.com/news/home-news/liquidation-of-rangers-was-forced-for-tax-probe.24725771

In the questions aforementioned Ms McGuire also raises the subject of pre-litigation settlement.

It is perhaps worth highlighting at this point that Rangers were not the first football club to fall foul of HMRC. In 2005 during Ray Parlour’s divorce proceedings it was revealed that during season 2000/01 Parlour paid tax at a rate of only 22% courtesy of an off shore benefit trust operated by Arsenal. HMRC reacted to this information billing Arsenal for £12 million which they settled in full. While the differing circumstances of each case make a side by side comparison impractical, it does raise the question of why HMRC waited 5 years to pursue Rangers in respect of an EBT payment scheme previously declared in annual accounts)

Returning to the subject of settlement Mr Harra responds:

“In terms of when we decide to litigate, we have a published litigation and settlements strategy that states we will settle only for what we believe we are due under the law. If we believe that we have a greater than evens chance of getting more by litigating than what we can get by settling, generally speaking that is what we will do: we will litigate. We are proud of the success record that we have in litigation. In avoidance cases, we win about 80% of all the cases that we litigate, but that does mean we are not successful in 20% of them. We are disappointed by the upper-tier tribunal decision in the Rangers case. It is still something that can be the subject of appeal, so I cannot go into too much detail about the litigation itself, but, as I said, we have a very good track record and we may not have reached the end of the line on this one.”

Of course such litigation is at public taxpayer’s expense. Perhaps Ms McGuire would care to ask HMRC at the next Q & A why a government agency whose remit is to bring people to account for failing to keep meticulous financial records, cannot themselves keep accurate records with regard to their own operating costs.

http://www.heraldscotland.com/news/home-news/taxman-will-not-reveal-cost-of-rangers-case.26228807

So in summary we have HMRC continuing to pursue Rangers FC (Oldco) at public expense, having refused an offer of an earlier settlement, in the belief they will be “getting more by litigating than we can by settling” despite the fact HMRC themselves forced the company they are pursuing into liquidation. Perhaps Ms McGuire would care to ask what financial settlement HMRC hope to achieve from a liquidated company.

The more you add up the sums the less it makes logical or financial sense, in fact it only serves to add credibility to the accusation that HMRC’s rejection of a CVA was to ensure an investigation into Rangers directors and owners.

If the circumstances aforesaid have caused you to utter the words “scandalous” then you may want to re-think your choice of words.

In the Rangers Tax Case HMRC considered that the appointment of EBT funds on to a sub-fund or sub-trust for the benefit of a particular employee and/or their family gave rise to a PAYE charge.

HMRC were also of the opinion that loans provided from these sub-funds were not loans, but were akin to a bonus available without any chance of repayment and, therefore, again subject to PAYE.

What lifts this above even “scandalous” is such arguments have been challenged unsuccessfully before in the cases of Dextra Accessories ([2005] STC 1111) and Sempra Metals ([2007] STC 1559), yet HMRC continue to put forward this argument, at the tax payers expense of course

Sometimes “scandalous” is just not enough.

Rangers EGM – Our Alamo Awaits

“The dark eleventh hour
Draws on and sees us sold
To every evil power
We fought against of old.
Rebellion, rapine hate
Oppression, wrong and greed
Are loosed to rule our fate”

I don’t think regular readers of this blog would describe me as what the media refer to as a “pop-pom cheerleader” of the various factions vying for control of our club. I’ve never seen the attraction nor sense of writing a blog to further the endeavours of rich businessmen who can afford their own PR machines.

I’ve been highly critical of Dave King’s strategy to gain control of our club, and I stand by such criticism to this day. When I wrote my open letter to him, I envisaged King riding in like the 7th cavalry, scooping up shares to gain control of our club. Thereby uniting a fractured support, and thus enabling us to get behind our club where together we could build a stable future for her. What we got of course was something completely different which has only served to exacerbate such fractures.

Furthermore, contrary to some reports, Mike Ashley is not the devil incarnate. He is a powerful, ruthless and opportunistic businessman who appears to maximise to his full potential, the misfortune and weakness of others. Sentiment does not appear to come into it – just ask the employees of USC.

http://www.independent.co.uk/news/business/analysis-and-features/mike-ashley-wields-his-iron-fist-once-more-at-usc-9994171.html

Alarmingly, our football club appears to be the latest victim of Mr Ashley’s growing business empire and he has been assisted in this to the full by a thoroughly incompetent, self-serving and shambolic Rangers board. Having comprehensively failed to balance the housekeeping budget they have then compounded the problem by rejecting all offers of outside investment thus leaving our club on the equivalent of a life support machine – relying on short term cash infusions where only the good grace and will of the donors prevented us from going under, as this shambles of a board failed to meet the repayments within the agreed time period.

While the Man who would be King issued sound bite statements to the press, Ashley continued to increase his powerbase within our club, but of course every power grab carried a considerable financial caveat. Our retail, our historical assets, even our very trademark were considered fair game. Where there were dissenting voices within our boardroom, people who dared to highlight that such deals were not in the best interests of our club – Ashley eradicated them. Messrs Wallace, Nash & Crighton – RIP.

A number of leaked e-mails demonstrated that the remnants of the Rangers board appeared to be more concerned about preserving their places on the board rather than pursuing the best financial deal for the club.

http://www.telegraph.co.uk/sport/football/teams/rangers/11247379/Sandy-Easdales-true-role-in-Rangers-takeover-talks-thrown-into-question-by-release-of-emails.html

Further confirmation of this was provided courtesy of Colin Kingsnorth of Laxey, who clearly felt it was appropriate to call time on this acquiescing of power to the Ashley Empire.

http://www1.skysports.com/football/news/11788/9626770/scottish-championship-laxey-partners-sell-rangers-shares

The consequence of course, is that we now have a Rangers board dominated by Ashley men. These are the same men who control the destiny of our retail, our historical assets (with the exception of Ibrox – for now) our very trademark. I will ask you a simple question.

When it comes to a crucial vote in our boardroom whose interests will these men move to protect – Rangers or Sports Direct?

The situation is beyond dire but it is still salvageable. Dave King has called for an EGM which will present us with the opportunity to replace the current board. I’m not being melodramatic when I say the destiny and future of our club is in the hand of shareholders.

Furthermore I will not mislead you. I’m convinced Dave King does not have the financial muscle which the Ashley Empire has at its disposal. If we vote to remove the current board and replace it with a Dave King one, I believe our club will be on its knees for a longer period.

But I’d much rather be on my knees under my own strength, striving and aspiring to restore this club to its former glory with every part of the body working together to achieve that aim, than be on my knees bended in servitude and reliant on the quick fix solutions of others at a cost which threaten to take away my very soul, my very heritage and my identity,

What answer from the North?

A resounding “Thanks, but No thanks Mr Ashley”

Crossing the Rubicon

I was unfortunate enough to have to chair a “debate” on my twitter timeline this weekend as two polarised views clashed on my timeline in response to one of my tweets. On one side we had someone who wished to lay the blame for the injuries sustained by our Ibrox employees squarely with the SOS, whilst the other expressed a desire to see a “more aggressive approach” to the nature of fans protests. Throughout the course of what was an unpleasant exchange between the two of them, it emerged that the proponent of the “more aggressive approach” was not a member of the UOF or SOS whilst the other was apportioning blame based solely on unconfirmed reports he had heard.

It was a discussion which has been very much mirrored on Rangers message boards over the weekend. Some clearly saw Friday night’s events as an opportunity to tarnish the fans groups whilst others appear unwilling to accept that the behaviour of Rangers led to the injuries of the two elderly Rangers employees. Considering the incident which led to the injuries occurred both after and away from the location of the organised protest it seems unreasonable to link the unsavoury incident to the main protest where thousands of bears demonstrated in an emotional, exuberant yet exemplary peaceful manner.

Those who maintain they saw no violence or assaults at the latter incident, may well be correct, but you cannot ignore the fact that as a consequence of whatever happened at Argyle House two elderly Rangers employees, George and Liz sustained injures. And that is not, and never will be, acceptable.

I’m sure all of us in the Rangers support would wish them both a speedy recovery.

I’ve been harping on for months now, almost like some PC Brigade acolyte, about some of the unhelpful derogatory and inflammatory language being used. If we claim as a support that such language dehumanises our support when it is directed against us, does the same argument not work the other way ? Or would anyone care to argue that terms such as “rats” is neither derogatory nor dehumanising ?

What is clear from Friday is that those wishing to exercise their right to peaceful protest now goes way beyond the ranks of members of the UOF and SOS. This places an added responsibility on protest organisers to ensure that all participants are clear about both the nature and aims of such protest. The briefing message needs to be clear, consistent and unequivocal that all such demonstrations against the board are to be peaceful in nature.

I am also firmly of the opinion that a “more aggressive approach” will be self-defeating. Our board are worthy of utter contempt for their actions, but that does not in any way, shape or form justify violence or threats of violence towards them. Supporters protesting in a peaceful and responsible manner against avarice, broken assurances and opportunistic businessmen playing Russian roulette with our club will capture the imagination – behaving in a manner befitting thugs wont. Furthermore it will turn away many bears who will just not entertain such behaviour.

Protesting and demonstrating is one of the few immediate options available to us as a fan base, it is imperative we use it responsibly and do nothing which usurps either its effectiveness or ability to unite our fan base behind a common cause.

The proposal which sees Ibrox being used as security against loan is very much a crossing of the Rubicon for the Ibrox support, and has galvanised and unified us as a fan base. Let’s not cross our own Rubicon in the way we protest against it.

The Betrayal

There will some of you reading this who, like me, are old enough to remember the Ibrox Disaster and the aftermath. They were indeed the darkest of times, and words cannot adequately convey what it was like to live through it. I can’t begin to imagine what it was like for those who lost loved ones, but I know how bad it was for those of us who knew some of those who perished.

As a support we needed hope and Willie Waddell gave us that. He spoke of building a stadium which would stand as a testament, a memorial to those who perished that day – and he delivered. The wonderful stadium we have today is that legacy from yesteryear. I’m sure I’m not alone amongst our support who recognise our modern day Ibrox, not just as a stadium but a living memorial, a tribute to those who perished.

Ibrox is not just a stadium, it is a beacon of hope, of remembrance, of inspiration to every one of us who cast a favourable eye towards her.

Quite simply she is beyond price.

Even during the aftermath of Whyte, the fact we had a stadium and a support like ours filled me with hope and optimism for the future, even during the blackest of news days, and of course, there were many of them.

I could witter on all day about broken promises, broken assurances and cite examples, but what would be the point?

If men cannot understand the significance of their actions today, or what Ibrox means to us, the fans, then I doubt they will lose much sleep over their broken promises. As I’ve warned for some time, those currently at the helm of our club are not fit for purpose. Furthermore they clearly know nothing about our club, nor care for our traditions, our values or our history.

As a beacon which has served this support for generations is dimmed by the actions of imposters, perhaps it will prove to be the spark which brings unity and a unified sense of purpose to those who truly care about our club.

“The light shines in the darkness, and the darkness can never extinguish it.”

20 million reasons for a public enquiry

It’s good to see that HMRC’s latest failing – being unable to furnish costs of their continual and apparently relentless pursuit of Rangers over EBT’s – has galvanised the Rangers support into a long overdue unified sense of purpose. After a period of unhelpful adjectives and metaphors, which military men would aptly describe as “blue on blue”, we are at long last reminding ourselves where the real enemies of our club are, and it’s certainly not from within.

It is not surprising that HMRC’s latest hypocritical incompetency, and I use that term deliberately in view of the fact we are talking about an investigative government agency who hold both private individuals and companies accountable for failing to keep meticulous financial records, has given rise amongst some of our fans to suggestions of a grandiose conspiracy. I don’t subscribe to such a conspiracy theory, and those who read this blog regularly will know that as far as I’m concerned “Evidence is king”. There appears to be little or no evidence available at this time to suggest any high level conspiracy, instead I will in the course of this article offer you an alternative evidence based theory to explain why HMRC’s pursuit of our club has all the characteristics of a witch hunt.

Before dismissing such a conspiracy theory completely however it is worthwhile pointing out that the South African Tax Authorities have recently discovered what has been described as a rogue unit working within their organisation. Furthermore much closer to home, the families of the Hillsborough victims had to suffer considerable ridicule for suggesting that the Police were involved in some kind of conspiratorial cover up over events that tragic day. Several years later the 160 odd altered Police Statements and deliberate, false and malicious briefing of the press by the Police, are now a matter of public record and the subject of an ongoing enquiry. Therefore despite the absence of evidence of conspiracy perhaps the best course available to us is to at least keep an open mind whilst concentrating on the evidence which is available to us.

Discounting such a conspiracy theory does not however also discount the ruthless nature of this enquiry, nor the attempts by HMRC to deliberately mislead the Rangers support during the course of it. It would come as no surprise to any of us if, in the near future evidence was uncovered which demonstrates HMRC have acted in both an unscrupulous, unprofessional and unedifying manner throughout the course of this enquiry. After all, it wouldn’t be the first time.

http://blogs.telegraph.co.uk/finance/ianmcowie/100014676/2000-tax-dodgers-confess-but-should-hmrc-have-paid-for-stolen-information/

Some will note the particular irony of HMRC paying for stolen evidence, given the fact a considerable amount of evidence in the Rangers Tax Tribunal, ended up in the possession of BBC Scotland journalists and proved to be the catalyst to “The men who sold the jerseys” documentary.

However the Redknapp case was not the only one which had brought the professionalism and competency of HMRC under a very public spotlight, leaving it’s investigators with red faces and questions being asked.

https://www.accountancylive.com/cassidy-hmrc-should-eat-humble-pie-over-montpelier-case

I doubt there is a Rangers fan out there who doesn’t feel a sense of the tunnel vision Mr Cassidy alludes to during the Montpelier case. It appears history may well be repeating itself as HMRC continue to pursue Rangers despite a number of failed appeals chaired by some of the most qualified tax experts in the country.

These spectacular high profile failings and questions of competency, integrity and professionalism served to bring HMRC very much under an intense spotlight, most notably by the public accounts committee.

http://www.theguardian.com/politics/2013/oct/28/hmrc-chiefs-mps-lost-tax

http://economia.icaew.com/news/november-2014/pac-slams-hmrcs-anti-tax-avoidance-strategy

So we have a government investigative agency, with a spectacular series of high profile failures, even despite indulging in some fairly unscrupulous means of obtaining evidence which in itself calls into question the very integrity of the organisation itself, under considerable pressure to re-dress their very public humiliation in a series of failed prosecutions.
It certainly puts into some kind of perspective the relentless and ruthless nature of HMRC’s pursuit of Rangers. Quite simply after so many failings they simply had to get a result.

But if HMRC were in a bit of a hole prior to and during the investigation, rather than stop digging as the age old saying goes, they appear to have taken the equivalent of a JCB to the situation.

Apologies for the following paragraph in advance, as it deals mainly in conjecture rather than facts, but it is worth mentioning all the same. Despite HMRC’s claim to be unable to furnish the cost of the Rangers Tax Case, rumours abound of figures at or around the £10 million mark. Furthermore it is common knowledge that Sir David Murray attempted to settle with HMRC over EBT’s offering anything between 10-12 million pounds. Even taking the lower settlement figure HMRC are now looking not only at £10 million lost revenue, but also perhaps £10 million costs for pursuing a case against a company from whom they will be unable to recoup anything even if they were to eventually be successful in a forthcoming appeal. One wonders what the Public Accounts Committee will make of all this.

Moving on from public accounts to public accountability and the HMRC JCB appears to have been working in overdrive to dig a bigger hole for themselves.

http://www.dailyrecord.co.uk/sport/football/football-news/ex-rangers-owner-craig-whyte-being-3992415

Perhaps HMRC would care to explain to Rangers shareholders, and any other interested parties for that matter, why they allowed Craig Whyte, who they were already pursuing for a sum of £3.7 million and whom they had threatened with bankruptcy as a result of failed tax returns, to take control of an organisation and run it into the ground by failing to make PAYE payments for nearly 9 months. If you cannot hear the alarm bells by now, then you either are deaf or have your fingers, quite firmly, in your ears.

HMRC’s JCB next wrong turn was in the form of a generic reply via correspondence. As thousands of Rangers supporters and shareholders wrote to complain about confidential tax documents and other paperwork appearing in the public domain, HMRC responded by asserting it did not comment or respond to speculation about alleged breaches of confidentiality.
“Speculation”? “Alleged”? The subject of those complaints were The Rangers Tax Case Blog and the BBC Documentary “The men who sold the jerseys” both of which went onto win national awards, with the latter being broadcast on national television.

Journalist Tom English described the Rangers Tax Case Blog as follows:

“If you wanted to know the latest news on their tax travails, rangerstaxcase was a place you went because, unlike newspapers or radio stations, rangerstaxcase was connected to the heart of the FTT and everybody knew it.
It had documents and detail that were beyond dispute. When illustrating one point it was making it would summon up information that could only have come from somebody within, or very close to, the tribunal”

(The Scotsman 25.11.2012)

Why have HMRC deliberately prevaricated and failed to respond to this clear breach of confidential information. How can they justify describing a national television broadcast and an award winning blog, whose plaudits and awards are based around the revealing of confidential information, as mere “speculation”? As others outside the Rangers community have since commented both these outlets of confidential information presented it such a way as to infer the guilt of Rangers FC. Was the same unscrupulous culture within HMRC which saw them buy stolen property in the Redknapp case alive and kicking also in the Rangers Tax Case – a kind of win at all costs mentality?

Whilst the source and nature of those confidential leaks has been subject to many theories and discussions, confirmation about one of the sources was provided courtesy of Lord Nimmo Smith, in his SPL Independent Commission Report.

“Meanwhile, BBC Scotland came, by unknown means, into possession of what they described as “dozens of secret emails, letters and documents”, which we understand were the productions before the Tax Tribunal. These formed the basis of a programme entitled “Rangers – The Men Who Sold the Jerseys”, which was broadcast on 23 May 2012. BBC Scotland also published copious material on its website. The published material included a table containing the names of Rangers players, coaches and staff who were beneficiaries of the MGMRT, and how much they received through that trust.”

(Section 98)

Perhaps not so much a case of “Who sold the jerseys” but more of a case of Who sold the evidence?
That is of course the evidence, or as Lord Nimmo Smith terms “productions”, which was seized by HMRC during the course of their investigation into Rangers and which was presented before the Tax Tribunal.

The question is why the removal of this evidence and its subsequent use in the BBC Scotland documentary aforementioned, was not the subject of a Police enquiry until after the verdict of the tax tribunal, when complaints by both Sir David Murray and myself saw the launching of a criminal enquiry.

It raises serious questions about the safe handling and storing of productions, as well as duties and responsibilities of investigative agencies with regard to the loss or theft of productions. In particular it raises questions about how and why Lord Nimmo Smith was able to arrive at such a conclusions with regard to the source of the material which BBC Scotland subsequently came into possession of.

http://www.v3.co.uk/v3-uk/news/1996757/cameron-promises-transparent-government

It’s time for you to deliver Mr Cameron and the Rangers support will not rest until you do. We want a full government enquiry into this whole process and we will not rest until we get it.

We will play to win – and win at all costs

Experienced Horticulturist Required : Apply within

It was to become the stuff of legend, the type of story normally reserved for a Roy of the Rovers comic book sketch. Ranger’s manager Willie Waddell was to take the ultimate gamble, replacing his injured and iconic inspirational captain, John Greig, with a raw 16 year old youngster who had made his professional debut only weeks earlier against Cowdenbeath. It was a particularly brave decision given the setting was the 1970 Scottish League Cup Final and Rangers opponents were arch rivals, Celtic. 90 minutes later the manager’s decision was to be completely vindicated as the 16 year old Derek Johnstone scored the only goal of the game, sending the light blue legions amongst the 106,000 crowd into rapture and thus heralding the end of a 4 year trophy drought.

Who would argue that fortune does indeed favour the brave?

Today’s Rangers fans yearn for that kind of bravery amongst our current management. The highly publicised departure of young starlet Charlie Telfer and his criticism of the lack of opportunity for youngsters at Ibrox should set alarm bells ringing. Sour grapes or valid criticism?

Well despite League One being done and dusted early doors, Telfer only featured once, coming on as a substitute in the 4-0 defeat of Stenhousemuir. Was completing a season undefeated in a lower league really more important than the continual development of our youngsters? Alarmingly, the Telfer story is not an isolated one.

Last year, centre half Stuart Urquhart, a captain of the Scotland Under 17 side, having held his own at Dumbarton whilst on loan (2 divisions above Rangers at the time) chose to depart the club despite not having any clear destination. His subsequent snapping up by Steven Pressley at Coventry City, himself a product of the Rangers youth system, adds a touch of irony to a fast developing farce.

That orchestra of irony reached a crescendo this week with the departure of Lewis Macleod, one of our few “blooded youngsters,” in order to keep our club afloat.

Those of us at Ibrox yesterday, watching the toiling of Lee McCulloch, were left to wonder if a nurtured and blooded Gasparotto, may well have spared some of the raised blood pressure caused by the inadequacy of our failing captain. The same could be said of Sinnamon as an alternative to Foster or McKay instead of Smith.

In an age of “gardening leave” it’s clear our club is in dire need of a bold, green fingered horticulturist with a proven aptitude for the development of young seedlings.