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Rangers tax case - Scottish football to self-harm again?


It’s not been a good few days for Rangers fans. Firstly, despite a reasonable performance in a match we should have won at Easter Road, Hibs cut our lead at the top of the Championship table and are proving themselves genuine title contenders. Next, our accounts to June 2015 were released and, while the current regime were right to highlight the negative effect of previous unreliable boards, the financials show a long, hard road ahead for the club. Finally, on the same day, an appeal by Her Majesty’s Revenue and Customs with regard to tax schemes put in place by former owner Sir David Murray was approved by the Court of Session, with the outcome being the initial PAYE and NI claims by HMRC from the period in question are again valid. Only a further appeal by the oldco administrators BDO to the Supreme Court will result in the continuation of the case. As it stands, despite ‘losing’ the first two legal debates, HMRC have prevailed in the five-year long investigation.

We now find ourselves with two distinct viewpoints. Some fans rightly feel aggrieved that the initial tribunal decisions have been overturned and are eager for BDO (and/or a third party involved with them) to appeal. Conversely, other supporters feel the time is now right to move on - with the juxtaposition of the annual accounts emphasising we need to remove any excess baggage. There appears merit in both arguments but what are the pros and cons of each?

Taking on the appeal certainly seems beneficial for the oldco administrators and, indeed, some creditors of the oldco. Although the liquidation of the oldco is ongoing along with various other relevant court cases, the most recent BDO report suggested a payment of 7.5p in the £ for unsecured creditors. Yesterday’s Court of Session decision will have a material impact on any such dividend – evidently the main reason BDO remain the only party contesting the case given they believe their claim is robust. Their previous comments have inferred minimal costs in this regard with the expenses being funded by an unknown ‘third party’. Given the Court of Session also reserved the question of such expenses then it may be more of a surprise if BDO don’t appeal further. Add in the unusual ‘common sense’ wording of the judgment and some experts suggesting the EBT ruling remains open to interpretation then various proclamations about Rangers ‘cheating’ their way to success may well be premature.

Indeed, this is where the situation becomes somewhat malignant. Although Rangers themselves have clearly stated they consider the newco unaffected by any liability and believe the club itself is free from any challenges on its previous successes, already the agitation for penalising the club after the fact for the use of these schemes has become clear. According to some media reports, the SPFL may consider themselves currently powerless to retrospectively punish Rangers and certainly the independent commission chaired by Lord Nimmo Smith absolved the club of any sporting advantage in his 2013 report. Unfortunately, I doubt this will satisfy the more obsessed of Rangers’ many critics. The calls for a new commission on a supplementary point of their preference may be considered vexatious but Stewart Regan and Neil Doncaster are hardly considered administrative gladiators by their peers in Scottish football. Will our club and its fans ever be allowed to move on past the indiscretions of its more recent custodians?

With that in mind, as suggested earlier, perhaps the best way to do so is to accept the decision of Lord Carloway et al as the damage has been done anyway? Yes, many other football clubs used similar schemes and Rangers were not allowed to settle as they had done but, lawful or not, these risky schemes have cost our football club an incredible amount – even if HMRC may not recoup much money from the oldco. After all we’re still recovering from what appear to be various criminal frauds perpetuated on the club and its reputation has been tarnished forever. There is also no doubt the EBT effect contributed to the sale of the oldco to Craig Whyte and the subsequent financial problems. Was Sir David Murray too clever for his own good? Possibly but he has also paid for this apparent greed – even if his comfortable lifestyle may be unaffected in the same way an ordinary (and genuine) Rangers fan has been. Murray may well claim he was duped by Whyte, however his legacy isn’t that of achieving 9IAR or reaching the UEFA Cup final but instead of contributing to the financial and reputational ruin of both Rangers and his other businesses. One can only guess at the guilt he feels.

However, it’s difficult to keep expending energy on looking for someone to blame. What happened at Rangers happened and the only positive aspect of this is that we survived. For some that’s the opposite of what they want but our club remains and efforts to rebuild it seem to be gathering pace. Almost 35,000 season tickets have been sold for this season while average crowds are also up by around 12,000 people. We are top of a very competitive Scottish Championship and the football being played is as good as many fans can remember. Behind the scenes, various staff appointments are encouraging and the club/fan relationship gradually improving. Outside of the legal battles with Mike Ashley, there is much to be positive about and yesterday’s judgment should not stop us striving towards matching our previous achievements.

In that sense, Rangers remains the most successful club in Scotland and it’s that reputation we must protect going forward. Ironically, it’s that same fact which will also be the motivation of those most keen to continue causing problems. However, is it fair for Rangers fans or a national institution to be blamed for the selfish actions of individuals more concerned with themselves than the club – or even the sport itself? There’s no coincidence it’s the same kind of people who want to perpetuate what should be an issue settled by Lord Nimmo Smith two years ago. He drew a clear line then and the issues Rangers FC has faced since the HMRC announced their intention to investigate in April 2010 have resulted in an ongoing punishment far beyond the wildest dreams of those who seek ill of our club.

Moreover, it’s no coincidence that since then Scottish football has also toiled in so many ways. Our national team can’t qualify for major tournaments and our clubs fail to compete with the bare minimum European competition has to offer. Armageddon may have been an exaggeration but outwith the odd non-Old Firm domestic cup win, the fact is Scottish football’s competitive profile is falling and only the most amaurotic of fans refuses to acknowledge such. It may well be hypocritical of a Rangers fan to complain about the lack of focus on the bigger picture but the point is no less valid: Scottish football would be truly septic if it allowed events at Rangers to distract attention from the bigger issues facing the national game. Is it really best to allow the ego of David Murray and the deceit of Craig Whyte to spoil the future well-being of our national sport in favour of petty grudges no-one really benefits from?

In conclusion, tax case appeal or not, you won’t find many Rangers fans denying the faults that permeated their way through the club in the latter half of Sir David Murray’s custodianship. In fact the Rangers Supporters Trust spent several years from 2003 decrying Murray’s methods while being mocked by the same sections of the media suggesting more punishment now. Nevertheless, despite yesterday’s judgment, the question of legality remains open to debate and seems irrelevant given the cost the club has already paid in real terms over the last five years. The real question is if Rangers is to be punished further for these indiscretions who actually gains from this? And if there is to be such, then let those that are without sin cast the first stone. That could take a while…