Last month, we told you about the ongoing match between HMRC and “oldco”, the company that previously owned Glasgow Rangers Football Club. And there’s been an update…
What we already know
Quick summary of where we are already.
- Rangers FC owners paid players using an Employee Benefits Trust (EBT) between 2001 and 2009.
- Players received their earnings as a loan, therefore not paying income tax.
- At the time of its liquidation in 2012, it owed HMRC £90million.
- 2017: court finally rules that they broke tax avoidance laws.
- June 2019: HMRC Penalty Review Consistency Panel reduced their penalties for tax avoidance using an EBT by £24m.
You can get the full story here in our previous article.
The liquidators busy sorting out this mess, BDO, say that HMRC has reduced this bill by an additional £5.2m. This is in relation to the PAYE, National Insurance Contributions and VAT payments that were not made.
As reported by the Glasgow Times, the BDO report says: “Following a further review of the remaining parts of HMRC’s claim, the element that related to arrears of VAT, PAYE and national insurance in the period prior to the commencement of the administration was reduced by £5.2m.”
The total tax bill still owed, is £67.5m. £48.8m of this is relates to the EBT situation. The rest is for NICs, PAYE, VAT and other missed tax payments.
But this final bill is still being discussed by BDO and HMRC. With the liquidators disputing every number. As the report state: “The Joint Liquidators and their tax specialists remain in a dialogue with HMRC with a view to seeking to resolve the remaining issues.” It is likely to be well into next year before a final figure is settled and paid.
It has been suggested that the final payment could end up being as low as £20m. This is partly because HMRC know that ‘the cupboard is bare’, so to speak.
All of this fall on the financial shoulders of the company that owned Rangers FC at the time. And not the club’s current owners. They are not in any way liable for the tax avoidance of the previous owners.