2 Questions regarding the big tax case

[Ricky_ 893]

1. The administrators have said (couldnt find the actual quote) that the outcome of the tax tribunal isn't a major issue at the moment, because they pot they will have to pay out a cva will remain the same regardless. Kennedy who has spoken to the media this week in regards to his takeover bid was quoted in saying he wasn't concerned by the big tax case as the administrators will "insulate" him from by means of a CVA. I don't understand this, we hear everyday in the medai this huge tax tribunal could go against us and no buyer would be interested until this is resolved. Craig Whyte was quoted on SSN saying the bill could reach 75 million. Yet the administrators & Kennedy have brushed it off as if the "big" tax case is in actual fact, no "big" deal. Can anyone shed some light on this?

2. 49 million. David Murray ahs been quoted recently sayign he only expects the outcome to be around 10m if Rangers lose. I just heard Derek johnstone on the radio mention that all the Rangers men he's spoken to, nobody know what the number could potentially be. Does anyone know where the figure 49m came from, and how accurate that figure is?

[markybear 136]

Brian Kennedy is correct re the Cva insulation.

£36.6million assessment

Penalties plus interest comes to £49mill apparently.

Craig whyte was trying a bit of smoke and mirrors with his £75mill pish

[Ricky_ 893]

Brian Kennedy is correct re the Cva insulation.

£36.6million assessment

Penalties plus interest comes to £49mill apparently.

Craig whyte was trying a bit of smoke and mirrors with his £75mill pish

so whatst he 36.6m? Is that the amount we will payout regardless of winning or losing the case?

[GMac 1,405]

Think this is why people are coming in now rather than before. Investors would be protected with a CVA and could deal with HMRC.

[gunslinger 270]

we will pay a % of any loss.

perhaps 1% more like 10%

[Ricky_ 893]

Think this is why people are coming in now rather than before. Investors would be protected with a CVA and could deal with HMRC.

i dont understand how the CVA protects them.

lets say for talking sake here, admin agrees with HMRC a CVA for 50p in the £1 for all debt.

it also transpires that HMRC are going after us for 100m in the big tax case.

so if im wanting to buy rangers, im not thinking im "insulated" - if i buy the club and we win i owe nothing to HRMC.

if i buy the club and lose then suddenly i owe HMRC 50million quid.

so, i dont understand, just how relevant is the big tax case, and in what way could a CVA "insulate" a new buyer??

[Edmiston Drive 3,846]

As I said in a couple of posts , when we went into administration, this move gave us a safeguard from any creditors taking action against us. And gave the club/bushiness time to sort the mess out.

[Loyal Bear 72 363]

Think this is why people are coming in now rather than before. Investors would be protected with a CVA and could deal with HMRC.

Exactly. I was Listening to BBC radio earlier (Chick Young, Tom English, Jim Spence) and they were stating how ironic it is that Paul Murray once said nobody will buy us with the big tax case looming and now he is doing exactly that. It's blatantly obvious to me that as we are in 'administration', the circumstances are different. Not one of them mentioned the possibility of the big tax case being included in a CVA or being part of a deal with new ownership.

[Sicknote 26]

The £49M figure, was that not the amount of the assessment we were served with, and are appealing?

[Prytz tick 2]

I suspect that HMRC have already indicated to the Admistrators that they will accept a CVA which invlolves (a) Craig Whyte no longer being involved in any capacity; (b) immediate settlement in full of this year's PAYE and VAT; © immediate settlement in full of the 'wee tax case' debt; and (d) an understanding that whatever the tribunal decides is due in respect of the 'big tax case' can be paid back in fairly modest annual instalments. They will probably also agree to waive their right to interest and penalties. If Whyte and Ticketus are not creditors then HMRC will hold the key to whether or not there is a CVA. They are therefore in a fairly strong negotiating position.

[nelsonRFC82 305]

£24m is the tax HMRC say we would have paid if we paid players via a normal salary rather than EBT, so this is the tax we would have to repay if the EBT is ruled illegal.

There is then about £12-13m of interest to be charged on that tax and a further £12-13m of penalties. This is where the £49m came from.

The £75m seems to have only ever been mentioned by CW, so rather sceptical about the legitimacy of such claim.

In terms of what we would have to pay; for it to be £24m, they would have to prove that every £ that went in to the EBT was illegal; it may be the case that some payments to the scheme were administered correctly?

Only then could interest be calculated (if the tax repayment is less than £24m then it stands to reason the interest charge would fall) and the penalites would have to be justified for the court to also apply them.

Once this figure is finalised, HMRC would (by the sounds of things recently) be willing to deal via a CVA to pay back a %age in the £.

[markybear 136]

so whatst he 36.6m? Is that the amount we will payout regardless of winning or losing the case?

The £36.6 mill is the Assesment that hmrc served us with.

As we are insolvent we are protected or insulated from the full burden. 10p,20p in the pound can be arranged within the Cva for the possible btc liability. Ie the Cva is accepted at 10p in pound for eg, we pay 10p in pound for our current debt. If we lose the btc then the 10p in pound stands for that aswell.

When I say 10p in pound in just giving an example figure

[Ricky_ 893]

The £36.6 mill is the Assesment that hmrc served us with.

As we are insolvent we are protected or insulated from the full burden. 10p,20p in the pound can be arranged within the Cva for the possible btc liability. Ie the Cva is accepted at 10p in pound for eg, we pay 10p in pound for our current debt. If we lose the btc then the 10p in pound stands for that aswell.

When I say 10p in pound in just giving an example figure

ah ok ive got you now thanks.

not that im questioning you or anything but do you happen to have a source with the 36.6 figure? it's just ive never heard/read that figure once. It's always been 49m pedalled by the sun/record/other junk...

[MrSifter 181]

The £36.6 mill is the Assesment that hmrc served us with.

As we are insolvent we are protected or insulated from the full burden. 10p,20p in the pound can be arranged within the Cva for the possible btc liability. Ie the Cva is accepted at 10p in pound for eg, we pay 10p in pound for our current debt. If we lose the btc then the 10p in pound stands for that aswell.

When I say 10p in pound in just giving an example figure

Does this strengthen Whyte's point of view that what he's done protects the club?

[Prytz tick 2]

If HMRC accept 10p in the pound then we're laughing but what if they hold out for 80p? Nobody can force them to agree to a CVA. They have to make a commercial decision about whether they're likely to get more money from a CVA or liquidation and a fire sale of all the assets.

[Ped faeIbroxStreet 5]

I suspect that HMRC have already indicated to the Admistrators that they will accept a CVA which invlolves (a) Craig Whyte no longer being involved in any capacity; (b) immediate settlement in full of this year's PAYE and VAT; © immediate settlement in full of the 'wee tax case' debt; and (d) an understanding that whatever the tribunal decides is due in respect of the 'big tax case' can be paid back in fairly modest annual instalments. They will probably also agree to waive their right to interest and penalties. If Whyte and Ticketus are not creditors then HMRC will hold the key to whether or not there is a CVA. They are therefore in a fairly strong negotiating position.

That's quite a lot of suspecting..ever considered your talking pure shite.

[Prytz tick 2]

That's quite a lot of suspecting..ever considered your talking pure shite.

Quite possibly. If I was sure, I wouldn't have said..I suspect!

[markybear 136]

Does this strengthen Whyte's point of view that what he's done protects the club?

Yes, it doesn't excuse his actions though

[OlegKuznetsov 10,816]

1. The administrators have said (couldnt find the actual quote) that the outcome of the tax tribunal isn't a major issue at the moment, because they pot they will have to pay out a cva will remain the same regardless. Kennedy who has spoken to the media this week in regards to his takeover bid was quoted in saying he wasn't concerned by the big tax case as the administrators will "insulate" him from by means of a CVA. I don't understand this, we hear everyday in the medai this huge tax tribunal could go against us and no buyer would be interested until this is resolved. Craig Whyte was quoted on SSN saying the bill could reach 75 million. Yet the administrators & Kennedy have brushed it off as if the "big" tax case is in actual fact, no "big" deal. Can anyone shed some light on this?

2. 49 million. David Murray ahs been quoted recently sayign he only expects the outcome to be around 10m if Rangers lose. I just heard Derek johnstone on the radio mention that all the Rangers men he's spoken to, nobody know what the number could potentially be. Does anyone know where the figure 49m came from, and how accurate that figure is?

It's probably worth dismissing anything Whyte says unless it's proven.

I believe that the big tax case's final amount will be added to the CVA total and dealt with as part of it, going by the words of Admistrators, experts and bidders.

I think the CVA takes all justified and proven debt (this is where Ticketus's claims may be accepted or rejected) into a big pot and there's a decision to be made via an offer from the Administrator and the acceptance or rejection of that offer from the 75% of the creditors based on their share of the overall debt pot.

If the total were to be, purely hypothetically and chosen completely on the basis of simplicity, a total of £100m but only £20m could be raised, the creditors must vote weighted by their share on whether to accept it.

If so, they all get 20% of their particular debt held by Rangers. If not, I think they try to agree (and re-budget for) a higher level. If it's not possible, then it's liquidation and the assets sold to the highest bidder with the amount raised going to the creditors.

[sergio 1,199]

If HMRC accept 10p in the pound then we're laughing but what if they hold out for 80p? Nobody can force them to agree to a CVA. They have to make a commercial decision about whether they're likely to get more money from a CVA or liquidation and a fire sale of all the assets.

This is what David Murray had to say on what the Tax Man would lose if Rangers were not around, hard to argue with any of that - and the reason why I think they would be bonkers to force the club into Liquidation.

Rangers are still awaiting the outcome of a tax tribunal centring on their use of Employee Benefit Trusts used from 2001-10, which could cost the club up to £49million.

Murray warned the rest of Scottish football about the consequences if Rangers go out of existence.

"If you're not a Rangers fan you want to kick Rangers, and I understand that," he said. "That's just the way Scottish life is concerned.

"I'll just give you some facts: what you'd lose if Rangers go.

"People say Rangers tried to avoid tax. We've not done anything [of the sort] in my opinion at all.

"If you take Rangers' turnover of £50million a year, and we're paying £18million wage bill with PAYE - which unfortunately Mr Whyte has not paid.

"But if you take any normal circumstance, in a normal, typical year with limited European football, Rangers would probably pay to HMRC £20million.

"And if you take 40,000 people watching Rangers every week, let's say 10,000 go and watch St Mirren, Partick Thistle, Falkirk and Kilmarnock. There's 30,000 people won't be in the industry.

"On top of that, the Fraser of Allander Institute have given a report that says Rangers and Celtic bring £100million a year into the economy.

"If Rangers are not there, I don't think Celtic means £50million, because part of that comes through the Old Firm.

"Whether you like it or not, that's just a fact of life.

"Also I think it makes the game less competitive. I don't think the TV deal would be honoured. I think it would affect other clubs.

"Then on top of that there's the hidden amount of money people spend going to games. That's VAT-able too.

"So if you're not a Rangers fan it's understandable. But I don't think it would help whatever other club fans support in the long term."

[markybear 136]

ah ok ive got you now thanks.

not that im questioning you or anything but do you happen to have a source with the 36.6 figure? it's just ive never heard/read that figure once. It's always been 49m pedalled by the sun/record/other junk...

• Former owner issues veiled criticism of Craig Whyte

• HMRC action was triggered by VAT and PAYE bill

Sir David Murray, the former owner of Rangers, has expressed surprise after the club's slide into administration was confirmed, with the Scottish Premier League deducting the club 10 points.

Rangers lodged documents at Edinburgh's court of session on Monday, confirming their intention to appoint an administrator. Amid dramatic scenes at the same court 24 hours later, Her Majesty's Revenue and Customs challenged the attempt by the Rangers owner, Craig Whyte, to make that appointment. The judge gave Whyte a two-hour deadline in which to confirm administration, which was duly met and approved by HMRC.

Murray said: "Words cannot express how hugely disappointed I am with news of the appointment of administrators to Rangers. The timing of the appointment of administrators is especially surprising given two facts. Firstly, there has been no decision, and there is no present indication as to the timing of a decision, from the first-tier tax tribunal concerning the potential claim from HMRC of £36.5m excluding interest and penalties. Secondly, legal opinion on the strength of the club's case remains favourable."

Murray, who sold Rangers to Whyte for £1 last May, has been subject to criticism over the club's predicament. Rangers have been embroiled in a multimillion-pound battle with HMRC relating to employee benefit trust payments to players during Murray's tenure. Whyte has consistently claimed that matter was key to Rangers' off-field troubles when questions have been raised about his stewardship.

It was, in fact, confirmed that a £9m bill due by Rangers in VAT and PAYE had triggered the revenue's actions on Tuesday. Whyte said: "Due to its cost structure, the club has been loss-making for many months. This situation has resulted in increasing liabilities and the club has been in discussion with HMRC regarding these liabilities. These liabilities, combined with the threat of the outcome of the first-tier tax tribunal, left the club no option but to formally restructure its financial affairs."

Murray's veiled criticism of Whyte is pertinent given it was understood to be a condition of the pair's sale/purchase agreement for Rangers that neither party would publicly speak out about the other. Murray confirmed he had more recently looked for assurances from Whyte about Rangers' position.

Murray added: "Following a protracted sale process over a three-year period, Murray International Holdings Limited (MIH) ultimately sold its 85% controlling shareholding in the club to Wavetower Limited (now renamed The Rangers FC Group Limited), a company wholly owned by Craig Whyte, in good faith on 6 May, 2011.

"In addition, the share purchase agreement (SPA) imposed a number of obligations on Wavetower. These included the retention of £9.5m on behalf of the club for investment in the playing squad, expenditure on the infrastructure of the stadium and settlement of an agreed tax liability, together with the availability of working capital to fund the club's operations.

"The shareholder's circular issued by Wavetower on 3 June 2011 confirmed these undertakings. Contrary to recent press speculation, there is no legal mechanism in the SPA for MIH to reacquire the club. MIH wrote to Wavetower on 25 August 2011 seeking confirmation that its various obligations were being complied with. A confirmatory assurance was eventually obtained on 3 January 2012." A recent request for further clarification had gone unanswered.

"Following recent speculation concerning the financing and security arrangements put in place by Wavetower, a request was issued seeking further clarity. At the time of this announcement, no response has been forthcoming."

Whyte held a meeting with Rangers' squad before their Tuesday training session. During those talks the owner sought to explain why administration is an appropriate course of action rather than point out direct ramifications. Yet, at that stage, Whyte is believed not to have signalled it would be as immediate as became the reality. Worried players pressed the owner on the likelihood of them receiving their full salaries when due at the end of this month.

The London-based Duff & Phelps have been confirmed as Rangers' administrators. A partner in that firm – David Grier – was photographed in Whyte's company at Rangers' first home game post-takeover nine months ago.

The SPL immediately confirmed Rangers had been deducted 10 points, leaving them 14 points adrift of Celtic and effectively forcing them to concede the championship. The SPL said: "As Rangers is subject to an insolvency event, a 10-point deduction has been applied to its total points in the league championship for the current season. In addition, Rangers is subject to restrictions on the registration of players with the SPL whilst in administration. We are seeking an early meeting with the administrators."

http://www.guardian.co.uk/football/2012/feb/14/sir-david-murray-disappointed-rangers

[Prytz tick 2]

You can't really argue with anything SDM said there and, hopefully, HMRC will take future years' tax revenue into account when they're considering their options.

[Blue and True 311]

does the tax man have much of a say at the moment

9 million not due

49 million not proven

3 million ring fenced

so what is it we owe them?

Murray getting in bed with ticketus could be about getting them to agree and swing the CVA

[markybear 136]

does the tax man have much of a say at the moment

9 million not due

49 million not proven

3 million ring fenced

so what is it we owe them?

Murray getting in bed with ticketus could be about getting them to agree and swing the CVA

Ticketus own assets (ST's)

I'm unsure if they'll be in the Cva pot

[Prytz tick 2]

does the tax man have much of a say at the moment

9 million not due

49 million not proven

3 million ring fenced

so what is it we owe them?

Murray getting in bed with ticketus could be about getting them to agree and swing the CVA

Not sure what you mean by 9 million not due. I don't think the administrators dispute that we owe that sum in respect of this year's PAYE and VAT. As for the 3 million, I assume you mean the wee tax case, and Rangers have already conceded that, I think, £2.6m is due and they're just arguing over penalties.