Rangers to go into administration

Feb 13 2012

Scottish football giant Rangers has said it intends to enter administration as the club admitted it could be facing a tax bill of "substantially more than £50 million".

The club lodged papers at the Court of Session in Edinburgh and said a final decision would be taken in the next two weeks.

The Scottish champions will be automatically hit with a 10-point deduction by the Scottish Premier League if they proceed, which would all but end their bid for a fourth consecutive title. The Ibrox club would also face a race against time to sort its finances in time to earn a licence to play in Europe next season.

Rangers insisted there was no alternative to the action but the club also revealed it is in talks with HM Revenue & Customs over a deal to avoid formal insolvency.

Their dispute with HMRC centres on the use of employee benefits trusts, which were in place a decade before Craig Whyte bought out Sir David Murray last May. A three-day tax tribunal concluded on January 18, with a judgment normally expected between two and eight weeks afterwards.

But Rangers admitted victory was not feasible given HMRC's determination to succeed.

In a statement, the club said: "The tribunal relates to a claim by HMRC for unpaid taxes over a period of several years dating back to 2001, which, if decided in favour of HMRC, could result in liabilities and penalties substantially more than the £50 million reported, which the club would be unable to pay."

Whyte, who was jeered by fans as he read out a brief statement outside the main entrance to Ibrox, said: "It is extremely disappointing the club finds itself in this position but decisions have to be taken to safeguard the long-term survival and prosperity of the club both on and off the field."

Rangers has proposed a Company Voluntary Arrangement should it go into administration with creditors protected from the tax case liability.

The SPL confirmed a 10-point deduction and a transfer embargo would only be put in place when administration was confirmed.