What happens if Rangers loses its larger tax case?
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What happens if Rangers loses its larger tax case?
The outstanding sum in dispute from the smaller tax case looks affordable. It's hard to imagine that £1.4m would sink the club. But a bill for £49m is rather different.
The leaked legal submission in the Martin Bain case asserts that Craig Whyte has said privately that he would handle a bill up to £15m, but after that, the club would go under.
That's not being confirmed, but nor is it being denied in the reported comments from the man who controls 85% of Rangers shares. Questioned by the press, he refused to give a guarantee that the club would survive losing the tribunal.
It's worth noting that HMRC is playing tough as creditor, and particularly with football clubs.
That's because clubs have long had a habit - not allowable among mere mortal companies - that they can keep trading while technically insolvent.
That's not been the case for Rangers, but what it's discovering is the hard-nosed attitude of HMRC towards challenging CVAs, or creditors' voluntary arrangements to let a company go down and then picking up the pieces, minus the tax bill.
The tax authority could also have an interest in pursuing its case against Rangers for £49m post-administration, even if it had little chance of recovering that money - if only to set a legal precedent for others who have used offshore financial vehicles to pay employees.
Tax crackdown
So collapsing the company ahead of a ruling by the tax tribunal would not make the case go away. And if HMRC becomes the largest creditor, having won the tax dispute, then the tax authority is in the driving seat in determining who controls the club when it comes out of administration.
The administrator has a legal duty to try to rescue the business as a going concern and to sell it on, seeking compromise between creditors to get the best deal for all of them.
Those who fear Rangers would go the way of Gretna should be reassured by that. There is still a lot of value in the club, its ground, its brand and its following, but only if it continues to trade and to play football.
Other factors worth noting about HMRC's recent behaviour: it's begun to use a legal power that has been little used for years, which holds directors personally liable for tax, and particularly for national insurance, that's gone unpaid.
Could that extend to former directors? Apparently so. Watch out, Sir David Murray.
It's also keen to challenge the assertion by football's ruling bodies that football debts, such as player transfer fees, should take priority over all other bills. Unsurprisingly, HMRC begs to differ, seeing itself as first in the queue.
One final word of advice from m'learned friends: company administrations are best when they're planned, and the outcome determined in advance.
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