Exclusive
A few weeks ago I spoke with Rangers chief executive Martin Bain. He kindly took my call on a Saturday morning just after his lad’s football match. I told him that I was a freelance journalist commissioned to do a story for the News of the World. After exchanging some jokes about the perils of being, as I termed it, “a maddie at your boy’s fitba match” I had to tell Martin Bain some bad news.
I informed him that this journalist already knew that Rangers had received a bill from the taxman for £24 million and that interest of £12million had been nailed onto that amount.
Over the previous two weeks the News of the World had firstly broken the story that all SPL clubs were being investigated by Her Majesty’s Revenue and Customs (HMRC) as part of an ongoing tax probe. The real story, however, was revealed the following Sunday in that the old firm, conjoined twins in so many areas, had very different tax policies.
For the last decade, Rangers had been making a systematic use of Employee Benefit Trusts (EBTs).
Celtic looked at this method of being “tax efficient” in 2006, but Celtic Chairman, ex of the Bank of England, Brian Quinn thought better of it.
Initially Martin Bain said to me that, effectively, the tax issue belonged to the parent company of Rangers; Murray International Holdings (MIH).
He told me that there was no tax bill at Rangers.
After going round the houses with Martin Bain on the phone we nailed down that there had been “an assessment” delivered by HMRC to Rangers FC. Most people would call that a bill.
The “assessment” formally becomes a bill when the tribunal system is exhausted, the amount on the “assessment” then “crystallises”.
That is when the money is due to be paid.
The tax authorities have sent a bit of paper to Rangers and that piece of paper has a number on it.
That amount is £24 million + £12million interest.
That £36 million is greater than the club’s well publicised bank debt.
After my interview with Bain the story was out there and perhaps because of this the club Chairman Alistair Johnston went public and clarified the position on the tax probe.
The Ohio based businessman confirmed that the assessment from HMRC was indeed “ a Rangers issue, but it is being masterminded by the Murray Group’s financial and legal advisors,” said Johnston.
The only question to be answered was what tax penalty would be imposed on Rangers by HMRC should they lose the case?
What has not been previously revealed is that Rangers football club have already been served with a tax penalty of £15 million by HMRC for their sustained use of “Employee Benefit Trusts” (EBT) to players and other senior employees.
This brings the total confirmed amount that HMRC are seeking from Rangers to £51 million.
This £51 million bill has yet to “crystallise”, i.e the tax tribunal due process has yet to reach its conclusion.
Rangers can drag out this process by using all the appeals available to them.
However this will incur huge legal bills should they decide to do this.
The figure of £15 million for the penalty is an indication of the seriousness with which HMRC view this case and their determination to see it through to a successful conclusion.
The recent press interest investigation has clearly rattled the Scottish Premier League champions with the club’s chief executive refusing to answer whether or not Rangers had ignored expert tax advice to abandon their tax strategy?
I also put the following question to Martin Bain:
- “Did Sir David Murray or other Rangers executives benefit from this scheme?”
Bain confirmed that “employees of the trust” were paid through the EBT.
I asked him if that included people at the club other than players.
He confirmed that it was not just players.
I then asked him if he had been paid through the EBT.
“That’s a matter for the tax office and my own personal contract so I’d rather not go into that.”
Of course a simple denial would have killed that particular part of the story.
When I put it to Bain that his answer was in fact a “no comment” he didn’t disagree with my characterisation of his answer.
Here is what has been confirmed at this time:
- Rangers have confirmed that there is a tax probe
- Rangers have used EBTs. This will have helped millionaire players pay lower tax rates than most Rangers’ fans.
- Chief Executive ‘Martin Bain has confirmed to this journalist that the bill for core amount has been received.
Initially Bain told this journalist that the EBT was a matter for parent company Murray International Holdings (MIH). However, after the article was published chairman Alistair Johnston confirmed that the HMRC issue was, indeed, a matter for Rangers.
“It is a Rangers issue, but it is being masterminded by the Murray Group’s financial and legal advisors,” revealed Johnston.
When I interviewed Martin Bain he suggested that I speak to MIH financial director Mike McGill.
I called McGill on the Monday after I had spoken to Bain. I spoke briefly with McGill. He told me that he had read the NOTW story and, subsequently, refused to speak to me.
The day after I spoke to the MIH financial director I received further news that shocked me.
What moves this story on is the following information.
I did not know at the time of my interview with Martin Bain that Rangers had already been served with the tax penalty.
The amount of that penalty is £15 million.
Therefore the full amount that Rangers will be due, should they lose this case against HMRC, will be £51 million.
It is clear that those in charge of Rangers did not wish this story to break.
Since I started writing on Rangers taxing problems the club’s public comments have confirmed my journalism to be accurate.
The initial stories were met with disbelief from both sides in Glasgow’s football feud thinking that this news was either too awful or too wonderful to be true.
It is true and it will not go away.
The Scottish champion’s problems with HMRC will be the dominant story out of Ibrox in the next 12 months.
The club’s bank debt is serviceable. The tax bill is not. It’s a game changer.
Martin Bain, as much as one can ascertain over a 15 minutes phone call on a Saturday morning, came across as a really really decent bloke in a difficult position.
I’m sure he cringed when he heard the “Famine song” or saw Manchester policemen kicked to the ground by feral louts in Rangers shirts.
The Ranger’s Chief Executive told me that wee Bain’s team had lost 4-1.
I told Martin to tell his lad to keep his chin up, because you usually find out more about yourself when you lose than when you win.
His dad agreed with me..
Watch this space.
cb
Phil bbc report on website tonight says Celtic declared (when recently requested) one ebt from 2005 set up for juninho. tax payed in 2008 when hmrc discussed.
is this true and does it bring up issue of juninho being incorrectly registered player for 14 games he played….or was payment a one off (signing fee?) and not ongoing contractual agreement that would need to be declared?
May 23, 2012 at 9:34 pm
Phil Mac Giolla Bhain
If The Juninho EBT was incorrectly administered then yes.
However, I do not believe that it was.
Brian Quinn disapproved of the EBT instrument and put a stop to it.
There is no suggestion that the player had a side letter/ second contract.
May 23, 2012 at 10:11 pm
Big Red
Why have the media buried the head in the sand over this??
Pls tell me sir moonbeans ( does he still exist????) isn’t still
Pulling strings with the media!!! Surely the title SIR is now a bit
Hyprocrital!!!! For what?? For Services of running the mighty
rangers into the ground! Pure Dead Brilliant by the way!!!!!
January 10, 2012 at 11:54 pm
frank gallacher
taxing times in castlegrey skull
January 26, 2011 at 10:15 pm
frank gallacher
for ever fiver they spend we will spend a tenner on our tax bill david murray
January 26, 2011 at 10:13 pm
Bernie O'Neill
So pleased to read frank gallacher’s post (26th Jan 2012) reminding us of Murray’s boast about the fiver & the tenner.
I have a suggestion for all the Celtic fans who will attend the next game at Ibrox; wouldn’t it be great if they all waved a fiver because the media are bound to pick up on it and thus lead to a discussion of what an egotistical idiot Murray was, etc, etc. IMHO this would rank alongside that other great wind up when the fans turned up with beach balls, lilos and sombreros..absolutely MAGIC !!! I have never posted a comment before and I would appreciate it if those who are more accomplished and frequent more blogs could pass on the suggestion so it would have a chance of coming to fruition.
March 8, 2012 at 12:12 am
Alan Kirk
Excellent article. Any chance you can for the Scottish Press’ job for them and give updates on HMRC progress to this?
January 25, 2011 at 9:20 pm
PABLOBHOY
kind of puts wee neils behaviour in the shade but still cant find it on any scottish media site ——–shame on you daily record
January 21, 2011 at 11:55 am
Joe Mckay
Brilliant read, Lets hope the thugs and connmen get what they deserve…..
Jailed
June 12, 2010 at 11:10 am
Oliver Plunkett
Good work Phil
May they rot in hell.
June 10, 2010 at 6:16 pm
scott ward
the fair minded individuals urging mr phil to investigate paedophile priests etc. seem to be missing the point. there is no need for him to pursue these wretched cases as the scottish press have been covering them more than adequately. the scandal is that he seems to be the only investigative reporter who thinks that ringers fc’s tax problem is a story worth reporting.
June 9, 2010 at 7:13 pm
dp
a great article phil!
I had been posting for many months about the “GREAT BIG BLUE ELEPHANT IN THE CORNER!!!!!!” but it appears no-one was listening
good day and god bless you!
June 9, 2010 at 12:31 pm
John Turley
@ Andrew O’Brien…
Don’t you dare slate Phil, he’s getting it right into them.
Mon the Hoops!
June 9, 2010 at 10:39 am
Team Lennon
Great article as always Phill. Can you clear something up though, you state the £24 million + £12 million is an assessment and is being contested by Rangers, however the £15 million fine has been issued which would tend to suggest the outcome has been pre-judged by the tax office and they are guilty. Is the £15 million able to be appealed and what is the time period given to pay back such an amount?
June 9, 2010 at 3:45 am
al
Rangers FC will pay heavily for their sins
June 8, 2010 at 11:23 am
john s
Colin Templeton
why dont you do some investigative jouralism yourself, i will give you a wee foot up, go to your search engine and type in prodestant peado clergy. This will do 2 things it will open your eyes and shut your mouth, P.S you wont read these articles in Scottish news papers
June 8, 2010 at 7:31 am
jimmy
very interesting read. fantastic.
this really opens a can of worms though. ten years of operating under a system that is not in the rule book. scamming lizzie out of cash. this may add to the systemic identity crisis that resides within the rangers support.
June 8, 2010 at 7:31 am
tommy
Wonder if the traynors and leckies of this country feel any embarrassment at not having the guts to write any of this , murrays shilling is mightier than the pen
Great work Phil , keep it coming
June 8, 2010 at 6:52 am
the one and only
fantastic news!!! i dont know what would please me more, them getting relegated or ceasing to exist at all? who am i kidding, a world without that shower of vermin!!! carlsberg!! amazing that the scottish media dont run with this ‘crisis’, celtic loose 3 pre season friendlies and its cracked crests and turmoil! they owe a large fortune to ‘betty’ and the silence is DEAFENING!!!!!!!!!!!!! there will be a massive huddle in george sq the day they pull the plug on that mob!!!!!!
June 8, 2010 at 5:37 am
pugwallah
Phil, you’ve rejuvinated my faith in journalism – that took some doing.
You’ve dared to tread where the unscrupulous spineless Scottish scumbags posing as journalists feared to go.
The one thing in the whole hun saga that riles me is that dodgy dave, the master mind behind the scams, seems to be free from criticism. Will he have his day, hopefully in court.
Atb, keep up the ghood work.
June 8, 2010 at 4:58 am
Mr Understanding
A fine article Phil exposing the dodgy dealings of dodgy ‘Sir’ Dave (Knight of the realm for services to business, remember?) which is, more-or-less, tantamount to cheating. Of course, this huge bill and huge debt will mean nothing should a wealthy investor ride in to save the day and pay up the approx £80M to wipe the slate clean before then investing in the club and driving it on to finally win Rangers’ true destiny, the European Cup. And of course, this investor will need to be a very wealthy maniac who simply wants to throw his money away because of his love for ‘ra bers’ because he won’t be making anything back. No capacity for more season ticket sales, merchandising rights sold down the river and of course, the near-on impossible task that faces Scottish sides to qualify for the Champions League starting season 11/12. Hmmm, interesting times ahead. But I wouldn’t bet on them coming out of this unscathed. They won’t go into administration. Surely?
And to the Rangers fans commenting on the article, thank you. Thank you for showing just how moronic, bitter, twisted and downright sick you are. Mason Bingham, you’re sliding so far into self-parody that I think you might be a Celtic fan at the wind-up. 500,000? Seriously? And Rangers fans ridiculed Celtic’s claims of 80,000 in Seville? Half a million? That’s pure comedy gold. And honestly, I know you’ve probably tried to erase it from your memory and are disgusted that modern technology is there to expose the truth, rather than your beloved Daily Record shielding it, but just look on YouTube again at the mess and destruction you caused. Then read up on Pamplona and Barcelona and Villareal. Then look up how many of your own fans were arrested at your own ground on the day of the Manchester final; your own fans fighting amongst themselves. I feel quite sorry for you.
And Colin Templeton, I’m sure you must be delighted that Phil posted his article on Catholic Priests as you, and thousands like you, have acquired a real appetite for child abuse recently. That it’s just child abuse by Catholic priests shows that you do not care about these victims, you care more about the perpetrators, that they are Catholic. Of course, your simpleton’s logic has it that ‘Catholics = paedophiles’ as you all love singing with so much gusto. But your shallow and transparent bias is sickening. Child abuse happens everywhere, in all societies. I’m certain you’ve sat next to them watching a Rangers match. But to use it as a points-scoring tactic, to mock and ridicule it, is pathetic. But wholly within character for someone like yourself.
And of course guys, don’t, whatever you do, respond to the actual article. Diversion, deflection and denial. It’s the Rangers way.
June 8, 2010 at 4:50 am
foggy
great article Phil . . . huns – the quintessential cheats, thugs & tax dodgers . . . wonder what Mrs Saxe Coburg Goethe would make of it all if she knew that her Loyal To The Half-Crown weren’t chipping into her parasitic pot?
June 8, 2010 at 12:39 am
Richard
Well done Phil. Wonder what Mr Struth would make of this mis management. For a club that takes a pride in conducting its business in a dignified manner, this shows shocking ethical judgement.
Good article, well done!
June 7, 2010 at 8:57 pm
dougie
great article phil
keep up the good work mo chara
June 7, 2010 at 8:17 pm
Peter Mc Caffrey
If all these bills come to be enforced then thequeens11 are screwed. I don’t know how, but trust me they will weasel out of this and not be punished to the FULL extent for their systematic cheating of their much loved queen lizzys coffers.
Once again Scotland’s shame have shown their true colours! CHEATS.
Great work Phil.
June 7, 2010 at 7:28 pm
Auldyin
Things fall apart; the center cannot hold;
Mere anarchy is loosed upon the world
Bet they never saw that coming right up to the second before it hit them.
After this evading refereeing decisions is child’s play.
June 7, 2010 at 7:15 pm
colin templeton
Why not do a bit of investagative journalism into the amount of catholic priests who have got away with child abuse for years
June 7, 2010 at 7:02 pm
Phil Mac Giolla Bhain
http://www.philmacgiollabhain.com/?s=rome+rule
FYI Mr. Templeton
June 7, 2010 at 7:16 pm
jm
Fantastic journalism, some rather backward chaps on here seem to forget what your article is about and want to focus on various other irrelevant points (catholic priests etc), if only these (we are the) people had the intelligence to focus on their own problems, maybe they could find the solutions, but alas, they seem to be lacking in intelligence and brimming with blind hatred, shame….scotlands shame!
June 8, 2010 at 6:50 am
jimmy
very interesting read. surely if this is all spot on, then this could be the biggest story in scottish football since celtic won the european cup in 1967.
it really opens a can of worms though doesn’t it? rangers winning on false pretence.
June 8, 2010 at 7:25 am
The Yeti
In response to Templeton – what has your suggestion to do with either Glasgow football team or the article in question?
Really, what a poor excuse for a response.
June 8, 2010 at 9:36 am
Wolftone67
Well done Phil, u can rescue poochs from the brink of disaster, but they might just be out of reach, give them a nudge chief.
June 7, 2010 at 6:47 pm
south doire bhoy
Great article again mate – exciting stuff if true, once one of those debts crystillises its game over!!
June 7, 2010 at 6:37 pm
myfriendstan
An interesting read as usual.
June 7, 2010 at 5:52 pm
october21
Its good to know most of it is going to thems beloved Queen Lizzie. lol
June 7, 2010 at 5:51 pm
Paul Brady
Phil, not wanting to be pedantic but doesn’t feral imply that they were previously domesticated and went wild? methinks the domesticated bit is still an evolutionary ambition for the Manchester miscreants.
June 7, 2010 at 5:47 pm
john paul docherty
Very good artical
just shows the media in Scotland up for what they really are
One Scotland and all that!!!
June 7, 2010 at 5:35 pm
irene88
no wonder they wanted this kept quiet eh phil x hail hail
June 7, 2010 at 5:33 pm
bily boyne
So if the tax bill is £24m and £12m interest AND £15m in penalties, how much is the total bill?
June 7, 2010 at 5:29 pm
DubCentral
Good article as ever Phil. Any ideas on the timescale.
Remember to order your commemorative t-shirt.
http://weknowsfa.spreadshirt.co.uk/-I11645557
or
http://weknowsfa.spreadshirt.co.uk/taxmanwhite-I11645577
June 7, 2010 at 5:25 pm
Landry Apostrophe
I like the personalised touch to this article Phil. I felt I was on the adventure with you
I feel that if this was in the press that element would have been somewhat lost ;o)
LMA
June 7, 2010 at 5:23 pm
Phil
Phil,
Have you thought of chasing this story down with the ‘financial advisors’ used by high profile current and ex players
The plot may well thicken with off shore payments being the norm and encouraged?
June 7, 2010 at 5:19 pm
scarey99
Phil that’s astonishing!! I can’t believe the NOTW haven’t run with this latest chapter of their woes. Incredible work sir.
June 7, 2010 at 5:13 pm
Brizo
a great piece of individual and impartial journalism
well done Phil
June 7, 2010 at 5:10 pm
Mason Bingham
Philip, i need to point out to you when reading “…..saw Manchester policemen kicked to the ground by feral louts in Rangers shirts”.
These where Chelsea shirts and as Mr.Edgar rightly pointed out it was only 0.01% of the 500,000 that travelled caused any bother.
Yours in the Queens English
WATP
June 7, 2010 at 5:06 pm
Simon
Reply to Mason Bingham: The article is not about Manchestoh and the deplorable behaviour there ( 500,000 – that’s half a million you fruitcake) or any percentage thereof, it’s about rangers abuse of tax payments – therefore denying the government from supplying troops with adequate ordinance to put the pesky Afghan in his place. Whichever way you look at it the grfc has behaved deplorably and without a shred of dignity.
June 7, 2010 at 5:25 pm
Pedant Power
Surely the “Queens English” would have an apostrophe?
January 26, 2011 at 9:31 am
bigslips
well thats annoying
June 7, 2010 at 5:00 pm
Peter
Excellent work Phil. Without your work, the media in Scotland would not be talking about this at all – we’d be reading about a new hotel or casino or something.
Shame on them and well done to you.
June 7, 2010 at 4:59 pm
andy odonnell
lets hope they find out more about themselves in defeat to hmrc.
June 7, 2010 at 4:57 pm
m4rky
Hope your right as always phil.
hail hail
June 7, 2010 at 4:52 pm