Story highlights
Scottish champions Rangers pave the way for the club to go into administration
Glasgow club currently awaiting verdict in tax dispute with UK government
If Rangers lose tribunal they could be liable to pay over $78m in back taxes
Chairman Craig Whyte says club may yet not decide to go into administration
Scottish champions Rangers have made preparations in court for the club to go into administration as they wait to discover if they will be forced the pay the UK government over $78 million in tax.
The Glasgow-based club, who have been champions of Scotland 54 times, confirmed they had filed documents at the Court of Session in Edinburgh, which gives them ten days to appoint an administrator.
Rangers, who form one half of the famous ‘Old Firm’ rivalry with city neighbors Celtic, are awaiting the outcome of a tribunal which will rule whether they owe Her Majesty’s Revenue and Customs (HMRC) more than £50 million ($78m) in tax.
The club’s chairman, Craig Whyte said there was “no realistic or practical alternative” to Rangers’ decision and said he was committed to ensuring their long-term future.
If the club were to go into administration they would be docked ten points by the Scottish Premier League, which would see them remain second but fall 14 points behind leaders Celtic.
In a statement on the club’s website Whyte said it was clear since his takeover in May 2011 that “the club was facing massive financial challenges both in terms of its ongoing financial structure and performance and the potential consequences of the HMRC first tier tax tribunal.”
He added: “I have taken the decision that the most practical way to safeguard the long-term future of the club is to go through a formal restructuring process. It may still be possible to avert this but that is not the most likely way forward.
“What is of paramount importance is the long-term security, survival and prosperity of this great football club.”
The case against Rangers centers around the use of employee benefits trusts (EBTs) which the club previously used to pay their players.
HMRC insist the club used the method as a way to avoid paying tax and Whyte said Rangers must prepare for the worst.
He added: “There is no realistic or practical alternative to our approach because HMRC has made it plain to the club that should we be successful in the forthcoming tax tribunal decision they will appeal the decision.
“This would leave the club facing years of uncertainty and also having to pay immediately a range of liabilities to HMRC which will be due whatever the overall result of the tax tribunal.
“In blunt terms, if we waited until the outcome of the tax tribunal, the risk of Rangers being faced with an unacceptable financial burden and years of uncertainty is too great.”
