Craig Whyte – The HMRC Memoranda – Part 1 – As Disclosed By “Sam”

I have been able to lay my hands on a bundle of internal HMRC memos regarding the tax affairs of Craig Whyte’s Rangers, and the tax man’s strategies for dealing with them. I will obviously not reveal my sources, but I wish to offer a word of thanks to an anonymous central heating/ventilation engineer, whom we shall call “Sam”.

 

I cannot vouch for their authenticity, but I feel I should put them before a wider public.

 

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HMRC Internal Memo – Absolutely Top Secret – Eyes Only

From  –           Hector – Head of Big Tax Stuff

To       –           Jeremy Taxman – Head of Smaller Tax Stuff

9th May 2011

Jeremy,

How the devil are you? I wanted to get a quick update. Our masters in Whitehall are getting all upset about Vodafone, Philip Green and the rest. They keep casting up to me that I was the Tax Inspector for Ken Dodd’s affairs – they’ll never let me forget it!

Anyway, one of the chaps was saying that we had been repeatedly embarrassed in these high profile cases, including Portsmouth FC. I told him that it was ok and that you guys were on top of the next big one – the Rangers case. Unfortunately, he started to wave about a page from the blasted Daily Mail. “How can this man say he is not going to have to pay anything?”

I was given a rocket and told to give someone a good kicking. I gave that up after Eton, but if I am getting a roasting in front of the open fire, then someone will get it from me too!

Apparently this man Whyte has a bit of history too.

Can you let me know the score ASAP?

Good chap!

Hector

 

 

 

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HMRC Internal Memo – Absolutely Top Secret – Eyes Only

From  –           Jeremy Taxman – Head of Smaller Tax Stuff

To       –           Hector – Head of Big Tax Stuff

11th May 2011

Hector,

Thanks for the memo. Saw you briefly at the Head of Department meeting – like the Mohawk, but think the feather boa was a bit much.

Anyway – this Rangers stuff.

You will remember all those searches the City of London Police carried out, and all the stuff they dug up? Well it got us on the trail of football teams using these blasted Employee Benefit Trusts. You’ll remember Baxendale –Walker? Someone mentioned he was into acting now – I’ve always loved a bit of amateur dramatics myself – must try to catch whatever he’s been in.

Anyway, he seems to have been selling these left, right and centre like some kind of magic shield against paying tax. We put our best men on it, and they trawled through most of the football teams involved. Almost all of them had got it right – i.e. the “Trust” did not grant every request for funds and there is nothing in black and white stating that “loans” from the trust were non-recoverable.

However, when the chaps went through the bins at Ibrox Stadium, the home of Rangers, they were astonished. It seems that, maybe in the style of canny Scots, they were putting it in writing that the players were getting paid their wages partly through the trust, and also that any such “loan” was not repayable by the player. Turns out the execs were at the same game, but there don’t seem to be any of the incriminating documents for the bosses.

As you know from the reports before, we hit them with a big assessment, nearly enough to make it to your department in fact. All in, with interest and penalties, the bill is nearly £50 million. They appealed of course, and the FTT has been running for a while.

That QC Thornhill is running the defence. He seems to be very deliberate from the reports I am getting. Almost as if he is trying to drag it out. Apparently to explain how the system worked as regards the players and the executives, he had to build a replica of Ibrox out of paperclips. The Tribunal asked him to explain the relevance, but he said that it would all become clear when he had finished. Unfortunately that used up the last three days of the hearing, so it’s been continued till later in the year.

As regards what Mr Whyte had to say, and more about him later, I will give his quotes, and my comments.

‘At this moment in time, there is no liability to HMRC,’ said Whyte. ‘There is a tax tribunal which has been going on for some time.

‘Our advice is that we are going to win the case. I’m confident that we are going to win the case and that there will be no liability there.

‘That’s not going to be determined for a while yet but I’m very confident that we are going to win the case.’

‘It’s something we got into in quite a lot of detail,’ added Whyte. ‘I’ve spoken to the legal counsel dealing with the case. He’s very confident that we are going to win the case.’

I have spoken to our chap. He told me that he had tried to blow down the paperclip Ibrox, but he had failed. However, he did say that, so far, it seemed plain sailing, and although there were one or two transactions where it was not going to be provable that tax was evaded, most are in the bag. It is all a question of the money. Mind you, he made some crack about it running into next year. I told him that was not funny!

He says there is no chance of that, especially as Thornhill has been ordered to finish the paperclip Ibrox by the time we re-convene.

Quite what detail Mr Whyte has seen that gives him confidence, I really don’t know. I think, in view of his past, this is a bit of bravado.

To be honest, this chap has always been a bit “under the radar”.

We got our top folk at Centre 1 on to him. There was a bit of a fracas, as there seemed to be some sort of maintenance engineer always hanging round the files. Someone suggested he was an under cover News of the World reporter! I said that the NotW would never sink so low as to spy on HMRC.

Mr Whyte seems to have made a bit of money early on in conjunction with his father, and there is then a trail of companies in which he has been involved which have then gone under. Of course he is involved with Liberty Capital, and they are typical venture capitalists. Take over a dying business, carve up the carcase, make a profit and move on to the next. He was involved with a couple of rather peculiar individuals, one called Sykes, who was convicted of fraud, and an accountant who was struck off.

That was of course a long time ago, but I got some info from the Insolvency Service files. Whyte was disqualified from being a company director for 7 years in 2000. He apparently disappeared to Monaco after that, but the IS inspectors thought he had been a shadow director in a failed company they had to wind up.

There were no proceedings though, as it was not felt worthwhile or necessary to look to nab him in sunny Monte Carlo to bring him back. This was despite the offer by 37 individual Insolvency Service guys, including two cleaners, to go there with an expense account to “bring him to justice”. Of course nothing was proved, so he is an “Innocent Man” (that reminds me; remember that Billy Joel concert we attended with the Permanent Secretary last year – best timed “tax inspection” ever!)

Bottom line is that the FTT is going well. We should get our win soon.

We are also due £2.8 million plus penalties for their Discounted Options Scheme which went wrong (for them!) The good news is that Rangers signed an agreement to pay, and the new owner has agreed, apparently, to pay it. He has funds lodged with his lawyers to let him do so, we are led to believe.

We need to let them sort out the loose ends of the take over, and so we should get this money fairly soon.

As far as the future goes, Rangers have always been pretty good at paying their tax on time, and we see no reason for that to change. Thank goodness Mr Romanov did not take them over. I have a team dealing exclusively with Hearts!

I am sure that, by the time we are both back from our summer cruises, we’ll have a decision from the FTT, and payment of the £2.8 million. Rangers want to talk to us about the penalties. We are starting at £1.4 million, and as long as they are sensible and pay up, then we should be happy to knock a few thousand off. It’s good to deal with a company who are generally decent about paying up when they get caught. I can’t even argue about the FTT case – no one would have accepted a £50 million liability without having a shot at reducing it.

Anyway, even if we win, the balance sheet shows Rangers are chock full of assets and therefore, if we get the whole £50 million, there will be more than enough to pay the bill. Might stop them buying players for a while, mind you!

Orra best, as I understand they say at Ibrox,

Jeremy

 

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Further notes and memos are being checked at present and will be published soon…

 

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15 Comments

Filed under Alleged Humour, HMRC v Rangers

15 responses to “Craig Whyte – The HMRC Memoranda – Part 1 – As Disclosed By “Sam”

  1. TheBlackKnight

    “Apparently to explain how the system worked as regards the players and the executives, he had to build a replica of Ibrox out of paperclips. The Tribunal asked him to explain the relevance, but he said that it would all become clear when he had finished.”

    PMSL!!!!!!
    Brilliant. I may try that sometime :D

  2. campsiejoe

    Paul

    Brilliant !
    The Panto season has really started
    Can’t wait for Part 2

  3. rab

    Great reading as usual paul.

    Any truth in the rumour that the paperclip replica needs 10-15 million in upgrades

  4. Moctical

    This looks awfy like the memos I got sent too, but they were from a guy calling himself Louie who claimed to be an accountant. Must be a coincidence…

  5. renfrewdave

    did it not look at bit daft??? a workie with a big camera and note pad up a pair of steps saying “nae probs hector.. aw wull be finished in a wee bit wae this thing up here, hows the wifie and bairns, santa going be good tae them? ” for 17weeks.
    well if not can i get a job there….

  6. renfrewdave

    “aye aye hector am just vac-ing the unit oot.. then 24hrs pressure testing.. then gasssing it up an a will be finished… whats that? your whyte case still no sorted…”
    enter stage left
    “morning hector… aye a big leak somewhere we canne find.. might be days/weeks.. aw the whyte case is in!! found it.. your sorted see you later…. aye aye test certs are on their way…… see you round aboot mid jan.. aye aye thats right your whyte case will be in full flow then.. . aye we will keep the noise doon an that…”

  7. haha thanks for the laugh Paul!

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