STV’s Scotland Tonight programme on 7th November followed up their earlier story about the First Tier Tribunal (Tax) re-starting yesterday.
Their reporter, David Marsland, presented the introductory piece to camera from the dark and chilly street outside Ibrox, so that he could tell us that no one inside was talking to him about this.
He pointed out that Rangers were fighting on at least three fronts (a) Sectarianism, as exemplified by the appearance at court today of their reserve goalkeeper, Grant Adam, on an aggravated charge of breach of the peace (to which he pleaded ‘not guilty’); (b) media bias, as shown by the small gathering of fans to protest outside the BBC Scotland HQ at Pacific Quay on Saturday and (c) Tax.
John Cairns, chair of the tax committee of the Institute of Chartered Accountants in Scotland, appeared on screen to tell the audience that HMRC may well be looking to pursue this as a high profile case, and he referenced the Lester Piggott and Ken Dodd cases. Interestingly of course both those cases resulted in criminal prosecutions of the alleged “tax dodger”.
The reporter summarised the issue as follows – the Tribunal commenced its hearing today at a “Secret location” somewhere in Scotland. Images of the members of the FTT(T) entering a hidden hearing room situated under a swimming pool, as in Thunderbirds, come to mind.
The secret location for the First Tier Tribunal?
The Tribunal is to consider the use by Rangers of Employee Benefit Trusts, by which, since the 1990’s, Rangers paid players via these EBT’s. The players received loans, which were never to be repaid, through the trust and as such they were only taxed on the interest element, rather than the “loan” being treated as salary, and thus chargeable to full Income Tax. In addition, payments to the trust could be offset against Rangers’ own taxes, and in addition, they did not need to pay National Insurance on the sums alleged to have been paid qua wages.
As Mr Cairns commented, these were legal, as long as they were operated properly. The implication therefore is that these were not.
STV then showed a clip of Mr Whyte’s interview shown by them on 19th October where he confirmed he was aware of the tax case when he took over, but that he had a “contingency plan” if it went bad.
Mr Marsland concluded by pointing out that a £50 million tax bill would result in a loss of points, at the very least, for Rangers.
The discussion then moved to the studio, where John McKay spoke to both Graham Spiers, the Times journalist, and John McMillan, representing the Rangers supporters.
Dealing firstly with Mr Spiers, I wonder if his appearance to discuss matters Ibrox will get him his “red card” from Mr Whyte? There was little or nothing in fact in what he said that could be seen by a normal observer as defamatory of Mr Whyte. That might not stop him being threatened with banishment from the marble halls.
He started off by saying that the possibility of a £20-£40 million bill was a ticking time bomb for Rangers. If the bill ends up at that sort of level, then Rangers as a Club will be crippled. He accepted tether was a chance they could win, but if they lost, then administration was inevitable.
He went on to say that, if the Club went into administration, that WOULD BE GOOD FOR MR WHYTE! It would not be good for Rangers. Why would a sensible businessman take on a possible £45 million liability?
The quicker Rangers went into administration, the better for Mr Whyte, as he is a preferred creditor. If the tax bill causes the demise of Rangers, Mr Whyte can say it is not his fault. This would allow Rangers to eliminate all of its debt, and for Mr Whyte to get come of his money back.
He said that it was inconceivable that the Rangers “diaspora” could “chip in” to save Rangers.
Administration would be a humiliation for a club with Rangers’ proud tradition, but from a business point of view, the best thing for Mr Whyte was administration.
Perhaps he could broker a private deal with HMRC for £10-15 million, but why should he do so? THE LAST THING MR WHYTE WANTS IS A DEAL WITH HMRC. Why should he be putting in more money over the sum already paid to clear the bank debt?
Rangers face “total obliteration” ad it is all the fault of Sir David Murray and the old regime.
He was then asked a question which took him by surprise – is Craig Whyte Rangers’ equivalent of Fergus McCann? He said on reflection that he was not. When Fergus McCann took over Celtic, the club was at death’s door. Celtic only had days to live. The similarity was that no one else was willing to step in at Parkhead as no one else was willing to replace the Murray ownership, other than Mr Whyte. However, Rangers, whatever happens, will go on. Mr Spiers does not believe though that Mr Whyte can make this work.
Mr McMillan was there, as I said, to represent the views of Rangers fans. His diagnosis was that the situation was serious but the fans were behind the club. The fans hoped that the tax case would be won.
He acknowledged that Mr Whyte had gone into Rangers with his eyes open – he knew about the tax case. This suggests he is confident of the result, as was Sir David Murray before him.
Things were not looking good, but there should be no doom and gloom.
Mr McMillan agreed that the Rangers fans could not save the situation if the case went against them, but the fans would do whatever they could.
When asked about possible changes, Mr McMillan said that whilst the fans would not like it, they would maybe “have to accept” a Rangers 2012, but he did not think that supporters would accept the bane of Ibrox Stadium being changed. However, the club and the fans would need to look at all angles.
He ended by stating that the supporters had to back Craig Whyte and that the fans were 100% behind him.
Mr McMillan fulfilled his role on the programme perfectly. I imagine his view is one shared by many of the fans – Mr Whyte is the only person who was willing to take on the challenge – he is a clever businessman who must have a plan to deal with the situation he knew about when he took over.
The fans would accept whatever was necessary to ensure the club’s survival, though they might not like the ground being re-named for example. The bottom line for the fans is that Mr Whyte has to be trusted because he is the only man n position to do something about the situation.
Mr Spiers gave a very interesting range of replies. I am sure he was not affected by Mr Whyte’s threats to ban him from Ibrox, and being on a retrospective “yellow card”.
However, what he said seemed somewhat schizophrenic. On one hand, the club faces “total obliteration” and humiliation if forced into administration. The process of administration would be good for Mr Whyte but not for Rangers. Why should he enter any arrangement with HMRC if this would lead to less of a financial return for him?
It is interesting though that the contrast Mr Spiers used with Celtic was that they were at death’s door, and by implication, despite facing “total obliteration” Rangers are not at death’s door. Mr Spiers tweeted a week or so ago that he expected them to enter administration in 14 days.
He also stated that he was sure that Rangers continued, with the debt all gone. In what way therefore is that outcome a bad one for Rangers?
Clearly in a short TV slot, the full implications as detailed and debated, for example on RangersTaxCase.com, could not be gone into.
Mr Spiers’ position seemed to be (a) that administration is not good for Rangers but (b) they will continue debt-free, with none of the potentially awful consequences spelled out.
Mr Spiers is, from what Mr Whyte has said, very close to being persona non grata at Ibrox. One suspects that some fans might view his comments through a negative prism. However, taking all that he said at face value, did he say anything really that was offensive (a) to Mr Whyte or (b) to the team?
Perhaps the suggestion that the respective interests of the owner and the company might not be at one could trouble some, but that is really only a reflection of reality, isn’t it?
It will be interesting to see any official Rangers reaction either to STV as a whole or to Mr Spiers.
It is also interesting, despite the full picture not being spelt out, that the tax case is being discussed on one of Scotland’s national broadcasters. (Perhaps one day the credit to RTC will be given!)