HMRC forces Glasgow Rangers into administration

Accountants who follow football may have been surprised to learn that Scottish Premiership team Glasgow Rangers notified the Edinburgh Court of Session at the beginning of the week that it intended to go into administration.

Although this did not mean administration was inevitable, unless HMRC had a last-minute change of heart, the club said it would have no alternative.

Craig Whyte, the owner of Rangers, said he made the decision because the club was unable to pay its tax bill of £49 million. That figure is for the tax plus interest, but with penalties, the total due could reach as high as £75 million.

The case was due to come before a tax tribunal that should have resulted in one side winning. If the club won, they would be free of the threat of the massive tax bill. However, it now transpires that if that were the result, HMRC would appeal the decision and the case would drag on for years, affecting the club’s ability to trade.

The only way that administration could have been avoided according to the club was if the two sides can strike a mutually acceptable agreement. Unfortunately this did not happen and yesterday it was announced that the club had in fact gone into administration.

Meanwhile, Portsmouth FC is about to enter the second period of administration in just two years. Earlier this year, HMRC issued a winding up order over an unpaid income tax of £1.6 million. All the club’s assets have been frozen, including the bank accounts.

UHY Hacker Young will be acting as administrator for Portsmouth.

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