h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

Ok, I'm a Celtic fan. This isn't about glorying in their demise or anything.

What I'd like to know is actually about hidden payments they're alleged to have made to their players:
"The SPL Board has instructed an investigation into the alleged non-disclosure to the SPL of payments made by or on behalf of Rangers FC to players since July 1, 1998."
http://www.bbc.co.uk/sport/0/football/17262725

Now what I'd like to know is why would Rangers do this? The only reason I can think of is for tax evasion, which is a criminal offence, and is only worthwhile if you show a false documents to HMRC as well, and doesn't seem to have been the case.

So why bother not showing the SPL what they were paying? It couldn't have been more than about 10% of the total wage I'd think, so I really can't figure out their, or anyone else's, incentive for this.

Any thoughts?

My club, Portsmouth are going through this too (for the second or third time). We also had a payments thing, for which the chairman and manager (Mandaric and Redknapp) were hauled before the courts for tax avoidance.

To cut a long story short, Redknapp pleaded financial incompetence, claiming it was not he but his dog that opened the dodgy offshore account. The jury swallowed it and they got off.

If you can explain "football accounting" you could make a fortune writing a book, also HMRC would like you as an expert witness.

For your next trick you could do "Hollywood accounting".

It appears the phrase should now be Lies, Damn Lies and Football club accounts.

MY club have not been in debt since the 1970s (and I suspect that Ian Botham was largely responsible for that). Just saying.

B

Yes, but have they won any silverware? Played in Europe? There are compelling reasons for living beyond your means.

MY club have not been in debt since Ken Bates sold us to a shell company in Barbados that was in no way linked to Ken Bates. We certainly haven't been in debt since Ken Bates bought the club back for an unspecified sum.

Up the Iron

I *think* the "extra payments" are linked to the Employee Benefit Trusts. Basically it's similar to what my club, Falkirk, were doing for a while. We were declaring a wage of (say) £1500 a week and paying the tax & NI on that amount, then paying the players an extra £1500 a week cash in hand with no tax paid.

We got caught, went into administration and paid all our creditors including HMRC in full.

At least that's how it was explained to me. The SPL have rules about financial reporting (brought in after Motherwell went into admin).

You could not only make a fortune if you deduced everything about football accounting, but possibly flip spaceships from one corner of the galaxy to another without all that fiddling around with improbable numbers

It's really shocking that this has happened to a club the size of Rangers - I'm also a Celtic fan and take no pleasure in this whatsoever.
I hope they get out of this well - although not so well they start winning the title again obviously

Icy North, I wish Portsmouth even better luck - that's looking really, really not good last I heard

Have to say, the whole thing is marvellously entertaining. If the footballing gods are watching, ple-ease let the blue bigots disappear leaving the green ones to wither on the vine.

For the sake of Scottish football, for the sake of Scottish society, make it so.

I suspect that it is tax avoidance, which isn't illegal.

And 10% of the wage bill even for an SPL team is likely to run into millions.

They should have asked Harry Rednap to look after the books. They would have been OK then.

PP

Pink Paisley, I know what you mean, but tax avoidance is fine like you say, and there's no reason not to tell the SFA/SPL that. I'm sure Wayne Rooney et al have companies that they use for endorsements' earnings, and that seems to be fine. But footballers are employees according to case law, and surely must be taxed that way on the wages they get from their clubs.

I think swl is probably fairly close.

I must I'm absolutely gobsmacked by this. Rangers have been run into the ground by a bunch of spivs if you ask me. It's disgusting.

"...ple-ease let the blue bigots disappear leaving the green ones to wither on the vine."

Question is, if Rangers disappear would there be any point in the SPL? As it is already, the title's usually decided by which one between them and Celtic makes more stupid mistakes.

It's a bind, KB. I love football, want Scottish to be good (it did use to be..), and I'm a huge Celtic fan. But the Old Firm equates to continued sectarianism and bigotry in our society here, and I don't want that. Even if they do get liquidated, a new company will be formed and will get entry to the Scottish League structure in some form, so it's not going to go away.

So it won't go away

If the authorities actually stick to their own rules - no giggling at the back - a Phoenix Rangers couldn't be re-admitted to the SPL. In fact they couldn't even be admitted to Division 3 of the SFL as the new club would need three years of accounts to join the SFA. So strictly speaking, when Rangers get liquidated, you're looking at a minimum of three years in the Juniors, then at least three years going through the divisions to get back to the SPL. That's financially implausible of course because the Rangers support would dwindle to levels lower than even the early 80s and no way could they afford to run Ibrox.

More likely, Phoenix Rangers would buy an SFL 1 side, rename them and move them to Ibrox (a la Airdrie Utd). The best candidate for that would be Cowdenbeath who look likely to be promoted to SFL1. Their lease on the ramshackle Central Park is due for renewal and they rather conveniently have one Donald Findlay QC on the board.

Of course, this is all dependent on the authorities playing by the rules.

I don't know swl, but from what I've gathered (without paying that much attention) what the SPL/SFA have said is that there's no rule for what happens when the likes of Rangers go bankrupt: ie that if the members decide what to do based on their own interests (which they will) then a pathway can be found for Rangers Phoenix to get back in the league.

Which is saying basically that the rules will be bent, but not broken, to keep them as part of Scottish football.

Could be wrong about the first paragraph mind.

Aye, I've been following it on Pie & Bovril where there are a few football trivia geeks who just love going through the rulebooks. There are more scenarios than you can shake a stick at but the overwhelming opinion is a way will be found to keep Rangers in. For a great many people, this will be proof that football in Scotland is dead as a meaningful competition and is now just a product for the tv companies.

For instance it transpires that the SKY deal is void if there aren't four Old Firm games a season, limiting reconstruction and basically saying Rangers and Celtic cannot be allowed to finish outwith the top six.

So would now be a good time to buy shares in Rangers? They must be rock bottom at the moment, and let's face it, they'll be thrown a "Northern Rock" lifeline because they are too big to fail.

I really don't understand people who are blaming HMRC for Rangers' woes: they're trying to get *our* money back and people are reviling them for it. It's been pretty clear for a while that HMRC are gunning for a big football club to make their point and I say good luck to them: it's probably going to be Portsmouth, which sucks for Portsmouth fans. I'd be surprised if the taxman didn't have people already thinking about bringing down Chelsea/Man City once their kleptocrat owners have lost interest and walked away.

Watched the documentary about QPR on iPlayer last night. It was brilliant and terrifying at the same time and it makes me glad to have Kenwright as my teams owner. One of the most interesting/poignant bits was wholly unrelated to QPR: it was the stories told in the Sky Sports News news ticker as there were quotes from Pompey's first administration about how dreadful it was and how it'll never happen again, and others about Whyte's takeover of Rangers ushering in a new era of prosperity and adroit financial management of the club.

The only people I've heard blaming HMRC are Rangers fans to be honest. The £50m tax case aside, Rangers have paid absolutely zero VAT or PAYE to HMRC since Whyte took over. He's used that money to run the club which is why when the administrators took over and started paying taxes normally, the club suddenly had a £1m a month deficit. Whyte took charge last June, nine months later they go into admin owing £9m to HMRC.