Sturgeon concerned for local workers as Rangers enters administration

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By a Newsnet reporter  

Scotland’s Deputy First Minister Nicola Sturgeon has described as “an anxious time” the news that Glasgow Rangers have entered into administration.

Ms Sturgeon, who is the constituency MSP for the area that includes Ibrox stadium, voiced her concern after news broke this afternoon that administers firm Duff and Phelps had been appointed by the struggling club.

By a Newsnet reporter  

Scotland’s Deputy First Minister Nicola Sturgeon has described as “an anxious time” the news that Glasgow Rangers have entered into administration.

Ms Sturgeon, who is the constituency MSP for the area that includes Ibrox stadium, voiced her concern after news broke this afternoon that administers firm Duff and Phelps had been appointed by the struggling club.

In a statement released this evening Ms Sturgeon said: “In addition to its position in Scottish football, Rangers is also a big employer in my constituency.

“This is an anxious time for everyone associated with Rangers and for all those whose jobs depend on the Club.  Now that an administrator has been appointed, I very much hope that a way forward can be found that allows Rangers to meet its obligations, continue in business, and save jobs.”

A meeting is reported to be planned this evening where staff are expected to be told what the immediate future holds for them.  The club employs around 250 staff directly and there are other businesses which will be affected by today’s decision.

The Ibrox club had lodged papers yesterday giving notice of their intention to start the administration process, from that moment they had ten days in which to appoint administrators.

It was expected that the club would try to use the ten day period in order to negotiate with HMRC in a bid at reaching some sort of agreement over an estimated £50 – 75 million disputed tax bill.

However HMRC today attempted to seize the initiative by appointing its own administrator.  The Ibrox club immediately short circuited this move by appointing their own administrators, London based firm Duff and Phelps.

The firm will now take over the daily running of the Ibrox club.

Rangers will now be deducted an automatic 10 points from their SPL league total and cannot register new players.  If the club has not resolved the situation by the end of March then they will not be able to take part in European football competitions.

Strathclyde police are also seeking an urgent meeting with the administrators to seek confirmation that they will receive payment for policing football matches.

The club’s plight stems from a system called Employee Benefits Trusts (EBTs) introduced when Sir David Murray headed the club.  EBT’s are typically used in order to minimise income tax payments and National Insurance contributions by paying wages in the form of ‘loans’.

With EBTs, an employer pays money into a trust, usually held in an offshore tax haven, and that money is paid out by the trustee to the beneficiaries in the form of loans.  These loans are not subject to income tax or National Insurance.

Crucially, these ‘loans’ cannot be made on a contractual regular basis as that would effectively make them wages, so one would expect the trustee to occasionally refuse to pay a loan.

HMRC believes the system used by Rangers to pay its staff over a ten year period was little more than a tax scam and the Ibrox club owes at least £50 million.

Sport Minister Shona Robison has said that the club’s current plight was “a concerning situation for everyone involved in Scottish football”.

She added: “Football is our national game and it is now for the administrators to take forward the process of assessing the business and securing an outcome in the best interests of the club, its staff, supporters and the game of football as a whole in Scotland.”

It has also emerged that investment high-flyer Paul Murray was looking into the possibility of buying the club from current owner Craig White.   Former Rangers Director Murray – who tried and failed in an £18m bid for control with Dave King back in 2009 – confirmed his intention this evening on Radio Scotland.