Rangers poised to lose league title

Rangers, one of the UK’s biggest football clubs, is set to be docked 10 points, and with that any realistic chance of retaining the Scottish Premier League title, after entering administration.

The Glasgow-based club appointed Duff & Phelps, the London-based arm of the US restructuring company that has been advising it, to take over the day-to-day running of the business while it is addressing its debt problems. The move followed an unsuccessful court challenge by HM Revenue & Customs to appoint its own administrator.

Tuesday’s move into administration means Rangers, said to have won more national championships than any other football team in the world, will be 14 points adrift of “Old Firm” rivals Celtic in the race for this year’s league title.

Craig Whyte, owner of Rangers, confirmed on Monday that the club had filed legal papers to appoint administrators. It was initially thought that the club had 10 days to make a decision on whether to proceed, but its hand was forced after the Revenue attempted in the Court of Session in Edinburgh to seize control of the process.

Rangers could face a bill for at least £49m if it loses a tax tribunal over its historic use of employee benefits trusts, under which clubs pay players’ wages into offshore trusts to avoid national insurance. Rangers disputes the claim, and the tribunal is due to give its verdict within weeks.

After the club signalled its intention to go into administration, Mr Whyte, who bought the club last May, said the tax liability facing Rangers could be as high as £75m, a sum it would be unable to pay. He said the best outcome would be to reach a creditors agreement, which would allow the club to continue trading.

However, the immediate focus for the tax authorities concerns several million pounds of payroll taxes, rather than the larger dispute.

HMRC said on Tuesday: “We can’t discuss specific cases for legal reasons but tax that has been deducted at source from the wages of players and support staff such as ground keepers and physios must be paid over to HMRC. Any business that fails to meet that basic legal requirement puts the survival of the business at risk.”

Rangers may delist its shares, which were suspended from trading on the Plus market on January 9 after missing the year-end deadline for publication of its audited accounts for the year ended June 30 2010.