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HMRC rejects Rangers CVA application

Date Added: 13/06/2012  

HM Revenue and Customs (HMRC) has announced it has turned down an application for a Company Voluntary Arrangement (CVA) from Rangers Football Club.

This means the club is going to be liquidated and will have to reform as a new company, with its place in the Scottish Premier League under threat.

Rangers will now be reliant on being re-elected to the division by the other 11 clubs, including Glasgow city rivals and current SPL title holders Celtic.

A statement by the administrators of the side Duff and Phelps stated the club will continue to operate as it always has done, but admitted it will be under a new company structure.

Prospective owner Charles Green saw his application to buy the club and bring in the CVA turned down by HMRC, although he is not giving up on his goal of owning Rangers.

Mr Green is now set to try to form a "newco", taking note of the terms of a deal from a consortium arranged by the administrators.

But the future of the club appears to be uncertain, with a place in next season's SPL far from guaranteed.

"We will be liaising with the football authorities at the earliest opportunity to establish our position regarding the SPL," said Mr Green, who will also have to approach the Scottish Football Association to establish the side's likely position.

An SPL board meeting is set to be held next week, but this may be too soon to come to a decision on the future of Rangers, with talks expected to take place later in the summer.

"I am hugely disappointed by the decision of HMRC not to support the CVA proposal and that disappointment will be felt acutely by Rangers fans across the world," added Mr Green, who pointed out he cannot see what benefit it is going to achieve.

He stated he does not think HMRC is going to be able to recoup more of the money owed to the organisation by Rangers Football Club as a result of turning down the CVA in favour of the liquidation of the company.

Due to the application for the CVA being rejected by HMRC, Rangers will be banned from representing Scotland in European competitions for the next three years.

This is likely to be a further blow to the financial health of the club, as its appearances in Europe help to prop up the side's bank balance.

In a statement, HMRC insisted that the club is not being "undermined" by the decision to turn down the CVA application, noting it will ensure football continues to be held at Ibrox, as well as enable a sale of the football assets to be made to a new company.

It suggested this is the best way for Rangers to be able to make a "fresh start" next season, as it will be free from claims or litigation, which would not be the case if the CVA had been granted.

Rangers continue to await the outcome of a First Tier Tax tribunal at the Court of Session in Edinburgh later this year, which could see the club ordered to pay tens of millions of pounds in unpaid taxes to HMRC.

John MacMillan, general secretary of the Rangers Supporters' Association, told the Scottish Sun that the rejection of the CVA and the news the club is set to be liquidated is "dreadful".

"The powers that be need to be more open with the fans. There have been vultures hovering over Rangers," he said, noting the side is now going to have to be "humble" in the future.

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