Rangers’ European campaign for season 2011/2012 didn’t go well.
Defeated by Malmo in the Champions league and then by Maribor in the Europa League it was a financial disaster as well as an on-field disappointment.
Should they however have been playing in these competitions at all?
UEFA’s rules are quite clear that a domestic association cannot approve a club to participate in European competitions if they are “owing to a tax authority”. It was this stipulation which, in part, led to the English FA refusing to award a licence to Portsmouth FC in 2010 despite the fact they had qualified for European competition on sporting merit.
Joint FA and Premier League statement: http://www.thefa.com/TheFA/NewsAndFeatures/2010/FAStatement_280410
In any event, in order for a club to obtain a UEFA Club Licence for the 2010/11 season they need to show that as of December 2009 they had no outstanding money owed to the tax authorities or football clubs. This is manifestly not the case for Portsmouth FC.
This was the English FA refusing to nominate a member club because they did not meet certain criteria in order to acquire a UEFA Club Licence, essential in order to compete within UEFA competition.
And so to the SFA criteria. The Finance Criteria within the SFA Articles states, at 8.2.20, that:
A licence will be refused:
a) If the information in respect of payables overdue towards employees and social/tax authorities is not submitted to the licensor
b) If the club submits information that does not meet the minimum disclosure requirements
c) If the club has payables overdue at 31 March towards employees and social/tax authorities which arose before 31 December preceding the season to be licensed.
There are however exceptions to what is above, notably in relation to part C. These, in laypersons terms, are that the respective club has either paid the bill in full or, been able to show that the claim of a creditor is without foundation or, had written agreement from the creditor, in this instance HMRC, to extend the deadline for payment.
The additional exception is that the individual club instigates and appeal against the claim. It is of course through such a process that Rangers are currently travelling in relation to what is now commonly referred to as the ‘big tax bill’ and it is such an appeal that has allowed Rangers FC to compete in Europe before this season.
Earlier this year, at the start of April, Rangers FC released their Interim Accounts. These were made available for public consumption and from that there is evidence that within these accounts, for the six months to December 31st 2010, there is reference to the tax bill of £2.8 million, the sum based on a core amount and interest.
This is, of course, the same tax bill that had Sheriff Officers enter Ibrox last August.
I know that HMRC had instructed a firm of Sheriff Officers about this unpaid tax bill on June 2nd.
This piece from the Daily Mail in April suggests that the bill was known about well before the SFA deadline of March 31st, 2011
All I have done is to put questions to UEFA and to the SFA in the approved fashion through their respective media departments.
UEFA provided answers on the general rules and regulations, but would not comment on the specific matter of Rangers FC.
I have had correspondence with both the UEFA media office and the SFA over this matter for some time now. It is perhaps useful to share that to give a fuller picture of the state of play.
I initially put questions to UEFA last month about their regulations apropos the granting of UEFA licences:
On what date(s) did national associations nominate their representatives to compete in UEFA Club Competition for season 2011/2012?
When National Associations nominate clubs do UEFA accept that the respective clubs are criteria compliant apropos the Club Licence?
If a club, qualified to play in UEFA competition, is ‘Owing to a social/tax authority’ on and after June 30th does this jeopardise their entitlement to a UEFA Club Licence?
This is the correspondence that ensued:
To: “Phil Mac Giolla Bhain”
Sent: Monday, 12 September, 2011.
Subject: RE: Questions about UEFA regulations.
Dear Mr Mac Giolla Bhain,
The deadline for registering clubs for the current UEFA Club Competition season was 1 June 2011. As deemed in the UEFA club competition regulations, all clubs competing in UEFA competitions are required to have obtained a licence by a competent authority. Please see further information in the UEFA Club Licensing and FFP Regulations attached, especially p. 32 for the responsibilities of the licensor and the licensee.
On your final question, the relevant part of Article 66 can be found below:
Article 66 – No overdue payables towards employees and/or social/tax authorities.
1 The licensee must prove that as at 30 June of the year in which the UEFA club competitions commence it has no overdue payables (as specified in Annex VIII) towards its employees and/or social/tax authorities (as defined in paragraphs 2 and 3 of Article 50) that arose prior to 30 June.
2 By the deadline and in the form communicated by the UEFA administration, the licensee must prepare and submit a declaration confirming the absence or existence of overdue payables towards employees and social/tax authorities.
3 The following information must be given, as a minimum, in respect of each overdue payable towards employees, together with explanatory comment:
a) Name of the employee;
b) Position/function of the employee;
c) Start date;
d) Termination date (if applicable); and
e) Balance overdue as at 30 June, including the due date for each overdue element.
4 The following information must be given, as a minimum, in respect of each overdue payable towards social/tax authorities, together with explanatory comment:
a) Name of the creditor;
b) Balance overdue as at 30 June, including the due date for each overdue element.
5 The declaration must be approved by management and this must be evidenced by way of a brief statement and signature on behalf of the executive body of the licensee.
6 If the licensee is in breach of indicator 4 as defined in Article 62(3), then it must also prove that, as at the following 30 September, it has no overdue payables (as specified in Annex VIII) towards employees and/or social/tax authorities that arose prior to 30 September. Paragraphs 2 to 5 above apply accordingly.
Hopefully this helps.
UEFA Media Relations
I then sent a specific question about the SFA and their interaction with UEFA regarding these licences.
From: Phil Mac Giolla Bhain
Sent: 15 September 2011 15:23
Subject: Re: Questions about UEFA regulations.
Thank you for your recent answers here are my supplementary questions:
On what date did the Scottish Football Association nominate clubs to play in UEFA Competitions for the season 2011/2012?
Did the Scottish FA confirm that all nominated clubs satisfied both their criteria and the criteria of UEFA in relation to receiving a UEFA Club Licence for the season 2011/2012?
Were UEFA made aware, by either the Scottish FA or the club in question, that one of the nominated clubs had, on or around June 2nd 2011, received a tax bill from Her Majesty’s Revenue and Customs, the ‘Tax Authority’ in Britain and therefore Scotland in a footballing context for approximately £2.8 million ?
Were UEFA made aware, by the Scottish Football Association or the club or both, that one of the aforesaid nominated clubs had experienced an ‘Event of significant economic importance’ as specified in Article 67 – Monitoring Requirements of the UEFA Club Licensing and Financial Fair Play Regulations Edition 2010?
Would a club ‘Owing to a Tax Authority’ on June 30th and not having paid said bill, nor made plans arrangements with the respective Tax Authority to pay said bill, or without having instigated an appeal regarding said bill, be entitled to a UEFA Club Licence ?
I received this reply from UEFA on 16th September:
Dear Mr Mac Giolla Bhain
UEFA does not comment on specific cases, as it is the responsibility of the respective national association to issue the licenses. UEFA is in regular contact with the Scottish FA and we can confirm that the SFA issued all licences for the 2011-12 season in accordance with the regulations.
Thank you for the response, dated September 16th regarding Club Licencing.
Can the following be answered?
Is the general recourse of UEFA to open an investigation if there is evidence that a club has either lied, or withheld information in order to receive a Club Licence to participate in UEFA Competition?
And was this the procedure which led to the three year ban for Gyoti Eto FC from Hungary who have been banned from UEFA Competition for three seasons, i.e. that evidence was presented to UEFA ?
Phil Mac Giolla Bhain
A UEFA spokesman said:
Dear Mr Mac Giolla Bhain
UEFA does not comment on specific cases, as it is the responsibility of the respective national association to issue the licenses. UEFA is in regular contact with the Scottish FA and we can confirm that the SFA issued all licences for the 2011-12 seasons in accordance with the regulations.
UEFA Media Relations
With UEFA repeatedly referencing the domestic authority, I then contacted the SFA with the following questions on October 3rd:
There has been widespread coverage acknowledged by Rangers FC in public that a bill for approximately £2.8 million is owed to HMRC by the club.
“Can you please inform me of the date when Rangers FC informed the SFA of this £2.8 million tax bill?”
This question was posed apropos Part A of the SFA Finance Criteria 8.2.20 that says ‘A licence will be refused:
a) If the information in respect of payables overdue towards employees and social/tax authorities is not submitted to the licensor.
An SFA spokesman responded ten days later saying:
“We are not in a position to discuss individual cases.”
Subsequently I returned to the SFA with a more straightforward line of questioning:
‘Are the SFA confident that Rangers FC satisfied the criteria around finance in order to be eligible to play in UEFA Competition in 2011/2012?’
‘Why did the SFA nominate Rangers FC to represent Scotland in UEFA Competition when they had received a tax bill for approximately £2.8 million?’
This was more than a week ago.
The SFA have not got back to me with an answer.