Rangers Football Club enters administration

Rangers Football Club has entered administration - meaning it has been docked 10 points, effectively ending its Scottish Premier League challenge.

The club appointed London firm Duff and Phelps as administrators at 14:50.

The move followed an unsuccessful legal bid by HM Revenue and Customs (HMRC) at the Court of Session in Edinburgh to appoint its own administrator.

HMRC lodged its petition over alleged non-payment of about £9m in PAYE and VAT following Craig Whyte's takeover.

Mt Whyte confirmed on Monday that the club had filed legal papers to appoint administrators. He insisted Rangers would "come out stronger" and "always be here".

Joint administrators

It was initially thought that the club had 10 days to make a decision on whether to proceed, but the HMRC action on Tuesday changed the dynamic of the situation.

Paul Clark and David Whitehouse from Duff and Phelps were later appointed as joint administrators and take over the day-to-day running of Rangers while addressing its massive debt problems.

Mr Clark said: "HMRC have been working closely with the club in recent months to achieve a solution to the club's difficulties. However, this has not been possible due to ongoing losses and increased tax liabilities that cannot be sustained.

"We are working together with management and its major creditors, including HMRC, to achieve a solution to the financial problems which will ensure the ongoing survival of the business, which is of paramount importance to all concerned.

"We would like to take the opportunity of thanking the fans for all their past and present support and hope we can rely on them in the future.

"Rangers has a long and proud sporting tradition - one we all wish to see continue. All stakeholders involved with Rangers are working hard to ensure the long-term future of this national institution."

Following Tuesday morning's legal case, a spokesman for HMRC said: "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."

In a statement, Mr Whyte said the HMRC's move meant the club had to "accelerate" its plans.

He added: "The administrators are in today and looking at everything and I will work with them to help them all that I can and we'll have a plan to get out of administration by CVA [Creditors Voluntary Agreement] process as quickly as we possibly can.

"Rangers will always be here as I've said before. We will come out stronger and come out a better business and most importantly in a position to put as good a team as we can on the pitch and to win trophies which is what we all want as Rangers fans."

Sir David Murray said he was "hugely disappointed" at Rangers' plight

Former Rangers owner Sir David Murray said he was "hugely disappointed" at the club's decision to appoint administrators and expressed surprise at the timing of the decision.

Sport Minister Shona Robison said Rangers' current plight was "a concerning situation for everyone involved in Scottish football".

She said: "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."

Financial storm

Meanwhile, Strathclyde Police said it had now resolved issues over payment for policing which may have affected Rangers home game against Kilmarnock on Saturday.

A force statement said: "We have had a positive meeting with the administrators and received assurances about payment for the provision of police services at this weekend's match.

"We are working with the club and planning for the game as normal."

The financial storm engulfing Rangers has several fronts.

Craig Whyte is believed to be Rangers' secured creditor

Mr Whyte has acknowledged that the club has a £10m deficit in annual running costs.

It was reported last week that the chairman had also borrowed up to £24m against four years of future season ticket revenue from Ticketus.

Most serious of all, Rangers awaits a tax tribunal decision over a disputed bill, plus penalties, totalling £49m.

Mr Whyte was reported on Monday as saying this potential liability to HMRC could reach up to £75m if the club lost the tribunal.

HMRC believes the Ibrox club owes cash over its use of Employment Benefit Trusts (EBTs) to pay staff over a 10-year period.

It alleges the Ibrox club did not administer the scheme properly and underpaid tax.

Rangers disputes this and has contested the claim in a first tier tax tribunal, which is due to report within weeks.

After the club signalled its intention to go into administration on Monday, Mr Whyte said the best outcome would be to reach a creditors agreement which would allow the club to continue trading.

Secured creditor

Mr Whyte is believed to be a secured creditor of Rangers and would have to be paid first ahead of others such as HMRC.

However, if HMRC holds 25% or more of the club's debt it can block a creditors agreement which is necessary for Rangers to exit administration.

If a creditors agreement cannot be reached - and if the club cannot be sold - it is possible that Rangers could be wound up.

The ramifications for the Scottish game, if this happened, would be far-reaching.

It is likely that existing TV deals, which provide significant revenue streams for Scottish clubs, would be scaled back or in extreme cases cancelled.

The absence of Rangers fans at other grounds in Scotland would also reduce revenue to competitor clubs.