A £51MILLION alleged “blunder” by the taxman that has been blamed for the downfall of Rangers could result in legal action.

HM Revenue and Customs’ initial £94m claim on the Ibrox club’s old operating company could be cut to £43m if the liquidator BDO succeeds in a fight to contest the way the taxman calculated what the club owed over its controversial use of employee benefit trusts (EBTs) to pay staff and players.   

The Evening Times understands the BDO case could end up being resolved in court.
While Rangers made no comment on the developments, unconfirmed reports suggest the current owners are considering legal action by the current board. 

It is understood that the club intends to undertake a forensic examination of tax and company law in respect of any recalculation and its impact.

READ MORE: HMRC overestimated Rangers’ tax bill ‘by up to £50 million’

The taxman said around £74m was owed for the club’s use of EBTs from 2001 to 2010 to pay players and staff as part of the overall tax claim.

That came after the club’s business fell into insolvency over non-payment of tax of £14m by the old Craig Whyte-run Rangers FC, which relegated the club to the third tier of Scottish football.

Instead of being paid a salary that would be subject to income tax and national insurance, workers in EBT schemes were loaned money – but courts have decided that these payments were wages.

BDO say that it and the taxman have reached an agreement to withdraw a £24m penalty in relation to the EBT claim.

READ MORE: Rangers ‘could have handled’ £20 million tax bill says Ally McCoist

But BDO are said to be about to be about to challenge HMRC’s calculation that the rest of the £38m plus £12m interest was wrongly subject to what is called “grossing up” in terms of working out tax.

This sees the amounts paid to players as net pay. An HMRC calculation would add the higher rate of tax 40 per cent plus national insurance to the payment to work out the total owed.

It is understood that the liquidator believes this to be wrong, and that a recalculation would see the actual amount owed from the so-called EBT Big Tax Case cut to just £23m, with interest of £12m also being cut.

Tax barrister, Jolyon Maugham QC, said: “Lots of noise about HMRC and Rangers. But this seems to be the nub of the story. Rangers seems to have persuaded HMRC its tax conduct wasn’t sufficiently culpable to attract a penalty. But HMRC doesn’t seem to accept it assessed Rangers to the wrong amount.”

READ MORE: Rangers vs HMRC: Fans react as taxman 'overestimates club's bill by up to £50million'

Asked if he believed HMRC would be liable to pay compensation as a result of their original miscalculation, Maugham replied: “I’m not sure it is even theoretically possible to sue HMRC. But it would take an awful lot more than getting the number wrong.”

The Evening Times understands that the issue only came to light after the taxman started sending out the full EBT tax assessments.

It is also believed that BDO and HMRC are yet to start negotiations on how this “blunder” happened and bring thev value of their claim down.

If the negotiations fail to reach agreement, it is believed it could go to mediation and then ultimately the law courts.

Executives in charge of Rangers before it was sold by Sir David Murray believe that the size of the potential EBT debt had put off potential buyers of the club – paving the way for a sale for £1 to Mr Whyte in May 2011 and the financial collapse nine months later.

At the time, executives feared a “nuclear missile” £50m bill if they were landed with the EBT bill and were so worried  they took advice.

Fans have criticised the development.

Former club director Chris Graham said: “No chance this was a mistake. 

“Throughout this entire saga those with agendas have shown themselves to be willing to set aside any professional ethics they ever possessed.”