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Why did Rangers go bankrupt?

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The bankruptcy of Rangers Football Club in 2012 was a significant event in Scottish football history. You can now visit 1xBet - your sports betting can also be made in Scottish football too.

It is rooted in 3 main factors:

  • financial mismanagement;
  • tax disputes;
  • and economic downturns.

Rangers' financial troubles began years before the eventual liquidation. The club, seeking to maintain dominance in Scottish football and compete in European competitions, engaged in heavy spending on player transfers and wages. Right now you can make your sports betting with 1xBet on matches of the modern Rangers club too.

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During David Murray's ownership (1988-2011), Rangers enjoyed considerable domestic success, winning numerous league titles. However, this success came at a price. By the early 2000s, the club had accrued substantial debt, estimated to be around £80 million by 2004.

Accounting issues

One of the critical issues that precipitated Rangers' financial collapse was their use of Employee Benefit Trusts (EBTs) to pay players and staff.

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From 2001 to 2010, Rangers utilised EBTs to provide tax-free loans to employees, a scheme that HM Revenue and Customs (HMRC) later challenged.

This case, known as the "Big Tax Case," argued that these payments should have been subject to income tax and National Insurance contributions. By 2011, the potential tax liability, including penalties and interest, was estimated to be around £49 million.

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The unthinkable happens

In May 2011, Craig Whyte acquired Rangers for £1 from David Murray. Whyte claimed he would address the club's debt issues and invest in its future. However, Whyte's tenure was marked by further financial irregularities.

He sold future season ticket revenues to secure a £24 million loan from Ticketus, which was meant to pay off Rangers' debts. Instead, much of the money was used for other purposes, exacerbating the financial crisis.

At the website you can make wagers on the current Rangers matches too.

By early 2012, Rangers were struggling to meet their financial obligations. The club entered administration in February 2012, unable to pay around £9 million in unpaid taxes.

The administration process aimed to keep the club afloat while restructuring its debts. However, the extent of the financial mismanagement and the looming tax liabilities made it impossible to find a viable solution.

A new club emerged from the ashes, and it is featured at the 1xBet site.

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