Ibrox Stadium, home of Glasgow Rangers Football Club
Ibrox Stadium, home of Rangers Football Club Reuters

Rangers have moved one step closer to liquidation after it was revealed that the taxman will reject the club's Company Voluntary Arrangement proposal.

The news of the rejection was confirmed by Charles Green, the prospective owner of the club who has been leading the Sevco consortium attempt to acquire the club.

HMRC, which is owed more than £21m by the club, will not accept a CVA, which would see a small percentage of the money repaid as a compromise. Tax assessors believe that forcing Rangers into liquidation will allow them to pursue individuals for the debt.

Green now looks set to buy the club's assets for £5.5m and reform the club as a "newco".

The 11 other SPL clubs will vote on whether a newco Rangers should be allowed to compete in the top tier.

A new Rangers will be unable to compete in Europe for the next three years, under Uefa rules.

Green said: "I do not see what benefit will be achieved by [the taxman's] decision.

"I can understand HMRC deciding that football clubs which do not pay their taxes need to be punished but by effectively banning Rangers from Europe for three years all that will happen is that there will be less revenue generated by the club and consequently less money paid over to the taxman.

"Also, I do not believe that by opting to vote against the CVA proposal, HMRC will generate more cash by pursuing those they believe as responsible - but that is a matter for them."

Green said he would explore ways of allowing the club's 26,000 shareholders to buy into his new company. He reassured fans the club will continue as Rangers Football Club and play at the Ibrox stadium.

Duff and Phelps, administrators of Rangers Football Club, issued a statement saying: "We have been informed by HMRC they will not support the proposal for a Company Voluntary Arrangement at the meeting of creditors on Thursday, June 14.

"As a result of this decision, the Sale and Purchase Agreement in place with the consortium led by Charles Green will take effect and Rangers Football Club will continue within a new company structure.

"The reasons HMRC have given to us for their decision to vote against the proposal are as follows: HMRC has cited its general policy of not agreeing to a CVA where there is strong evidence of non-compliance by a company with its tax liabilities.

"HMRC has taken the view that the public interest will be better served with the liquidation of The Rangers Football Club plc as a corporate entity.

"HMRC considers that the decision will enable a liquidator to instigate a wider investigation into all of the financial affairs and management of the club in recent years and to bring to task those they believe are responsible for its collapse.

"Furthermore, HMRC believes there will be an enhanced recovery of funds for creditors by pursuing those individuals who they believe are responsible.

"Administrators have a primary objective to ensure the survival of the company and in this case, this would have been achieved through a CVA. It was with HMRC's approval that a proposal was placed before creditors for consideration. However, it is the commercial view that the level offered within the CVA was not enough to merit departure from their normal policy of seeking a detailed investigation via a liquidator.

"However, we have been left in no doubt by HMRC the fundamental reason for the rejection of the CVA proposal is the historical non-compliance with tax liabilities by the former owners and directors of the club."

Rangers Football Club Heading For Liquidation IBTimes UK