From: Gary Withey <gary.withey@collyerbristow.com> Date: 25 August 2011 To: Kevin Higgins <Kevin.Higgins@saffery.com>, William Lee <William.Lee@collyerbristow.

com> Cc: Julian Hedley <Julian.Hedley@saffery.com>, Peter Hackleton <pete.hackleton@saffery.com>, Craig Whyte <ctw@libertycapital.biz>

Kevin, I have authority to instruct in my position of Company Secretary of Rangers FC plc. Please accept this email as such authority. With regard to the VAT the club will need to reach an agreement with HMRC to pay over a term. I am not entirely up to speed with the cash flow but if they had the full amount I guess that I would not be asking for your assistance. At this moment in time the assurance will be that an amount of vat will be paid. The club has, so far as I am aware never been late in paying vat previously. Did you have any views on the service companies and when we can get a vat registration for them? Regards Gary Withey Partner T (Direct) +44 (0)20 7468 7234 F (Direct) +44 (0)20 7468 7334

From: Kevin Higgins [mailto:Kevin.Higgins@saffery.com] Sent: 25 August 2011 To: Gary Withey; William Lee Cc: Julian Hedley; Peter Hackleton Subject: RFC Gary/Will I have just received another call from Mr [Redacted] at HMRC on the subject of Ticketus/VAT. He was enquiring as to the progress of matters since yesterday. I told him that we had been appointed to deal with the matter and advise but that I had not yet received all the documentation to enable us to do so. I asked him whether he could send me copies of the papers he had obtained from Ticketus so that I could see that we are all looking at the same paperwork and to my surprise he did not reject my request but said that he would have to consider it. I suspect that his superiors will veto the idea but, assuming for now that he is allowed to send us the documentation, he would want confirmation from RFC that it is in order for him to transmit the documents by email (this is a routine HMRC security issue). Can you please obtain the necessary clearance from whoever is the appropriate officer at RFC and get them to email me today confirmation that they are content for HMRC to send me documents relevant to the Ticketus VAT issue by email. If [Redacted] is authorised by his management to send me copies of the papers he holds, I will then forward the email I receive from RFC giving him clearance to do so. He also told me that he had information to suggest that the Ticketus monies had been paid into a client account held by Collyer Bristow (I assume this came from Ticketus) and he observed that he would like to know that the money was still there in order to pay the VAT.

He is looking for clarity as to what is the correct position, to the submission of a correct VAT return and to payment of the VAT on time. What assurance can we give him with regard to the payment of the VAT that is due next week (whatever the correct amount proves to be)? Regards

From: Gary Withey <gary.withey@collyerbristow.com> Date: 26 August 2011 To: David Grier <DGrier@mcr.uk.com> Cc: phil.betts@virgin.net, Craig Whyte <CraigWhyte@rangers.co.uk>

This is the information we need. I am not sure what the current vat arrangement is with the club. Who would have this information. It seems at the moment the best that can be achieved is a time to pay arrangement. Once that is in place then we need to get the various non group vat registrations in place. Holdco should itself have a vat registration as should the new asset cos. Regards Gary Withey Partner T (Direct) +44 (0)20 7468 7234 F (Direct) +44 (0)20 7468 7334

From: Gary Burnes [mailto:Gary.Burnes@saffery.com] Sent: 25 August 2011 To: Kevin Higgins; Gary Withey Cc: Peter Hackleton; Julian Hedley; William Lee Subject: RE: RFC Gary This is to summarise the position regarding VAT issues covered in recent e mails 1.CURRENT VAT RETURN ; URGENT We are awaiting copies of the VAT invoices which we understand have been issued by Rangers to Ticketus, during the current VAT return period. It is absolutely critical that VAT charged on these invoices is included on the VAT return. If you have not already done so, I would recommend that you ensure that the person responsible for submitting the VAT return ( presumably the Financial Controller ) is aware of this . If the invoices are not included on the return, penalties of up to 100% of the tax due on those invoices could be charged. 2. TIME TO PAY I assume that the VAT return due is for the period to 31 July 2011 ( please confirm). I also understand that Rangers may be on the monthly payment on account scheme whereby they pay a fixed monthly amount in the first two months of each quarter and a balancing payment when the return is submitted . So the amount due may be the balancing payment.?

If any previous VAT returns/ monthly payments have been submitted /paid late, then default surcharges may be imposed , which can range between 2% and 15% of the VAT due, depending on the extent of the defaults. However, if a payment arrangement is agreed BEFORE a payment is due, then HMRC can agree not to impose default surcharges.

In order to negotiate a settlement, the following details would be required 1. VAT return periods/ The actual VAT liability on the return and payment outstanding / details of any monthly payment arrangements 2. The details of any arrangements that Rangers has with HMRC for delayed payment of other taxes 3. The amount that Rangers is able to pay now 4. A proposed payment plan for payment of the remaining amount due 5. Commitment to submit the return on time 6. Any arrangements need to take into account any need to delay future payments as they become due.

If provided with these details we could contact the HMRC Business Payment Support Service on 0845 302 1455 to make proposals on behalf of Rangers. However, it may be more practicable for this to be done by Rangers directly. If you do require our assistance, we would need the above information ASAP

3 HMRC ENQUIRIES As you know, we have the added complication of the separate enquiries raised by HMRC and, if you agree, I think we need to clarify with the officer who contacted us that the correct amounts of VAT will be declared on the VAT returns and explain why Rangers are not in a position to pay the VAT in full. Otherwise, this may prejudice any attempt to agree time to pay. There is also a concern ( as per our notes ) in relation to the responses made to HMRC enquiries I would suggest you call me to discuss this point, before we make any contact with HMRC. 4. SERVICE COMPANIES If the service companies are controlled by a member of the existing Rangers VAT group registration ( or the company that controls that group ) they could apply to join the VAT group. The advantage being that supplies within a VAT group are disregarded so there would be no VAT cashflow cost. Otherwise, they can apply for separate registration. A VAT registration currently takes up to three weeks to obtain. VAT invoices can not be issued until a registration is agreed . If the service company was to invoice for services for the forthcoming year, VAT would be due upfront on the full amount on the VAT invoice We can assist with applications if required. Please call me on 020 7841 4057 if you need to discuss any of these issues further Regards Gary

From: Kevin Higgins Sent: Thu 25 August 2011 To: 'Gary Withey' Cc: Peter Hackleton; Julian Hedley; Gary Burnes Subject: RE: RFC Gary Thank you for your email. My colleague, Gary Burnes, who is a VAT specialist, will be in touch with you shortly with regard to the VAT registration matter and indeed the overall position concerning the VAT return and payment that is required next week.

Regards

From: Kevin Higgins <Kevin.Higgins@saffery.com> To: Gary Withey Cc: Gary Burnes <Gary.Burnes@saffery.com>; Peter Hackleton <pete.hackleton@saffery.com>; Julian Hedley <Julian.Hedley@saffery.com> Sent: Fri Aug 26 2011 Subject: RFC Gary I have just received my daily call from Mr [Redacted]. He told me that he had sent you copies of the determinations (I did not tell him that I had already got them). If he sends you any papers that I have not already been sent will you please forward copies. We discussed the basis of the assessments - apparently, they were not based on Donald McIntyre's figures but rather the amounts were treated as received when payment was guaranteed in the side letters. I will check this. He mentioned the Court proceedings today on which I refrained from comment save to say that Safferys were not engaged in that action. As regards the VAT return, I simply said that I was sure that the VAT return would be correct when submitted. [Redacted] asked if I could tell him what figures would be on the return and I said that I could not at this stage. He also asked of the whereabouts of the monies received from Ticketus again I had to say that I do not know. He said that he was about to call you and that he would ask you these questions. Regards

From: Gary Withey <gary.withey@collyerbristow.com> Date: 26 August 2011 To: Kevin.Higgins@saffery.com Cc: Gary.Burnes@saffery.com, pete.hackleton@saffery.com, Julian.Hedley@saffery.com, ctw@libertycapital.biz

Kevin, do you agree with the figures? Regards

---------From: Kevin Higgins <Kevin.Higgins@saffery.com> Date: 26 August 2011 To: Gary Withey <gary.withey@collyerbristow.com> Cc: Gary Burnes <Gary.Burnes@saffery.com>, Julian Hedley <Julian.Hedley@saffery.com>, Peter Hackleton <pete.hackleton@saffery.com>, Craig Whyte <ctw@libertycapital.biz>

Gary

Income tax Re Tore Andre Flo Unless we can come up with an ingenious argument to the effect that the payments referred to in the side letter dated 23 November 2000 as "net" did not mean "net of tax", and that the payments should not therefore be grossed up, I cannot see any basis for disputing the income tax determination for Tore Andre Flo.

Re Ronald de Boer I cannot find amongst our papers a copy of the side letter dated 30 August 2000 to which McCurrach refers in page 2 of his letter.. I need to see that letter. Can you supply it? - if not, I will get McCurrach to send me a copy. Also, the payments listed at the foot of the letter do not correspond with a schedule of payments I have on file (which is marked as having been provided to HMRC by Mike McGill on 21 March 2011. I need to be clear exactly what payments were made and when. All of the determinations have been raised outside the normal time limits but, given the previous nondisclosure of side letters (I assume it is accepted that there was a failure to disclose) it will be practically impossible in my view to argue that the assessments should be set aside.

National Insurance Contributions

The determinations do not show a computation of the amounts charged, simply a stated figure, and, on the face of it, appear to me on a rough calculation to be too high. I will have to ask HMRC for an explanation/computation next week. Any arguments that we can come up with in relation to income tax (for instance to the effect that payments should not be grossed up) would potentially affect the NI charge too. I also want to consider further whether the extended time limit rules apply in the case of NI.

So, at this stage, I don't rule out the possibility that we may be able to challenge some of the assessments to some extent. Nor, however, do I want to raise hopes too high. Regards

From: Gary Withey [mailto:gary.withey@collyerbristow.com] Sent: Fri 26 August 2011 To: Kevin Higgins

Cc: Gary Burnes; Peter Hackleton; Julian Hedley; ctw@libertycapital.biz Subject: Re: RFC

---------From: Gary Withey <gary.withey@collyerbristow.com> Date: 26 August 2011 To: Kevin.Higgins@saffery.com Cc: Gary.Burnes@saffery.com, Julian.Hedley@saffery.com, pete.hackleton@saffery.com, ctw@libertycapital.biz

Kevin, Thanks for this. On what basis can we argue payments should not be grossed up? Any argument would be very difficult given the substantial time delay in making these determinations. Why are they not time barred being in respect of a time ten years ago?

Regards Gary Withey Partner T (Direct) +44 (0)20 7468 7234 F (Direct) +44 (0)20 7468 7334

From: Craig Whyte <ctw@libertycapital.biz> Date: 26 August 2011 To: Gary Withey <gary.withey@collyerbristow.com>

I think we need to try any argument we can if only to buy time. Sent from my iPhone