As Rangers faces potential liquidation, Alex Thomson reveals the extent of transactions and payments made from offshore accounts that have so interested the taxman.

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Celtic fans might want to cover their ears for this next bit, but Rangers are - arguably - the biggest club in Scotland and without question one of the biggest in the UK. Their fan base unquestionably global, and loyal. But right now that very loyalty must surely be stretched to near breaking point.

For Rangers FC is staring into the abyss of potential liquidation. If they fail to win their current appeal to a tax tribunal a bill of almost £50m from the taxman awaits.

The club - already in administration due to accrued debts away from all this, is something of a financial and footballing car-crash. Points have been deducted. The championship is heading to Parkhead and Celtic, and that is it for football this season pretty much.

But it could be a great deal more serious than that. Rangers does not have a buyer at the moment, let alone someone willing to stump up £50m which currently just ain't in Ibrox, search where you will.

No sign of that Gulf sheikh or Russian billionaire oligarch coming up the Clyde bearing gifts and buying the club, either.

To find out how they got into this state it might be useful to go to that well-known Glasgow suburb - Weybridge, Surrey. Here, in a gated community, lives none other than Paul Baxendale-Walker, the man who claims to have invented the employee benefits trust (EBT): the financial arrangement which might spell doom soon for Rangers.

Surrey might not be the obvious place - Mr Baxendale-Walker not the obvious person. A former solicitor, now struck off, he still advises upon taxation issues whilst also running an adult TV channel.

So what of the EBT?

Paul Baxendale-Walker told us this: "Somebody obviously advised Rangers on the constitution of this employee benefits trust. And what that somebody would have to have done is refer to my book or at least referred to the principles in it. And then Rangers as a company went and did something else. This is why there is a tax case."

He says he merely introduced the EBT concept to Murray International Holdings (MIH) - Sir David Murray's company, who owned Rangers from 1988 to 2011.

Read more: Alex Thomson blogs on Scottish football in turmoil

The legality of the EBT

The EBT is perfectly legal. Several thousand firms use them across the UK. But equally those firms have recently been contacted by HMRC to effectively say; "please come in and see us for a cuppa and the nicely-nicely - before we come round to your front door and do nasty-nasty."

Why? Because the taxman reckons they are really about tax avoidance and possibly even evasion, slipping the wrong side of the law.

Basically what they do is allow highly-paid staff to get money in loans from an offshore trust based in a tax haven, instead of getting it PAYE with 50 per cent income tax.

In his letter, Martin Bain says it was suggested to him that "...any pay rise I got should be paid through the trust, obviously as a discretionary bonus as it cannot be contractual."

Of course the loan must be paid back in time - but how much time? In some quarters they're dubbed 'lend and forget' deals.

So to Rangers. Well we know a little bit more after the latest turn in the Channel 4 News investigation into the club's finances.

Their EBT was set up by Murray International Holdings. And we can now reveal that according to MIH's Finance Director Mike McGill, not one of these loans has yet been paid back.

"I do not believe that any loans have as yet been repaid," he told us.

We asked when or if these loans would ever be repaid and he emailed back: "We do not consider it appropriate to make any further comment at this juncture."

News

For the first time Channel 4 News can take you inside Rangers during the time of the tax dispute in the early years of this century. Documents we have seen from Rangers executives reveal the extent of their use of the trust payment system. It is not for us to say this was wrong or right, legal or illegal - that's for the tax tribunal in the coming days.

We can disclose that the former chief executive of Rangers, Martin Bain, was offered £100,000 bonus from the trust in 2005.

We have seen a document which says: "...please pay Martin Bain £100,000 through the remuneration trust in respect of his bonus for the financial year to June 30, 2005."

We've seen a document which says: "...please pay Martin Bain £100,000 through the remuneration trust in respect of his bonus for the financial year to June 30, 2005."

Not only that, but just one month later in July 2005 in another document, Martin Bain requests from The Murray Group Management Trust in Jersey a further loan of £100,000 "as soon as possible for the purposes of investment".

These are the kind of things which have excited the interest of the taxman.

In what could be a key document in the tax dispute, Martin Bain, when he was a director at Rangers, wrote to Chairman John McClelland on December 18, 2003. It is strongly worded - he asks that his pay rise be paid through the club's trust.

In his letter Martin Bain says it was suggested to him that "...any pay rise I got should be paid through the trust, obviously as a discretionary bonus as it cannot be contractual..."

A suggestion which would have made a big reduction in his tax bill.

Widespread practice?

But this isn’t just about Martin Bain. He was just one of many benefiting from this tax scheme. As he says himself: "...my increase was to be non-contractual put through as a discretionary bonus as I do with players. Coaches and more recently John Greig."

So it was far from just Martin Bain - Rangers players were getting the trust's tax-free payments. Rangers coaches. And John Greig, Rangers legend and former director. This indicates just how widespread the trust scheme was being used across Rangers with already high earners making significant tax savings.

And then, in the document we have seen, yet more startling information. Martin Bain writing to Rangers Chairman John McClelland, says that his contract letter from McClelland, would be destroyed, shredded, by a female official at MIH - the company which owned Rangers. Martin Bain wrote: "at the end of the meeting I gave her back the letter addressed to me from you that stated my contractual increase for her to shred."

Now what they were doing could well be perfectly legitimate but it’s questions like these upon which the tax case may hinge.

Rangers's legions of fans want answers. For the taxman this is a test case. For Rangers it is about the club's very survival. But fans may well question whether a high price has been paid for attempting to make tax savings at their club.