From: David Grier <DGrier@mcr.uk.

com>
Date: 4 August 2011 15:44
To: "phil.betts@virgin.net" <phil.betts@virgin.net>
Cc: "ctw@libertycapital.biz" <ctw@libertycapital.biz>, "gary.withey@collyerbristow.com"
<gary.withey@collyerbristow.com>, Michael Bills <MBills@mcr.uk.com>, Oliver Rimmer
<ORimmer@mcr.uk.com>

Phil,

Can you confirm that you can make this proposed meeting with HMRC on 22 August 2011.

We had a follow up conference call with HMRC this morning and need to advise you of the following
important points:


1. Cash Flow Forecast

HMRC have received a 'base case' cash flow forecasts which confirms that without Champions
League income the club has a significant cash requirement from September 2011.

We agreed to discuss the possible impact on other European competition income, however even with
this the club would require shareholder funds /and or equity/ finance to support a solvent cash flow
beyond September 2011.

2. Prepayment Proposal to HMRC

HMRC have again questioned why there is no provision for repayment of the now c4.2m liability
within the base case cash flow and also noted that the club has purchased players, while no
repayment have been made/proposed to HMRC.

We have not commented on the potential to appeal the penalty charge of c1.3m included in the
above HMRC liability.

We have however confirmed that shareholder funds are required to support a repayment proposal
and noted that we are unable to confirm the availability of shareholder funds.

3. Potential Enforcement Action

HMRC have expressed disappointment that no repayment has been made toward the current liability
and commented that they expect a significant initial payment to be made ahead of the proposed
meeting on 22 August 2011.

I have already noted that HMRC have applied to Glasgow Sheriff Court for a summary warrant and
this enforcement instrument will be granted within the next 7 days.

I have discussed separately with Gary the potential enforcement remedies that would be available to
HMRC.

One significant point that was made during the conference call with HMRC is the potential for 'data
leakage' via this court process, which in turn may create speculation and press comment.

4. PAYE Audit

HMRC are conducting a PAYE audit on Monday 8 August 2011. We have informed Claire Rinks at
the club.

Given the above issues I believe that it is important that we set a date to discuss as soon as possible.

Regards,

David
David Grier
Partner
MCR
43 - 45 Portman Square
London W1H 6LY

Office: 020 7487 7240
Fax: 020 7487 7299
www.mcr.uk.com

From: HMRC [Redacted]
Sent: Thursday, August 04, 2011 10:26 AM
To: David Grier
Cc: HMRC * 3 [Redacted]
Subject: August Meeting




David

I'm available to meet on the 22nd of August. Will this be possible for your side please? Also HMRC
colleagues will be available for this meeting, so it is best available date

Look forward to hearing from you

Regards


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From: <phil.betts@virgin.net>
Date: 4 August 2011
To: David Grier <Dgrier@mcr.uk.com>
Cc: Craig Whyte <ctw@libertycapital.biz>, Gary Withey <gary.withey@collyerbristow.com>, Phil Betts
2 <phil.betts@virgin.net>

How are we dealing with the VAT owed to HMRC under the Ticketus agreement?

Regards
Phil
Sent from my BlackBerry wireless device