UP to £50 million is reportedly set to be wiped off Rangers' tax bill after HM Revenue & Customs admitted it had claimed for too much.

According to a report in the Times newspaper, a mistake by the taxman is now being blamed for the Ibrox club's financial meltdown.

The newspaper says it is now believed that the outstanding bill for using an offshore trust to pay Rangers players and staff is likely to be £20m.

READ MORE: Rangers company once owned by Craig Whyte awarded legal costs 

The tax avoidance scheme, known as employee benefit trusts (EBTs), was in place from 2001 to 2010.

Former Rangers chairman John McClelland said confusion over the club's tax burden had deterred potential investors when the club was put up for sale in 2011, and ultimately culminated in the operating company's collapse under controversial businessman Craig Whyte - who had bought it in may 2011 for £1.

Rangers went into administration in February 2012 over outstanding PAYE and national insurance payments, and subsequently entered liquidation in June 2012.

At the time, HMRC claimed it was owed more than £90m.

It has now dropped a penalty charge worth £24m and acknowledged an overstatement in other parts of its claim which could reduce total liability to just £20m, reports the Times.

READ MORE: Ex-Rangers chief Charles Green sues police and prosecutors 

Mr McClelland said it would have been much easier to find a credible buyer if a tax bill of £20m had been agreed during his tenure.

He said: "At the time of the sale of the club in 2011, had the tax claim been at the level now being reported then, in my opinion, the outcome would have been different. I believe there would certainly have been a much higher level of interest in acquiring it and therefore more potential buyers.

The Times reports that the tax authorities pursued the former Rangers operating company tax liability for the main EBT as a gross figure rather than for only the tax that should have been paid on it.

If HMRC had only sought the net figure, the final bill would fall to around £20m, it reports.