The Murray Group and Rangers FC (1872-2012) were today found guilty of using Employee Benefits Trusts (EBT’s) that broke tax rules between 2001 and 2009.
The Lord Justice Clerk, Lord Carloway, along with Lord Menzies and Lord Drummond Young, heard that in the tax years from 2001/02 to 2008/09 the companies entered into a series of transactions as part of a scheme designed to avoid the payment of income tax and National Insurance contributions (NICs) in respect of their employees, which resulted in assessments by Her Majesty’s Revenue and Customs to income tax under the Pay As You Earn (PAYE) system and corresponding NICs.
The judges observed the “fundamental principle” that emerged from previous cases was clear: “if income is derived from an employee’s services qua (in their capacity as) employee, it is an emolument or earnings, and is thus assessable to income tax, even if the employee requests or agrees that it be redirected to a third party”.
Delivering the opinion of the court, Lord Drummond Young said: “That accords with common sense. If the law were otherwise, an employee could readily avoid tax by redirecting income to members of his family to meet outgoings that he would normally pay: for example to a trust for his wife…or to trustees to pay for his children’s education or the outgoings on the family home…The funds are ultimately derived as consideration for the employee’s services, and on that basis they are properly to be considered emoluments or earnings.”
In relation to footballers, when a contract of employment was concluded, an additional side-letter provided for a discretionary trust payment and the amount of any bonus was typically negotiated by the footballer’s agent as part of his overall responsibility for securing “proper remuneration” for the player’s services.
Lord Drummond Young continued: “It seems to us to be self-evident that the obligations in the side-letter were part of the employee’s employment package, and provided him with additional remuneration. They were negotiated as part of the total employment package…Once it is accepted that the bonus payments represented consideration for a footballer’s services qua employee, it inevitably follows that those payments represented emoluments or earnings of the footballer in question.
“Furthermore, so far as the footballers are concerned, at least, it seems to us that if bonuses had not been paid they might well have taken their services elsewhere. The law is clear: payments made in respect of footballers were in our view derived from their employment and thus the payments were emoluments or earnings.”
Today’s ruling is a victory for common sense with justice prevailing, albeit questions should be asked why it took two further HMRC appeals at considerable public expense to finally find in HMRC’s favour. It was clear a tax avoidance scheme was in operation and was used to entice players to Rangers the club could otherwise not have *afforded. The confirmation of side-letters playing a key part in the tax avoidance scheme also looks certain to see a further challenge to the Scottish Football Association regarding trophies won by Rangers during the period 2001 to 2009. A previous enquiry was conducted under a different terms of reference by Lord Nimmo-Smith, who determined that while Rangers (1872-2012) were guilty of breaking the rules, decided that a £250,000 fine and no historical stripping of titles was sufficient. Today’s victory for commons sense is a game changer and will ensure a clamour for a full and open revisit of the case as rules clearly state that side-letters are not permitted.
For the record a team found guilty of fielding an ineligible player are penalised by being given a 0-3 defeat by footballs governing bodies. With an ineligible Rangers player involved in every League, Cup and European match during the 2001-2009 period and the EBT / side-letters position clarified today by the law courts it marks that 9 year period down as quite probably the most unsuccessful in the old clubs 140 years history.
The fact Campbell Ogilvie, a recipient of an EBT from Rangers to the value of £95,000 is no longer part of the SFA, should ensure a revisit of the dual contracts investigation is conducted without a complicit and/or guilty party having a foot in both camps…..
Putting aside for one second Sir David Murray’s £6.3m tax-free ‘windfall’, below is a list of some of the players who gained most from non-payment of taxes via being party to an EBT scheme.
Barry Ferguson – £2.5m
Stefan Klos – £2.0m
Dado Prso – £1.9m
Tore Andre Flo – £1.3m
Thomas Buffel – £1.2m
Ronald De Boer – £1.2m
Nacho Novo – £1.2m
Craig Moore – £1.1m
Claudio Cannigia – £1.0m
Paolo Mendes – £1.0m
Jean-Alain Boumsong £630,000
The list of EBT beneficiaries is contained here:
http://www.bbc.co.uk/news/uk-scotland-glasgow-west-34118126
*Point of note…..the full list of EBT beneficiaries was not published. We can only hazard a guess at some of the very well known players/coaches who will also be named in due course.
Cheating! Plain and simple. Titles and cup successes MUST be removed from the record books.
Totally agree 67…..The question must be asked….in any other sport running,cycling,gymnastics….titles are deducted or stripped….from there governing body…..Will the SFA , do the right thing…..Don’t hold your breath….
INTEGRITY…..SFA…….PROVE IT….
And what makes the EBT decision even better is that because HMRC are now a bigger creditor it leaves the likes of King with a lower creditors payout from the pot. Haha
I’ll leave Hector to sort out the tax dodgers…
but Scottish Football must now address the complicit handling of this by members of the SFA.
As a body they are now duty bound to revisit this scandal..
and revise results where appropriate.
Nothing less than full transparency…followed,hopefully,by resignations..will be acceptable.
We are watching you…and waiting.
I’m aware that there is an appeal process that can be utilised by Rangers Oldco…but the smart money says they won’t take it up.
I remember, when the original verdict was given that Oldco supposedly had ‘won'(!), we were treated to the boak-indicing sight of that racist, homophobic spunk bubble Chris Graham on the Scotland Tonight programme with the smuggest, most self-satisfied grin on his fat coupon proclaiming a victory and taking aim at the ‘haters’. Wonder if we will be treated to the same spectacle on said show tonight….
if they continue to insist that they only gave ‘loans’to these people,then why don’t the people who are owed monies go after the individuals concerned?surely worth considering.
Cheating on an industrial scale!
The loud noise you hear is the stampede of E.B.T. recipients rushing to repay their “loans”, or was it simply the sound of the peeeple having a desperate synchronized flush.
What the late Hugh Adam (and former Rangers Director) had to say about EBT’s..
Mr Adam states, when discussing alleged “secretive payments to players which were not in their contracts:-
“They weren’t included in the contracts. They definitely weren’t. That was the whole point of them.
‘If they’d been included in the contracts, they would have had to have paid tax on them.
‘I don’t think a lot of the other directors knew an awful lot about it. David Murray kept everything to himself.
“When I was on the board, I knew all about them. I just didn’t know the details of them. They became accepted. The revenue were seriously challenging them at that point when I was a director.
“All the directors heard about them but didn’t take them seriously because they didn’t appear in the books. People didn’t want to know about them. There was a lot of that (EBTs) going on at the time (I was there).
‘You knew it was cheating but some of them not only hoped but believed it was above board. It was just something that crept up. It was considered important but not crucial. The fans didn’t give a damn one way or another.
‘When I was asked for my opinion on the way the club had been run, I said it was quite obvious how it had got into trouble. They were doing things they shouldn’t have been doing.
‘They (EBTs) were always regarded in my time as a bit of a joke. They were getting away with it but nobody really thought they’d get away with it forever. ‘
‘The players were very naive. Few of them were the Brain of Britain, of course. If they get the money, they don’t give a damn where it’s coming from.’
Say’s a lot Charlie, doesn’t it?
Never seen anything like this in football in Scotland!
It does indeed but I reckon you are going to see some shite in England pretty soon as HMRC turns it’s focus on teams down here.
We are talking megabucks bud.
Reporter on STV News confirmed that they will NOT lose any Titles or Cups due to the Legal decision handed down by LNS.
It is also suggested that Hector won’t go after individuals who benefited. ?
I have to ask therefore…
What was the fucking point ?
Whaur’s ma post…?
” The law of common sense” , they cheated and their titles need scrubbing
A phantom tax case perhaps….
Even funnier and more astounding than the huns being caught cheating her majs government out of their dough is the BBC reporting of it. Rangers DUBIOUS TAX WHEEZE???!! Brethren broadcasting corporation then go on to say the SUPPOSED unfair advantage annoyed Celtic fans!! I must try the old not paying my fuckin TV licence Wheeze,see if alls so whimsical. And of course only Timmy was miffed by this massive fraudulently gained sporting advantage,the rest of Scotland were right behind ra peepil, heads bowed in defference. BBC, BILLYS BEEN CAUGHT!!
“common sense”. the thing that I find hardest to believe tonight and which this article, very good BTW, is the first to address is:
why did it take until a second appeal for what seemed the most blatant, cack handed tax avoidance scheme you could hope to uncover if you’re the taxman (side letters! Forget smoking guns, this was a twelve gun salute) took so much time, legal minds and experts and money to be decreed to be so?
Today feels good though, a good cheeky wee court win, vindication for common sense and rangers tax case and removing of a key leg on the stool of the “what was done to the rainjurrs” mob.
Common sense was never something they were on very good terms with
RTC and Dr Heidi Poon (withering dissenting opinion from the FTT) totally vindicated
http://rangers.co.uk/news/club/club-statement-55/ …… “Nothing to do with us. Nothing to see here. Move along please”
You know why it took so long? LEGALISM. Lord Doherty hang your head in shame. Point scoring, arguing minutiae, trying to be clever. Lord Doherty trying to be too neutral like tim referees, tim pundits etc.
At the end ‘common sense’ and ‘self evidencey’ prevailed. Deo Gratis.
Gratias
I have heard anecdotally from a Celtic shareholder that Celtic were aware way back in the nineties what was going on at Ibrox. Celtic looked at using EBTs themselves and decided it was illegal and would catch up with our cousins from Govan eventually. Apparently, Celtic knew that Rangers were going bust about 20 years before it happened.
Trying not to laugh but its hard. We could do with some decent honest competition. Come on Aberdeen, Hearts and the rest.
Hail, Hail!!
Great aricle that says it simply and clearly: They fekkin cheated. Tried to share this with my millions of adoring followers but the link didn’t come out quite right. A glitch in the system?
There needs to be a concerted, co-ordinated campaign to let the SFA and every club in Scotland know the the fans will not accept there being no stripping of titles illegally won by the old rangers.
A marker has to be laid down that Scottish football is clean and cheats, whether dead or alive, will be punished.
As much as i have enjoyed watching them go down, it seems the only way to ensure this doesn’t happen again is to restart Scottish football from the ground up. One governing body, no affiliations and transparency. It’s no wonder people are getting fed up with football, if you are not being kettled outside, you are being cheated inside. Will I see it in my life time, I would love too but my head says nothing is going to change, unless every fan in this country stands up and says enough! Our game is struggling, on life support even. most teams have sorted themselves out, but what is the point when others are allowed to write their own rules and continually drag our games image through the mud.
Rangers cheats and their complicit pals at the SFA are making Scottish fitba a perennial laughing stock.
All the while the media do their damnedest to make it seem done and dusted and in the past.
Sickening to be a Scottish fitba fan today.
The thing that sickens me about this is the fact that the media is reporting this as “softly” as they can. The facts are there, undisputed and exposed to daylight, yet not one churnalist has given his opinion or suggestion. They just talk (and joke) about fans on phone-ins or Twitter saying this or saying that. If it was us that had been found to have cheated the Taxman and Scottish Football they’d be DEMANDING heads to roll for the damage done to the image of Scottish football. They would be using appropriate vocabulary like “cheating, tax avoidance, deliberate non-payment of dues to the Crown, shameful trickery and hypocrisy, illegal payments, etc etc”…but not one of these men of the free (Mason) press has denounced or criticized a single member of the board responsible or the beneficiaries of the tax dodge who have been treated like honourable men.
The job of a free press is to investigate, report and demand action, to put the facts out into the public domain, not to water down a scandal and treat certain “peepul” with kid gloves.
They totally give me the boak..this is the biggest scandal in British sport at the moment but our reporters prefer to whitewash it and turn a blind eye just like the SFA.
Dirty fekking corrupt, dishonest, ignorant, inept, useless cowards that they are….the propaganda wing of the Scotland’s Shame.
BTW
Question: I wonder how many of those HYPOPPYCRITES who frequent £1brokes will pause for a second to ponder how many of their beloved Armed forces were killed/maimed due to inadequate equipment caused by funding cuts, which their ex-club’s missing Tax & NIC’s could have helped alleviated? ….
Answer: No not one and there never shall be one
4-0 to the hoops tonight leigh to get that hatrick COYBIG
fucking dsgraceful i dont know whats going on up there but some of them need a swift boot in the baws
that fucking team sold us out tonight
what a load of shite!!!!
good on molde
Really Charlie: good on Molde?? ya pernicious numpty.
blaw ma trumpet
Deila no clue – please leave now. Charlie Saiz please don’t give me your shite again! 15 minutes at half time is the managers time to sort things out. That 2nd half performance was the worst ever. please leave now so we can get some pride back
LAWWELL GTF VERMIM
Bye bye Ronny
Hells bells and buckets of pish! But don’t worry bhoys as we will give those wee laddies from the village of Dingwall ( population 5,491 ) a proper going over this Sunday!
hun
Charlie saiz there’s no defence if you back this clown then all hope is lost. He has now lost more European games than he has won. Embarrassing. Biton to centre back????????????? Wow
Very poor tonight no defence of the management team from me on this showing but Biton to Centre back was not my main problem . Blackest on the bus to Manchester tomorrow, Boyata join Effe out the door at Xmas Two new centre backs in January sales no LOANS ,buy them!! Go down the divisions in England there must be DEFENDERS there somewhere.. We have the nucleus of a team there Gordon /Bailley. Lustig Tierney Biton Rogic Brown Griffiths Commons – jury out on Cifti Cole Johansen . New boys Allan Christie etc no criticism yet. We just do not defend the centre properly and our defenders all think they are footballers first WRONG!!! They are ripping the guts out of our midfield and forwards.
Blacket Sorry mispell ! Not trying to be funny , not the night for it.
Indefensible , see what I did there!!! Kieran Tierney reminded me of Danny McGrain tonight .
celtic you hurted ma heart
KT WAS OUTSTANDING! JUST THE ONLY SHINING LIGYT, AND MAYBE RONNIE RESIGNINGING TOMORROW!