The Murray Group and Rangers FC (1872-2012) were today found guilty of using Employee Benefits Trusts (EBT\u2019s) that broke tax rules between 2001 and 2009.<\/p>\n
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<\/strong>, which resulted in assessments by Her Majesty\u2019s Revenue and Customs to income tax under the Pay As You Earn (PAYE) system and corresponding NICs.<\/p>\n The judges observed the \u201cfundamental principle\u201d that emerged from previous cases was clear: \u201cif income is derived from an employee\u2019s 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\u201d.<\/p>\n Delivering the opinion of the court, Lord Drummond Young said: \u201cThat 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\u2019s education or the outgoings on the family home\u2026The funds are ultimately derived as consideration for the employee\u2019s services, and on that basis they are properly to be considered emoluments or earnings.\u201d<\/p>\n 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\u2019s agent as part of his overall responsibility for securing \u201cproper remuneration\u201d for the player\u2019s services.<\/strong><\/p>\n Lord Drummond Young continued: \u201cIt seems to us to be self-evident that the obligations in the side-letter were part of the employee\u2019s employment package, and provided him with additional remuneration. They were negotiated as part of the total employment package<\/strong>\u2026Once it is accepted that the bonus payments represented consideration for a footballer\u2019s services qua employee, it inevitably follows that those payments represented emoluments or earnings of the footballer in question.<\/p>\n \u201cFurthermore, 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<\/strong>. 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.\u201d<\/p>\n Today\u2019s 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\u2019s 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 \u00a3250,000 fine and no historical stripping of titles was sufficient. Today\u2019s 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.<\/p>\n 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.<\/p>\n The fact Campbell Ogilvie, a recipient of an EBT from Rangers to the value of \u00a395,000 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….. Barry Ferguson – \u00a32.5m The list of EBT beneficiaries is contained here:<\/p>\n http:\/\/www.bbc.co.uk\/news\/uk-scotland-glasgow-west-34118126<\/p>\n *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.<\/p>\n","protected":false},"excerpt":{"rendered":" The Murray Group and Rangers FC (1872-2012) were today found guilty of using Employee Benefits Trusts (EBT\u2019s) that broke tax rules between 2001 and 2009.…<\/p>\n","protected":false},"author":6,"featured_media":8067,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[],"tags":[],"jetpack_featured_media_url":"https:\/\/etims.net\/wp-content\/uploads\/2015\/11\/Murray-Ogilvie-and-Advocaat.jpg","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p2J7If-266","_links":{"self":[{"href":"https:\/\/etims.net\/index.php?rest_route=\/wp\/v2\/posts\/8066"}],"collection":[{"href":"https:\/\/etims.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/etims.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/etims.net\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/etims.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8066"}],"version-history":[{"count":1,"href":"https:\/\/etims.net\/index.php?rest_route=\/wp\/v2\/posts\/8066\/revisions"}],"predecessor-version":[{"id":8068,"href":"https:\/\/etims.net\/index.php?rest_route=\/wp\/v2\/posts\/8066\/revisions\/8068"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/etims.net\/index.php?rest_route=\/wp\/v2\/media\/8067"}],"wp:attachment":[{"href":"https:\/\/etims.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8066"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/etims.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8066"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/etims.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8066"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nPutting aside for one second Sir David Murray\u2019s \u00a36.3m tax-free \u2018windfall\u2019, below is a list of some of the players who gained most from non-payment of taxes via being party to an EBT scheme.<\/p>\n
\nStefan Klos – \u00a32.0m
\nDado Prso – \u00a31.9m
\nTore Andre Flo – \u00a31.3m
\nThomas Buffel – \u00a31.2m
\nRonald De Boer – \u00a31.2m
\nNacho Novo – \u00a31.2m
\nCraig Moore – \u00a31.1m
\nClaudio Cannigia – \u00a31.0m
\nPaolo Mendes – \u00a31.0m
\nJean-Alain Boumsong \u00a3630,000<\/p>\n