Leaders
Dallmeier

Business Directory

Browse the Directory

Sign Up to the Directory

FC Business Twitter
FC business Linked in
FC Business facebook
FC Business Youtube

Supreme Court Rules Against Rangers in 'Big Tax Case'

Wed 5th Jul 2017 | Legal

The Supreme Court has ruled in favour of HMRC over Rangers’ use of Employee Benefit Trusts (EBTs) between 2001 and 2010.

In its judgement over the use of EBTs, the Supreme Court upheld HMRC’s appeal that payments using the scheme should be taxable.

Under the scheme more than £47m was paid to players, managers and directors between 2001 and 2010 in tax-free loans which HMRC argued were earnings and therefore should be taxable.

What became known as ‘the big tax case’ the case focuses on RFC 2012 and will have no financial impact on NewCo Rangers.

Focusing on the activities under Murray International Holdings Ltd, and former chairman Sir David Murray, 108 sub-trusts were established in the name of individual employees, of which 81 were for RFC employees (footballers and executives) and 27 for other Murray group employees.

The group companies also used the combination of the Principal Trust and a sub-trust to pay discretionary annual bonuses to employees, other than the footballers whom RFC employed.

Since 2005 only RFC used the Principal Trust to remunerate its employees.

In a statement issued to the Press Association, Sir David Murray, said: “I am hugely disappointed that the Supreme Court has upheld the decision of the Court of Session, reversing the decisions of the specialist tax First Tier Tribunal and the Upper Tribunal in this matter.

“The decision runs counter to the legal advice which was consistently provided to Rangers Football Club, that on the basis of the law and legal precedent at the time, the contributions made to the trust were not earnings and should not be taxed as such.

“It should be emphasised that there have been no allegations made by HMRC or any of the courts that the club was involved in tax evasion, which is a criminal offence.

“The decision will be greeted with dismay by the ordinary creditors of the club, many of which are small businesses, who will now receive a much lower distribution in the liquidation of the club, which occurred during the ownership of Craig Whyte, than may otherwise have been the case.

“I have not had the opportunity to discuss the decision in detail with Tax Counsel, but will do so, particularly in light of proposed legislation, which will alter the tax position applying to loans made by trusts to employees. Once the impact has been assessed, a further statement will be issued.”

Two tribunals in 2012 and 2014 had previously found in Rangers' favour, but after an appeal in 2015, the Court of Session found in favour of HMRC.

Image: PA Images

Posted by: Aaron Gourley 

RETURN TO LATEST NEWS SECTION
SUBSCRIBE TO THE FCBUSINESS RSS FEED
 
If you have any football business related news stories you’d like to share then please contact us – agourley@fcbusiness.co.uk

Tweet

To subscribe to our range of football newsletters including news, products and jobs CLICK HERE.

Add to: Google Google | Yahoo Yahoo | Live Live | del.icio.us del.icio | Digg Digg |

Related Articles

Legal Comment: Football’s Deep Filled Problem With Gambling

Fri 24th Feb 2017 | Legal

On 20 February 2016, the FA Cup fixture between Sutton United and Arsenal turned into a media frenzy and one to remember, for all the wrong reasons. Laura McCallum, solicitor at Harper Macleod...

Manchester City Charged Over Anti-Doping Rule Breaches

Thu 12th Jan 2017 | Legal

The Football Association (The FA) have charged Manchester City for failing to ensure anti-doping officials knew where players were for drugs testing. Manchester City have been charged for failing to...

Hitchin Town Player Sacked For Abusive Tweets

Wed 4th Jan 2017 | Legal

Alfie Barker has been sacked by Hitchin Town and is under investigation by the Football Association after vile messages from his Twitter account were sent to AFC Bournemouth and Republic of Ireland...

CAS Reduces Transfer Sanctions On Real Madrid

Tue 20th Dec 2016 | Legal

Real Madrid will have sanctions imposed on them by FIFA for breaches of rules regarding the transfer of minors reduced. The Court of Arbitration for Sport (CAS) partially upheld the appeal of the...