Sir David Murray, Campbell Ogilvie, Dave King, as directors of a football club, you presided over tax evasion. While ordinary men and women have no choice, or criminal urge, to avoid paying for public services, you directed a deception on an industrial scale.
Sir David Murray and Campbell Ogilvie have their influence and signatures all over this act. The SFA was quick to discipline and sine die Craig Whyte after he was out of the game, it must now charge Murray and Ogilvie with bringing the game into disrepute. The stale influence of cronyism at Hampden must be routed and seen to be so.
The SPFL instructed an inquiry three years ago but with this verdict in, the SFA must appoint their own inquiry.
Why did the processes at Hampden allow this to happen and continue without check?
Why did Rangers get their European licence in 2011 despite being in arrears to HMRC, in contravention of that licence? Who was responsible for this decision?
Why was a director and signatory of Rangers illegal tax schemes elected and reappointed president of the SFA?
How transparent were the SFA and the SPL in their handling of these tax evasion charges?
Was the SPL inquiry commissioned to uncover the facts, or to meet a desired objective? Who prepared the inquiry remit and who signed off on that remit?
Lord Nimmo Smith found that legally executed Employee Benefit Trusts did not confer a significant sporting advantage. In light of what I have already read of the verdict, we must now discover if such widespread illegal Employee Benefit Trusts conferred a sporting advantage. This question has not been asked yet.
It’s time for football to shake off the shackles of corruption in Scotland, as elsewhere.
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HT
Wet himself again?
Sad. 8))
They can try to cover-up and minimise the disgrace heaped on hunnery, but the corruption and tax evasion has finished them for once and for all ……as we lived in hope and prayed it would …get thee gone, back to Satan, and take sevco / SFA with you…
Natknow
My darling wife always tells me I should be a professional comedian, well I think the is what “you’re a clown of the highest order” means.
Awe Naw-agree, we owe it to TB and others, Paul McConville comes to mind, to fight and expose the cheating from top of the Scottish game, to the dregs at the bottom.
Who got the biggest EBT ?
Do questions not arise :-) from that ?
HH
4-1 consolation Arsenal.
Willie Miller @DonWillieMiller 13m13 minutes ago
Dear @spfl, now we know that Rangers used illicit funding for players, titles MUST be stripped.
Football is only sport if fair.
It was not.
BLANTYRETIM IS PRAYING FOR THE KNOX FAMILY
What time you in the BV tomorrow, going straight from work, was going to work until 5 and walk along but might drop in if your in earlier?
Keep the Faith!
Hail Hail!
aye fitba’ its a funny old game eh?
i was trying to come up with a fair analogy to the issues regarding these EBTs, and thought,well although its a sport, pro football is an entertainment business lets expand it to another level, lets say the movies and a small (or large) company makes a blockbuster, paying all concerned circa £100m in EBT bonuses
Now all concerned received great plaudits oscars and grammys a plenty the royalties came in for years and many of the crew dined out on their fame forever. However when BAFTA found out this charade (pun intended) was realistically played out with tax payers money they wanted all the awards returned, You cant do that because they were the best actors that year best crew, you cant erase the memory of the best film, it just cant be put back in the box can it?
All the great sages of the country tried to come up with a solution How can you take back a award for best actor,etc when they clearly were? albeit funded illegally?
Now bearing in mind there’s no bias here, and the question is not asked in a way that it can be totally put right (do you honestly think stan petrov would thank you for a medal from ten years ago,ewan mcgregor for a similar oscar?)
If it really means so much to the players let them have the chance to keep their medals by buying them back at whatever their EBT amounted to and if all of them, yes all of them, buy them back they can keep their oscars and best picture awards but if only one says no then best picture award should be witheld for that season…………..its only fair on all other players and actors (as for the paying public?????????????)
Lennybhoy
MAS AGM tomorrow afternoon so I’ll be in sharp , 3.30
Money Advice Scotland btw
https://johnjamessite.wordpress.com/2015/11/04/monsieur-graham-washes-his-hands-of-rfc-2012/
The history aspect is interesting Monsieur Graham. Are you stating that the 13 titles won using a tax evasion instrument, were not won by the current club? Today’s judgement most certainly does impact on our history as they reclassify EBT as tax evasion, which is illegal Monsieur Graham. Attempting to sweep any liability into RFC 2012, a corporate vessel set up to contain debt, would imply that BDO own the 13 titles that were won during the EBT years. Is this your position Monsieur Graham? You are not very good at this PR game. Why don’t you call up your chum Stephen Kerr prior to your next statement.He has worked for the club for more years than you have spent minutes, and it shows.
I will give the final comments on the unedifying debacle of your statement, to Graham Spiers:
“The judgement of illegal activity by Rangers – if or when this saga is concluded – will leave an ungodly mess to be sorted.
The club paid the ultimate price in 2012 – liquidation. That event has left Scottish football poisoned, with acrimonious debate about Rangers’ history going into overdrive in recent years. But the “newco Rangers” – whatever your interpretation of that – will not be financially affected.”
A guilty Rangers – if this is the end of the matter – also leaves the Scottish FA in a precarious position. Retrospective title-stripping looks a futile business to me, but it goes on in other sports, and the SFA stand accused of being timorous in the face of the wrongdoing.
Is title-stripping an option? Yes, it is, though I wouldn’t assent to it. The misdeeds have been done, and Rangers FC paid a high price.
What is to be gained in trampling back over history and spearing a liquidated football club with further punishment? There always will be an asterisk in the public mind beside these dodgy Rangers years. I cannot see the benefit in the retrospective expunging of trophies.”
There is a certain arrogance in your statement Mr Graham. At this point I posit that we proceed with a quiet understated humility. Inflammatory statements like your’s, may well incite others to boycott their clubs next season unless they confront the SFA. The least said about this matter by Rangers, the better. You were much better at cartoons, why don’t you revert to your first love?
HAMILTONTIM on 4TH NOVEMBER 2015 9:04 PM
Just had a peep, looks like SOAL step in the same hole as did oldco…:)
Keep the Faith!
Hail Hail!
The lhad just been telling me that Rod Stewart started the sing song on the One Show, producers gave the bhoys a telling off, they didn’t get a chance to hold up the Hector masks.
Lennybhoy
Me and H will be in the BV tomorrow maybe 3 ish.
blantyretim is praying for the Knox family
I will pop in just after 4, a pint of Guinness will be great, thanks…:)
Keep the Faith!
Hail Hail!
A beautiful day.
Feels like Christmas.
Proved to be cheats.
They have no shame.
Many many thanks to all those who worked tirelessly to expose the lie.
Titles must go and SFA heads must roll.
Just beautiful.
We Still Won
HH
Jmccormick
Thumbs up as Philvis was want to say
Happy Birthday to Dena who must be 28 by now.
The HMRC appeal being won makes it just 1:1 in the eyes of the Ibrox hordes and the Scottish media- they will spin it as a complex issue where one set of judges found in their favour and another set found against them. They will be looking for best of three verdict.
However, I firmly believe that the quiet and dogged determination of number of Internet bampots was rewarded today. The fact that they did not go quietly into the night after the initial verdict and the LNS sham is a testament to a passion that is not of the foot-stamping tantrum variety but a determination to keep going and to counter spin with cold heart facts. Their light burned long and strong and did not fizzle like a cheap firework. They unpicked the weak logic of the initial verdicts and confronted the gullible with contrary evidence and evidence they had not even considered.
So, while it is not yet over, I will toast the quiet doggedness of the following, named in alphabetical order, so as not to praise one above the other.
Well done, and my undying thanks to Auldheid, Alex Thompson, BRT&H, Canamalar, James Forrest, Jim Spence, Morrisey, Paul McConville, Paul67, Phil Mac Giolla Bhain, The Battered Bunnet, Winning Captains and any I have overlooked in my rush to post.
I know that you guys know this is not over. This is not a time to be making dramatic and tribal gestures; it is a time for uniting with other Scottish clubs to ensure that this issue is not, again, swept under the carpet because it was all a long time ago now.
No statute of limitations.
No vengeful acts
Quiet and considered judgement and the full force of justified sanction then applied.
Today, we saw that, even Freemasonry influence has a limit.
Hello again all you young rebels.
Even though the rain is torrential here , monsoon like with thunder and
lightening to me its a beautiful morning, a karma morning, finally the
truth is out there after all those years as a lad having to hide my Celtic
scarf in case i got another pasting or spat on or treated as a leper or
tenners waved in my face and so on this morning wakening up in Oz is
wonderful and exposes that club for what they are/ where.
My wee princess shouting through from the kitchen.
” Mick , whits awe the hilarity aboot?
And when i told her.
” They should hing the bliddy lot o thum ”
Never mind title stripping i’ll go with that.
H.H Mick
Need some tax advice fellas :)
For three years I had a company car had the option to use it for personal use never did and my employer declared it so and were willing participants in submitting my tax returns.
Hector then advised my that I had received a taxable benefit and was entitled to be taxed accordingly.
I put my case that I was a standby technician had my own car and never used the works car for personal use and my employer confirmed they advised Hmrc accordingly.
Hector said No dice and back tax was due. Now Hmrc didn’t send the tax demand to my employer who made the mistake but ME stating my tax is my responsibility !!
So why would Hmrc change policy and try and recover tax from the clumpany ( IL ) and not the beneficiaries of a an ebt benefit ????
One rule for one and one rule for another is not democracy and stinks to high heaven :(
#justiceforthetwohundredandseventycreditorsandthetaxpayer
ELDIEGOBHOY on 4TH NOVEMBER 2015 9:19 PM
See you both just after 4.
Keep the Faith!
Hail Hail!
I bet Alan Stubbs is feeling good tonight.
Specs located.
HH
lennybhoy
Change of plans. 8))
EDB
I jest, see you tomorrow
Must admit I have listened to Willie Miller a few times on the EBT debate
and his opinion has always been the same “it was not fair & the SFA should
act accordingly”. However don’t put any money on it ever happening!
Hail Hail
Scottish football is at a tipping point
Anything other than robust ,immediate and proportionate action is unacceptable and will cause the game irreparable damage
Me thinks there will have been a lot of calls made once again today by those EBT recipients looking for advice and clarity once more as to where they stand regarding unpaid taxes, whether they have any liability now and will they be pursued.
Bless their little cotton socks.
Perhaps if they have something squirrelled away just in case, it may help them sleep better tonight.
Seem to recall an HMRC spokesperson saying something about them pursuing individuals once that ole CVA was tossed out.
Have HMRC just been given the green light to seek payback of those loans?
Cannae get the picture of wee Baz desperately shaking and trying to open his piggybank out of my head right now.
http://gifsoup.com/view/3469990/samaras-and-ferguson.html
Always funny seeing Baz brickin it :)
That should read “cold, hard facts”
Notorious Eejit that I am
chelsea drawing 1-1 at home against Kiev … Kiev score an own goal and then a later equalizer …The Special One has won only 1 of his last 8 or 9 in Europe … pllus the domestic troubles … cant see old Roman putting up with those sorts of results for much longer….
SFTB
You forgot all the custodians of our beliced club ….oh wait a minute you didn’t. :-(
HH
Beloved
RANGERS LOSE THE BIG TAX CASE – WHAT NOW?
BLOG, FOOTBALL, RANGERS 1 COMMENT NOVEMBER 4, 2015
From Diego Sideburns https://www.flickr.com/photos/diego_sideburns/
Today, the Court of Session in Scotland ruled in favour of Her Majesty’s Revenue and Customs in the Big Tax Case. The Big Tax Case was a challenge to Rangers’ use of an offshore tax avoidance scheme to pay its players.
This is the first victory for HMRC in what has become a very long running court battle, over what was seen as a test case by HMRC. For that reason the ruling is likely to have widespread repercussions for the offshore tax avoidance industry.
For Rangers (or rather for creditors of the company, now in liquidation), the ruling is likely to bring some finality to the matter. But for some of the individuals involved, including in the governance of Scottish football, the result could also be very serious.
At Offshore Game Towers we’ve been combing though the judgement. Here’s our analysis.
BACKGROUND
First a quick recap on what the Big Tax Case was about. The case looked at a particular tax avoidance scheme used by Rangers to pay its players between 2001 and 2009. The scheme was set up by Rangers’ owners, the Murray Group, on the advice of Paul Baxendale Walker, who since leaving the tax advisory profession has become a pornographer.
The scheme was complex, but in broad terms worked like this: Players would receive a small amount of their payment though a normal contract with the club. This contract would be registered with the SFA in the normal way and income tax paid on it. However the player then would sign a separate agreement with the club to receive money though an offshore trust. Payments made to the trust were not part of the contract and not declared to the SFA or HMRC. In Rangers’ case that trust was based in Jersey.
The club would make payments into a primary trust which had a set of sub trusts attached to it. On paying the money it would ask the trust to make a payment into a sub-trust set up in the name of a player. The player would then write a letter to the sub trust expressing who he wanted to benefit from the trust. That was normally members of his family. However, the beneficiaries did not need to be paid immediately, the benefits could come many years in the future. In the interim, the trust loaned the money to the player. In total there were 108 sub trusts, each for the benefit of a named player or employee.
Trusts work by inserting a layer of control in between people that can be useful for tax (and sometimes other) purposes. In this case the layer was between the club and player. In theory the club was not paying money to the player but to the the trust. The trustees, the people controlling the trust, controlled the money. They did not have to obey the wishes of the player, they did not have to make loans to him and they could also have recalled those loans. What that means is that the players could make the argument that the money that they had was not guaranteed to come to them and was given to them at the discretion of the trustees of the trust (whoever they may have been) and not the club as part of their employment.
HMRC disagreed and counted the money as payment for employment, and cited in evidence the side agreements signed between the club and player over payments to the trust. They demanded £50m in back taxes for the scheme. Rangers challenged the decision and went to a tribunal. The tribunal ruled in Rangers’ favour. HMRC appealed, the second tribunal also found in favour of Rangers so HMRC appealed a second time to the Court of Session, the Scottish equivalent of the Court of Appeal.
THE DECISION
The Court of Session ruled today that both the lower and the upper tax tribunal were wrong. The payments to the players were payments that came as a result of their work as players and as such they should have been taxed. The fact that the money was paid to a third party was irrelevant. Once the payment had been made for work it was income and it was the players choice to redirect their income somewhere else. The club should have withheld the tax when the payments were made under PAYE rules.
Reading the judgement there is an elegant clarity of thought from the court. The judges stress that in essence this is a simple case in paragraph 56 of their judgement:
The fundamental principle that emerges from these cases appears to us to be clear: if income is derived from an employee’s services qua 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. That accords with common sense.
And the court is really quite scathing of the conclusions of the tax tribunals. The court says it has had at times difficulty in understanding the reasoning of the tribunals. The court goes onto say that any realistic view of the transactions can only come to one conclusion. Given that the conclusion differed from that of the tax tribunals, that is a fairly damning statement. The relevant passages from paragraphs 57 to 60 of the judgement are below:
“This principle is ultimately simple and straightforward – indeed, so straightforward that in cases where elaborate trust or analogous relationships are set up it can easily be overlooked. That, it seems to us, is what happened before the First-tier and Upper Tribunals in this case….
It must be determined whether the payments by the relevant employer into the Principal Trust, and in due course the payments from the Principal Trust to the various sub-trusts, were derived from the employment of the employees in question. If they were, they amounted to the employees’ emoluments or earnings….
It is very obvious that they [the payments] were derived from and based on the work done by the particular employee. On any realistic view of the transactions under consideration, that conclusion is inevitable. The First-tier Tribunal considered that the benefit was “a mere discharge of an employer’s obligation to an employee”, but that ignores the manner in which any such obligation arose….
The First-tier Tribunal expressed the view that the obligation in the side-letter was not an emolument, as it was a discharge of an employer’s obligation to an employee. We have difficulty in understanding this statement. 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.
The court has ordered that the original tax assessments by HMRC stand.
3 TAKEAWAYS
1. RANGERS UNLIKELY TO APPEAL
This latest ruling now brings finality to this matter. Strictly speaking Rangers could appeal to the United Kingdom Supreme Court, but this seems unlikely to happen. The Supreme Court exists to clarify difficult and contentious points of law. It can choose which cases it hears and only does so if the case has a real chance of success or if there is an important national issue that needs to be addressed. Where a lower court has made a ruling that is clear cut and expresses no doubt about their conclusions it is difficult (but not impossible) for the case to be taken up by the Supreme Court.
As can be seen from the passages quoted above, the Court of Session’s judgement today is very clear cut. The judges have done a thorough and comprehensive job in analysing all of the relevant case law and legal issues going back to the 1930s and how they might apply to this case. They even have taken the time to consider arguments that it appears were not advanced by HMRC. At the end of this process they have come to a very clear and unambiguous decision. It was written like a judgement that that will be extremely difficult if not impossible to appeal.
That said, there are many live cases involving EBTs – with a great deal of money at stake, if the current case is taken as setting precedent. So watch this space…
2. A CASE WITH WIDE IMPLICATIONS
A key point that was made by the Court of Session was the simplicity of the underlying principles in this case, and the attempt by Rangers to confuse the issue with complexity. Was it ever any other way? So much of the tax avoidance industry relies not on the cleaver use of tax rules, tax breaks and loopholes, but by creating complex structures that are so difficult to penetrate that tax authorities can’t see what is really going on, even if they try. Today’s ruling cuts though all of that that, and separates the source of the payment, from the way in which it was paid.
There was little discussion of whether the trusts really were discretionary, or the relative powers of the trustees, there was no analysis of whether the arrangements set up were real with real legal effect or whether they were a sham (the complicated issue that tribunals tried to grapple with). As far as the court was concerned there were payments arising out of the players work, whatever complex, convoluted offshore scheme you use to launder those payments through is irrelevant.
Employee benefits trust schemes like that in the Big Tax Case were used by a number of Premiership football clubs (although apparently a number of them settled rather than go to court) and were marketed by tax advisers to a wide range of people. The Big Tax Case was seen by HMRC as a test case which it would use to establish the law and pursue others. Expect more people to start settling with the HMRC over the coming months. (Although per the above, watch this space…)
3. RANGERS COULD LOSE TITLES
Perhaps the biggest and most serious consequences could come for Rangers.
In order to support the tax avoidance scheme, Rangers did not declare the payments they made into the trusts to the SFA. A subsequent inquiry established by the Scottish Premier League and led by Lord Nimmo Smith found that the payments were in contravention of SFA rules.
However the inquiry did not recommend a sporting penalty but only a financial penalty. In other words the SPL fined Rangers pounds not points.
Key to this decision was the finding that Rangers were not doing anything unlawful. At the time of the inquiry the tax tribunal had ruled in favour of Rangers. After the way that the courts so comprehensively trashed the decision of the tribunal today, it is difficult to see how there isn’t an argument for looking at the issue again.
But there is more. The Nimmo-Smith inquiry rested their decision not to award a sporting penalty on the idea that Rangers had not received any indirect competitive advantage from the scheme. Of course it is obvious that as they didn’t pay taxes (at 40%) the club had more power in the market to buy better players. But Nimmo-Smith concluded that as the scheme was legal, it was open to any other club to arrange their affairs in the same way.
The fact that Rangers had believed that they needed to break SFA rules by not declaring the payments was irrelevant. The tax tribunal had said that they would have found the scheme to be legal even if Rangers had declared the payments to the scheme. Other clubs could have set up the same tax avoidance scheme and kept within the SFA rules and so were not disadvantaged by Rangers breaking the rules.
It is difficult to understate how big a call this was. The tax scheme that the court ruled on today was in action for 9 years, during which Rangers won the Scottish Premiership 3 times. They came in the top three the other 6 years, giving them a place in European competition. Had Rangers been docked points it could have lost these titles and other clubs could have said they had been excluded unfairly from European competition.
The judgement today directly addresses the issue of competitive advantage in paragraph 62:
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. We realize that the fifth respondent [Rangers 2012] was in, potentially, a difficult financial position, competing for good players in an international market where other countries may not have the same rigorous approach to taxation as the United Kingdom. Nevertheless, the law is clear: the payments made in respect of footballers were in our view derived from their employment, and thus the payments were emoluments or earnings.
In other words Rangers won titles based on operating a scheme that was unlawful in its tax implications, and therefore not open to other clubs with which it was competing.
Where did that leave Scotland’s game? Was the competition during 2001-2009 a fair one? Was there a subsequent failure to address the sporting consequences?
Fans of Rangers saw the club go into liquidation following the tax risks taken by their board (and financial secrecy remains a major issue, with a major court case facing many of those involved in the new company’s establishment).
Fans of other clubs have seen the outcome of their major competitions distorted, at best, by tax manipulation over the best part of a decade – and the apparent failure of Scottish football authorities to respond appropriately.
This is, in our view, the real problem with clubs playing the offshore game: football ends up being the loser, and with it the fans.
Awe_Naw, we know you found your specs, no spelling mistooks:-)
PFayr
The sfa will do sfa, the game in scotland is fecked, has been for manys a year, it’s not going to happen mi amigo, and we all know it.
HH
damn! jinxed it … chelsea score
Good on willie Miller …. need more like him to stick up for the truth. Hopefully, some Celtic players will come out and echo his comments.
SFTB-great post
Delighted that Hector won but I would imagine that Murray will appeal it. He has a vested personal interest as he himself got 6.7 million in EBT Loan and if he is followed up could be hit for millions. The likely appeal will unfortunately mothball the entire process for another couple of years.
The Nimmo Smith Tribunal finding was perverse and it remains a festering sore, it has to be revisited sometime but again any appeal is likely to kick that process into touch as well.
King himself has effectively admitted that Sevco are a new Club as he spoke about buying Old Co to “put the new Club issue to bed”, I think this ruling means he will not be able to purchase Old Co, without Hector’s (The largest Creditor) approval, a most unlikely scenario.
It is beyond doubt that Rangers are dead & buried,, a Club calling itself The Rangers better known as Sevco are now playing and are laying claims to Titles won by their predecessors, the sad fact is that those in charge of football in Scotland are afraid of the knuckle draggers that support the new entity and are taking the line of least resistance in more or less playing along with the charade that they are still the same Club.
Doc,
Not quite ,?
What happens next do I start going blind.
Keep away from Doc folks. He has a mild form of leprosy
:-)
HH