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Improper registration issue closes in on Murray

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Sir David Murray and former Rangers director, Mike McGill, who is also a director of Murray International Holdings, gave a press briefing yesterday.  Much of what Murray said relates to his disappointment at the actions of Craig Whyte, whom he sold Rangers to last year.  Throughout the years Rangers were for sale Murray maintained he would only sell to someone with Rangers best interests at heart.  Whyte has, by many accounts, fallen short on this measure, however, it is far from clear that Sir David had much choice in the matter.

The club were dependant on the support of Lloyds Banking Group and had a potential liability of around £49m to HM Revenue and Customs hanging over them.  Whyte offered Lloyds the opportunity to relieve themselves of crica £18m of debt, potentially rising to nearly £70m, which would have subsequent consequences for Rangers budget and earning potential.  When you are £70m in debt with contracted structural costs which cannot be changed quickly, while income can vary on the bounce of a ball, £80m is within touching distance.  In truth, it could be argued that even Lloyds, 43% owned by the taxpayer, had little choice but to force through the sale.

Murray will take responsibility for putting the business into the position if was when Craig Whyte’s £1 offer won the day.  He and his board elected to utilise the Employee Benefit Trust (EBT) that has caused so much turmoil.  He and his board elected to press ahead with multi-million pound player purchases after HMRC first raised the alarm about EBTs in 2010, instead making immediate cutbacks to provide for a potential loss of the First Tier Tribunal.

What Murray said about the on-going tax case or Craig Whyte is irrelevant.  Let’s instead take a look at what was said about player payments.

Murray said:

“There was no double contract. There was categorically no dual contracts.”

“What I would say is this. We went through 10 AGMs. We signed off accounts by Grant Thornton, the remuneration trust was always mentioned in the account. It was never hidden, and that’s a fact.”

Accept there was no double contract, thank you.

Accept the remuneration trusts were mentioned in the accounts and not hidden, this is, indeed “a fact”.

Mike McGill, said:

“The other, larger [EBT] scheme, started in 2001, involves a payment into an offshore trust, but there is no contractual entitlement on the part of the players.

“The whole basis of an EBT arrangement is that there is not a contractual entitlement. That is key to the defence, and key to the allegations made by the SFA [sic].”

Accept there was no contractual entitlement on the part of the players.

The EBTs not being subject to contractual entitlement is “key to the defence, and key to the allegations made by the SFA”.

Ah.  We’re getting somewhere.

Scottish Premier League, Rule D 9.3:

“No Player may receive any payment of any description from or on behalf of a Club in respect of that Player’s participation in Association Football or in an activity connected with Association Football, other than in reimbursement of expenses actually incurred or to be actually incurred in playing or training for that Club, unless such payment is made in accordance with a Contract of Service between that Club and the Player concerned.”

Scottish Football Association, Articles of Association, Article 12.1:

“Furthermore, all payments, whether made by the club or otherwise, which are to be made to a player solely relating to his playing activities must be fully recorded within the relevant written agreement with the player prior to submission to this Association and/or the recognised football body of which his club is in membership.”

The SFA’s Registrations Procedures go on to state:

Rule 2.2.1

Unless lodged in accordance with Procedures Rule 2.13 a Non-Recreational [professional]Contract Player Registration Form will not be valid unless it is accompanied by the contract entered into between the club concerned and the player stating all the terms and conditions in conformity with the Procedures Rule 4.

Rule 4

Such agreement shall be signed by the player and by the secretary or an accredited official of the club concerned and shall be witnessed by 2 other parties and lodged with the Secretary [of the SFA]together with the Form.

If Mr McGill is correct that players not having a contractual entitlement to EBT payments is key to the defence in the SPL inquiry (or SFA as Mr McGill suggests), it would appear that corresponding player registrations are not valid.

No Player may receive any payment of any description unless such payment is made in accordance with a Contract of Service.

All payments, whether made by the club or otherwise, made to a player relating to his playing activities must be fully recorded within the relevant written agreement with the player prior to submission to the SFA.

No matter how often the SFA president and former Rangers directors brief journalists on issues which sound a bit like the Improper Registration of Players allegation, but are, in fact, the on-going tax case, this matter is not going away. The Association are now actively involved in this matter, as Alex Thomson of Channel 4 News and Chick Young of the BBC testified to yesterday, but not in the way you would expect.

In football parlance, they are competent to investigate this matter and to provide subsequent appeals process if required, and have a duty to do so at the earliest opportunity. SPL football will resume on Saturday and we require clarity on who is, or is not, correctly registered to play.

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  1. Matthew Lindsay ‏ @MattLindsayET

     

    Reply RetweetedRetweet

     

    Delete

     

    FavoritedFavorite · Close Open Details Official SFA statement on president Campbell Ogilvie imminent. #sfa #rfc

  2. thebhoywithmcgraininhisside on

    NeilR on 14 March, 2012 at 15:41 said:

     

     

    You may well be right. I have never said the argument was correct, I just think it holds enough weight to get into Court.

     

     

    The payments described are payments made to players by clubs for playing association football or activities connected to it.

     

     

    Playing association football, and training for it and doing all other activities connected to association football is the player’s job. The Clubs pay them income payments in return for doing their job.

     

     

    These payments must, as in in every other walk of life, be subject to income tax. If they are not subject to income tax then they can not be payments made to players for doing their jobs. In which case they are different from the payments as set out in the relevant article.

     

     

    Hail Hail.

  3. Gordon_J

     

    Thanks. Truly amazing.

     

    “….it`s not that easy to check.” ….and as we weren`t willing to do anything that wasn`t easy, we just took a chance that he would be an OK fella. After all, it was only Rangers I was selling and I knew the SFA wouldn`t be doing any checking.

     

     

    J

  4. ASonOfDan on 14 March, 2012 at 15:45 said:

     

     

     

    “CW apparently on the run from the French Police, best if the UK authorities take ownership of his [passport”

     

     

    Just spat all over my screen and doubled up with laughter. How the hell I explain to my colleagues an item of work caused that I don’t know… :)

     

    ========================

     

     

    Just tell them you were unexpectedly affected by a severe pain in the gendarmes

  5. Hunbelievable…..high finance,done on handshakes & taking somebody at their word….nowhere else would this happen except in The Sopranos.

     

    High finance? Major fraud,more like.

  6. Awe_Naw_No_Annoni_Oan_Anaw_Noo on 14 March, 2012 at 15:52 said:

     

     

    I’m all right with it ,share the glory,is my newly made up motto:O)

  7. henrik

     

    when somebody exhibits that kind of brain imbalance i dont wanna kno -i suppose its a timesaver-but sooo many of them

  8. ZooKeepersSon,

     

     

    Murray’s argument is that the payments didn’t break tax law or football’s laws.

     

     

    Now, as Paul has made clear in the article, any payment for any football activity must be in the contract lodged with the football authorities.

     

     

    So he must mean that the money paid to players from the EBT must have been for reasons other than their footballing activities. Whatever they might be – I’ve no idea.

  9. Statement from Campbell Ogilvie

     

    Wednesday, 14 March 2012

     

     

     

    Campbell Ogilvie, Scottish FA President:

     

     

    “In light of today’s comments by Sir David Murray, and the ongoing speculation surrounding my role as President of the Scottish FA and my previous employment as a director of Rangers FC, I would like to take this opportunity to clarify the following points:

     

     

    “I was aware of the EBT scheme in operation at Rangers during my time at the club and, indeed, was a member. The existence of the scheme was published in Rangers’ annual accounts.

     

     

    “My role at Rangers, until the mid-90s, included finalising the paperwork for player registrations. As confirmed by Sir David Murray today, it was never my role to negotiate contracts during my time at Rangers. It is also worth noting that, since the mid-90s, I was not responsible for the drafting or administering of player contracts.

     

     

    “I ceased being Company Secretary in 2002 and became General Secretary responsible for football strategy, in effect becoming the main point of contact between the club and the respective league and governing bodies.

     

     

    “In relation to the recent investigation, I can confirm that I asked to be excluded from the Scottish FA’s Independent Inquiry into Rangers. In the interests of good governance it was absolutely right that this was the case.

     

     

    “I am proud and privileged to be President of the Scottish FA during an exciting period in its history. I have an excellent relationship with our chief executive, Stewart Regan, and the Board of Directors. I would like to thank them for their support throughout this process and look forward to new and exciting challenges ahead at the Scottish FA.”

  10. Afternoon bhoys from a very warm, 26 deg, mountain retreat that is hun free.

     

     

    Well the info is coming thick and fast, soo much to take in.

     

     

    Delighted to see that minty is at long last in the firing line,

     

     

    RC Ogilvie next, then the sfa’s walls will shirly start to crumble, is it ok if I have custard with the crumble ????

  11. Thanks Awe Naw & TBB. I’ve posted a few times on RTC recently, mostly technical stuff that I had some handle on, but CQN is definitely more fun. In short, I’ve missed you guys :-) I’ll try to be less of a stranger during these ‘interesting times’ for Rangers.

  12. I’d like to apologise to RFC ex-Directors.

     

     

    A couple a weeks ago I stated that the only defence these chaps had with regards to the EBTs was “It wisnae me it was him”

     

     

    Turns out it wasn’t Campbell Ogilvy who pointed out it was Sir David Murray who handled it.

     

     

    Nether was it Sir David Murray he was told to do it by Mike McGill.

     

     

    The apologies should extend to Mr McGill turns out he was advised by Grant & Thornton.

     

     

    As BlantyreKev pointed out a while back G&T will have a clause ensuring they are not liable for advice.

     

     

    MeaCulpaCSC

  13. What’s to understand Mr Regan?

     

     

    A team has to disclose to the SFA all of what it pays to a player.

     

     

    Murray has admitted non disclosed (to the SFA) payments were made. Contractual or not, it’s irrelevant.Taxable or not, it’s irrelevant.

     

     

    Regan has the obligation to do the right thing here.

     

     

    The fact that he drags his feet hoping against hope that it all goes away shows him to be a coward.

     

     

    When some one else has to step in to force him to do the right thing or get out it will shame our game for a very, very long time. Does he even care? Does he think the game is up and he will take a salary for as long as he can, a few more weeks maybe even months?

     

     

    What Rangers have done is a disgrace, the fact that Mr Regan does nothing for so long is even worse.

  14. theotherhalf on 14 March, 2012 at 15:36 said:

     

     

    “Interesting article on EBTs – I hope the anyone who has benefited from these EBTs realises that they are classed as a Benefit In Kind, taxable, and have to be declared as such on their personal tax returns, otherwise…………….”

     

     

    theotherhalf,

     

    a benefit in kind is not taxable if it is provided in a tax year in which the employment does not exist. It is only if the distribution comes out in cash, that it remains taxable regardless of when it is received.

     

     

    Typically, individuals wait until a tax year after the one in which the employment ceased and then, to their surprise, receive from the trustees a villa in Portugal or a Ferrari or a signed picture of Billy Urquhart scantily dressed and sprawled across a water bed. Since all of these are benefits (well, not all) they are not subject to tax.

  15. !!Bada Bing!! Kano 1000 on

    He has admitted to EBTs in the mid 90s then,cheerio to 9 IAR.Cheers Cammy baby.

  16. iPaddy McCourt on

    Another superb article, Paul, well done.

     

     

    It is now abundantly clear that Rangers broke the rules – payments were made to players that did not form part of the players’ contracts. It automatically follows that the registrations of the players concerned were utterly invalid.

     

     

    It really is that simple.

     

     

    The question is, what is to be done about it?

  17. Awe_Naw_No_Annoni_Oan_Anaw_Noo on

    voguepunter on 14 March, 2012 at 16:00

     

     

    This is why I support Celtic so I can run shoulders with guys likes of you ;-)

     

     

    Hail Hail

  18. Ogilvie admits he was paid from an EBT.

     

     

    Ogilvie admits he submitted papers re player contracts to football’s governing bodies.

     

     

    File those two facts away somewhere safe. I think they will become very significant somewhere down the line.

  19. CO ““I was aware of the EBT scheme in operation at Rangers during my time at the club and, indeed, was a member.” Has that we bass Chick Young been lying to us all along? Or has he been stiched up yet again. The wee Fu%

  20. Awe_Naw_No_Annoni_Oan_Anaw_Noo on

    Paul67

     

     

    you should change your name to Captain James T Kirk seem you can boldly go where we cant !!!

     

     

    Hail Hail

  21. Awe_Naw_No_Annoni_Oan_Anaw_Noo on

    If Campbell Ogilvie was a member of the EBT scheme then he knew illegal payments were going on to players.

     

     

    Gardening leave for Campbell me thinks

     

     

    Hail Hail

  22. This whole thing is turning into a complete farce. Surely they could at least get their stories straight so that everyone spouts the same rubbish and falsehoods.

  23. thebhoywithmcgraininhisside on 14 March, 2012 @ 15:57

     

     

    “The payments described are payments made to players by clubs for playing association football or activities connected to it.”

     

     

    That is explicitly clear from the letter published in the Sun, and virtually guarantees that the payments will be found to be contractual by the FTT, which will make this and any related arguments entirely theoretical.

     

     

    “Playing association football, and training for it and doing all other activities connected to association football is the player’s job. The Clubs pay them income payments in return for doing their job.”

     

     

    Yes.

     

     

    “These payments must, as in in every other walk of life, be subject to income tax. If they are not subject to income tax then they can not be payments made to players for doing their jobs. In which case they are different from the payments as set out in the relevant article.”

     

     

    To all three sentences: not so.

     

     

    The income tax code taxes certain payments from employers (salary, certain benefits in kind, etc) and not others (Christmas parties or other entertainments up to a rather stingy annual limit, contributions to registered pension schemes, etc). You cannot conclude that a payment is not for work done just because it is not taxable. And whether or not it is taxable, that has nothing to do with whether it falls into the category of “any payments of any description”. The word taxable neither appears, nor is implied, by the wording of D 9.3.

     

     

    You might conceivably be right that this line argument is strong enough to make it to court; but if it did, it would not occupy the court’s time for very long.

  24. SFA statement

     

     

    RC Ogilvie ‘I’m up to my ears here, but I’m just going to brazenly ride this one out’

     

     

    Stewart Regan (fingers in ears, eyes closed tight) ‘La la la la la la la la la la’

  25. celticrollercoaster says In Neil we trust on

    “I was aware of the EBT scheme in operation at Rangers during my time at the club and, indeed, was a member…”

     

     

    CO admits benefitting from the scheme.

     

     

    Imagine the scandal if these EBTs turn out to be tax evasion. Just as well HMRC aren’t investigating them, eh? Publishing them the accounts is irrelevant. It is how they are administered and their true purpose (i.e contractual remuneration). No dual contracts, just dodgy side agreements which in itself are contractual if fulfilled as part of their employment….ssshhhh!!!! Dont tell the Hector or the SFA?

     

     

    Walter, you care to comment about your participation?

     

     

    HH

     

     

    CRC

  26. Awe_Naw_No_Annoni_Oan_Anaw_Noo on 14 March, 2012 at 16:13 said:

     

    Anyone with an I Pad……..

     

     

    SUPERB

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