The Upper Tier Tribunal (UTT) sitting on HMRC v Murray International Holdings (MIH) has ordered HMRC’s demand for unpaid tax to be reduced substantially. Claims Sir David Murray Employee Benefit Trust should be taxed were dismissed, but the UTT was not prepared to endorse that guaranteed bonus payments paid to Rangers players should not be taxed.
During the First Tier Tribunal MIH acknowledged tax should have been paid on EBTs given to a further five players, who were removed from the judgement (although the tax was never paid). Lord Nimmo Smith’s SPL Inquiry found Rangers guilty of not disclosing side-letters given to players which contractually bound EBT payments and arrangements. The Inquiry issued Oldco Rangers with a fine of £250,000. Newco Rangers agreed to pay all of Oldco’s football debts as a price to gain entry to the SFA and league structure. It is anticipated this fine will be collected in the event the club reaches top flight football.
Rangers did not dispute they operated an illegal Discount Options Scheme, which was uncovered by Craig Whyte’s investigators, when he carried out due diligence before buying the club from Sir David Murray. Tax due on this scheme was never paid.
Once in control, Whyte continued to operate the club’s tax arrangements in similar ethical standards. He failed to pay VAT, PAYE or National Insurance. Several hundred other creditors were left in the lurch as the club was liquidated.
At its heart, this is a morality tale. The first lesson which should be drawn is that it is far better to disclose your tax arrangements to the authorities than to hide them. When Celtic employed Juninho, who had an earlier EBT, they disclosed this fact and subsequent transactions to HMRC (Celtic never issued rule-breaking side-letters either).
Perhaps the most important lesson is not to allow debt to get out of control. Armed with the Discount Options Scheme and tax not paid on contractually guaranteed bonuses, HMRC were legally bound to pursue the club for money the tax payer was due – and will almost certainly never be paid.
Once that train was in motion, the club was at the mercy of its bank. MIH held substantial commercial property assets at this time, when the UK commercial property market took an average 45% nosedive. Then the bank itself (HBOS) was sold, exposing legacy arrangements to full commercial scrutiny.
Even then, even then, Rangers could have used the bonus of Champions League income to either rapidly pay-down their bank debt, or retain as a hedge against the consequences of the on-going tax dispute. Instead Walter Smith returned to the transfer market, spending what he could to keep his nose in front of Celtic.
This was an arrogant and fatal mistake.
When Whyte put his £1 on the table there was nothing the Independent Board Committee could do to dissuade Sir David from selling, but by then all the cards had been played, an insolvency event was on the horizon unless someone coughed up £18m to repay the overdraft, and no one was prepared to do this.
In the unedifying final days the club was reduced to turning, cap in hand, to lifelong adversaries to ask for rule changes which never arrived.
Despite all of this, humility among this lot is scarcer than a fully paid up tax receipt.
It took dozens of people working to promote Rangers on-field activities to kill the club. Those who failed to disclose side-letters, those who allowed debt to get out of control, those who sat on boards which endorsed Smith’s spending knowing the potential consequences, those who campaigned against the people who disclosed Whyte’s background, were all necessary for this outcome. Their reputations are now co-dependent
Celtic fans, HMRC nor the SFA killed Rangers. None of them* knew about the Discount Options Scheme, the undisclosed side-letters, the unpaid VAT, PAYE or NI bills. None of them decided to spend more than was prudently possible.
Killing Rangers was an inside job. The biggest rivalry in football is gone; we won, by an avalanche of own goals.
*apart from SFA president Campbell Ogilvie, who knew exactly what was going on.
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Big Nan
09:49 on
11 July, 2014
ernie lynch
09:06 on 11 July, 2014
Brogan Rogan Trevino and Hogan supports Oscar Knox, MacKenzie Furniss and anyone else who fights Neuroblastoma
08:51 on 11 July, 2014
‘He seems to have leaned significantly on the question ” Were the FTT entitled to adopt the approach they did or reach the conclusions they did?” ‘
###
That’s his remit and I think it unlikely that a single (comparatively lowly) judge would depart from that.
The inner house might be more robust and take a more holistic, overarching view. The supreme court more so.
The rot set in though with the FTT who, in deciding the case would be heard in private, showed how they were inclined (well two of them at any rate).
……………………………………..
ernie watch what you say about the gruesome twosome as you may upset BRTH who holds them in the highest regard.
——————————————————————————————————————-
Tsk tsk Nan — at least be accurate!
I have never met and have no knowledge one of the majority judges, and have never met Heidi Poone who dissented.
As you well know, I have met and employed Kenneth Muir and always found him to be a stand up guy and a good lawyer.
Does that mean I have never disagreed with him on an interpretation of the law or in an approach he has taken? Of course not.
Even if he is wrong in law do I hold him in high regard? Yes– I still do due to his conduct and ability over a number of cases over a number of years.
Will I get “upset” about anything that is said about him on here? Not even if you call him a masonic, goat following, corrupt, season ticket, secret society toting member of the cabal and self serving fixer.
Why?
Because I am sitting here in my shorts not giving two hoots what anyone calls anyone else.
Now, if you want to go back to where you started from about the Faculty of Advocates and the Edinburgh establishment being a self serving cabal of goat following wannabees who look after their own interests and line their own pocket mixed with people who do show real signs of intelligence and integrity from time to time then I am yer man for a discussion over a pint and a pie.
In fact if you are ever in Oran Mor give me a shout for a Pint a Pie and a Mason act one!
Mind you I can’t guarantee that I will ever get upset …. it is bad for the blood pressure.
Dontbrattbakkinanger
11:10 on 11 July, 2014
“On 11th July 1405 Admiral Zheng left Nanking in CHina to explore the globe in the first ‘treasure voyage’.
He would have left earlier but there was a mix-up with his paperwork.”
That would have been ole Jim Farry’s fault…is Zheng still ineligible btw?
My friends in Celtic,
We know they are dead but very few others do.
This decision will make it so much harder to convince others.
We simply must leave this wretched footballing environment.
Wow, an orange march at the weekend in Benidorm. Is there no escape ?
HH
DONTBRATTBACKINANGER
That’s the voyage around which 1421 is based?
600 years later,the Chinese still scare the Americans.
Not bad music for a friday morning.
Hamilton Tim
Tuesday is going to be a canter, relax:)
The next round could be interesting.
Friendlies can be useful for fitness but with the qualifiers coming up thick and fast avoiding injury is the main thing, so I wouldn’t be giving the key men much more than a half hour.
HH
No one does the blame game better than this mob along with the help of Keith JacksHUN and his cohorts,,,,,,,,,,,,,,,,, res.12 was a good thing and a great tool to use so people in Here as usual are picking up my posts wrong, it all got lost with the ball carriers, in short the guys who where in charge of getting it through to the board didn’t have the balls to carry it through, now you can come away with all the excuses you like, i have no been listening to them for ten months, and to be very honest if your effort in getting a meeting with the board was as good as the effort you are putting up for excuses you may have got some where, you believed Celtic where doing nothing and got res.12 up and running and you got the boards attention, well done for that at least, but the 360degree turn about when you made the secrete agreement with the board sticks in my craw, I said before you went to meet the board to keep your powder dry, I also warned you about going into the big boys playground with shorts on, I got lambasted from all and sundry, and then it comes out that the guys who where going to do this and do that done nothing, hadent a clue, I could be wrong here but if my memory serves me right you went to the Celtic trust for advice? You never told anyone that until after the fact, so as I said res.12 I’m all for it, but as I said then and I am still saying change the line up on the messengers team, the last lot bottled it. And that is only my opinion of which I am entitled to.
Just give him the ball.
Cannot believe that anyone seriously believed that a Celtic supporting judge was ever going to find against the Huns!
The guy would never have been able to live a normal life if he had found against them
Added to the fact that he was not the original choice – it all amounted to another cop out
The only time natural justice will be seen to be done is when there are no Scots involved and when the judges do not live and work in Scotland
Everyone and their dog knows that the loans were never loans but what ordinary people call wages – until this is established all the rest is fancy legalese or semantics
The only good thing about today’s press coverage is the DR headline which correctly says that the Huns were “killed” – even the thickest Hun should know that means they are dead!
HH
BRTH
Just checking to see if you were still on the case BRTH.
Pint and a pie you say?
You must think me a real cheap old slag!
H.H.
PFAyr.
Never been inside Murrayfield, what are the hospitality suites like, better than Celtics, or similar.
Really,so many getting upset by the huns.Who cares?.For me it makes it all the sweeter,that they died for nothing.Imagine the agony going on in their wee gullible heads.
Much more interested in tonights game.Must be next weeks team that plays.Will we at last get a chance to see a glimmer of the “New way of playing”so loudly proclaimed when Ronnie took charge?.So far,not a smidgeon.Same old,same old.
Hope to see Biton,Henderson,Griffiths,Izzy,all get near enough full games.
Great memories about Dukla Prague.
Spiers on Sport: an endless blame-game over the demise of Rangers
Spiers on Sport
Graham Spiers
Thursday 10 July 2014
There is a wearyingly familiar outrage doing the rounds at Rangers after the UTT ruling which upheld the club’s appeal against HMRC over its controversial use of EBTs.
This was an important judgement because it ruled that, despite the distaste many have for EBTs and their perceived manipulation for tax-avoidance, Rangers nonetheless had stayed on the right side of the law.
What the ruling shouldn’t do – and I know this only too well – is forbid anyone among us from decrying the use of EBTs, at Rangers or anywhere else, as a crude means of abusing the law and, in effect, avoiding paying tax.
Not for nothing were EBTs, when used in this way, widely referred to as “a tax loophole”. Everybody and their granny came to know what was going on.
My own view on EBTs hasn’t changed. There have been different outcomes at various HMRC pursuits -such as at Aberdeen Asset Management and at the pre-2012 Rangers FC – but I viewed EBTs, when used as a vehicle for disguised remuneration, as a form of cheating.
Evidently the British government felt likewise: they decided to put an end to the racket in 2010/11. At that point Rangers were force to write letters to various players saying they would no longer be able to compensate them in this manner.
The tragedy that engulfed Rangers, springing from Sir David Murray’s policies, to the wretched arrival of Craig Whyte, to HMRC’s rejection of the CVA in the summer of 2012, has now spawned an industry of blame and witchhunt-calling.
Some Rangers supporters remain upset – rightly – but phlegmatic about it all. Others, though, seek blame everywhere – at HMRC, at the SFA, at the (former) SPL, the media, at the BBC – everywhere except at the former Rangers itself.
The truth of the matter is that the now dissolved Rangers FC plc was done-in by the very people who were charged with safe-guarding the club. Murray, Whyte and many of the old club’s directors bore a very heavy responsibility.
In June 2012 it was also HMRC who, at the crucial CVA vote, drove the stake through the Ibrox heart. A combination of accrued, unpaid debts by Rangers to the tax authorities totalling £21 million – it excluded any projected EBT bills – meant that HMRC in effect dealt the fatal blow.
This was no witch-hunt. HMRC had the mere temerity of wanting its taxes paid. On the contrary, this was dire recklessness by those charged with safe-guarding Rangers. This was self-destruction.
When I look back now to April, 2012, the words of Paul Murray, a former director of the club who tried to beat Charles Green to the rescue act, seem particularly honest.
Murray and I crossed swords on a number of occasions over the Rangers saga but he always struck me as honest and conscientious in wanting to resolve a dire situation.
Just weeks prior to the Rangers CVA being rejected, Paul Murray said: “In my view we have got to try to save the club. The CVA is the only thing that the Rangers supporters want. Speaking as a supporter, I do not want a situation where the club’s history – the timeline – is broken. We are trying to save this club.
“I am very clear: the club has had a number of misdemeanours over the years, and these have to be faced up to. The club has to be punished: I am 100% in agreement on that. We have done things wrong. But any penalties we face must be fair and they must be transparent.”
These days you very rarely hear such openness and clarity about the Rangers case from a Rangers principal. On the contrary, cyber lynch-mobs set after you if you dare to address the Rangers collapse as Murray did in these words.
All this said, yes, there is absolutely redress that needs to be secured over the Rangers collapse. BDO, the liquidators, should ruthlessly investigate alleged fraud around the club over this period.
So should the police who, to the best of my knowledge, still have an open book on the case. Pursuit of criminality in the destruction of the former Rangers should be relentless.
But at some point, the re-writing of history will have to stop. No vendettas did for Rangers FC in 2012. On the contrary, this was a spectacular and tragic self-emolution.
croppybhoy
11:38 on 11 July, 2014
‘The only time natural justice will be seen to be done is when there are no Scots involved and when the judges do not live and work in Scotland.’
####
Which might just happen.
Cadizzy – courtesy of google translate –
“This information is worth everyone’s attention. How can I learn more? ”
…and i’ve no idea what they are talking about either! :-)
Hamilton Tim – I would hope that the team Ronny plays tonight is the one he thinks is his first 11. Will be interesting to see how he thinks going into the qualifiers.
Killing Rangers was an iinaide job
Corrrect
As a tax policy this idea was conceived and rolled out as a policy by davie murray.no one else.
His sfattement was laughable (how comes naebdi believes me when I value somethin).for years murray was laying on debt on rfc due to overevalutuon.this of course was augmented by B.o.S who were v generous over the year’s
In amidst the fog and reshaping of history (rejagation, demotion hahaha soz I just start laughin) there was a 9 min meetin on the 14th june 2012 that denotes forever the question mark over their identity.
murray was a lever financier from day 1 at ibrox,he chanced rfc’s future and lost…not that our media think so haha.but again the wee 9 min meeting sculps their history.
davie murray played corporate russian roulette…lost….hector has been around this tax lark for a while he dont mind someone claimin they won.especially as said entity does not now exist!!!
Self abuse and selt harm.huns dont do insight or review into their actions.
They should..but they wont
Yet more reasons for the hordes to vent their internecine anger and they will.
Celtic 1888-
Petec 11:24
Thanks Bhud i really enjoyed that
10 Metres is the current CQN record.
Nae cheating now.
BTW
Surely HMRC wont let this lie
Was this not supposed to set a precedent to go after other clubs who tried tax avoidance schemes?
Wishing on a star
Shameless plug for a Youtube video I made from a Power Point Presentation that Bob Hamilton, a retired engineer compiled.
Bob shows this at Probus/Round Table evenings and accompanies it with his dialogue.
Worth a watch.
https://www.youtube.com/watch?v=H2gPRSHWGOA
Paul, a magnificent article, one of your best!
Only one that rivals it is this classic from Archie which has stayed with me since 2012.
http://www.heraldscotland.com/sport/football/the-crisis-engulfing-rangers-is-a-lifetime-away-from-when-the-club-seemed-to-represent-unchallengeable-authority-
“Then a comet struck in the late 1960s. They named it Stein. “
Cadizzy These strange posts are google translations into Polish and Czech with redirections to Russian server.
http:// lafa32ver. yolasite. com
Are you a hun?
HH
Might be late attack from Warsaw Pact.
new article posted.
My friends in Celtic,
With respect I think we are missing or avoiding the “fallout” from the decision.
They will be back uglier than ever, with a perceived sense of injustice. Nothing we say or do now will change that. It is too late, we ( and others ) have allowed them to reach this point.
We have collectively put our heads in the sand.
That is the reality we will soon face. Bitterness and bigotry will be the dominent theme when they return.
There is ony one feasible preferable alternative. We must leave.
We as a club have “kept our powder dry” I hope we have been active with an alternative.
HH.
Big Nan
Oh always on a case of some sort — case of Stella, case of Voignier, etc
As for being a cheap date — OK you can have two pies!