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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benjibhoy mul
Condolences to you and yours on the loss of your Dad.
R.I.P. John Mulreaney
1, 2, 3, 4
Ramsden cup yer havin a laugh
Paul67 et al
Can anyone recollect offhand what Murray was referred by in the earlier FTT decision.
Was he Mr. Red, Black or whatever? Genuine question.
@ETimsNet 8m
So it looks like Green Brigade will be back at Celtic Park in their usual 111 section this season. Great news.
Celtic Mac @ 20:45
SDM was Mr Black.
https://www.change.org/en-GB/petitions/scottish-government-ban-orange-order-marches-in-scotland
333 signatures needed , please sign and pass it on !
RIP John Mulreany
benjibhoy mul thoughts and prayers with you and your family
Paul67
What a great leader.
Just magic
332 needed now.
HH jamesgang
Tom English’s piece on the grievously conflicted president is a right guid read…..
Aye.
Great to have GB back until they shame the club again.
Aff oot.
Any way the wind blows eh Mr English…
bankiebhoy1,
We’re talking about an executive officer whose responsibility it was to know exactly what was going on, abdicating that responsibility and expecting both sympathy and support to continue in his job as the most important job in Scottish football, WTF ?
edb,
Thats an opinion, its my opinion the club do not start and end in the boardroom.
At no time have the GB embarrassed me, however the board have on many occasions.
Can someone please post a link to what Tom English wrote. I’m being google challenged with my own stupidity!
HH jamesgang
@ tim 332 now :) time to end the hate
Neil
You’ve lost me.
The GB don’t do it for me. Let’s leave it at that.
Or 331 lol
benjybhoy mul
20:03 on 10 July, 2014
God Bless John Mulreany’s Soul, may he rest in peace.
Keep the Faith!
Hail Hail!
Canamalar,
Yes. You mention abdication.
I think impeachment…..
His performance?
Cringeworthy.
jamesgang @ 21:01
http://www.celticquicknews.co.uk/?p=15634&cpage=5#comment-2223818
benjybhoy mul
May your father’s soul Rest in Peace.
You are well able to carry on the torch.
Good evening friends, s’appnin’?
325 needed now Hail Hail Hebcelt
benjibhoy mul
Sorry to hear of your very sad loss……my thoughts and prayers are with you….!!
edb,
Naw, lets no leave it at that, lets face it, you support the demand for conformity to the dividend junky altar.
Bad press from a bad press appears to make your decisions for you.
Sanitisation is the death of freedom and your right on that bandwagon.
morrissey the 23rd
Thanks. Was thinking he’d something else – today – all golf sh1t instead. Easier option!
HH jamesgang
@paulthetim 2m
@ETimsNet been told the gb rumour is not true
Neil Canamalar
You really aren’t very tolerant at all with those who have a different opinion than you …… you seem, for example, to completely ignore the commendable stewardship of our Board throughout the recession etc …… Why don’t you concentrate on getting us a Board statement on RES 12 ……. once we know the bottom line on RES 12, we can then consider the situation(s) with more relevant facts, or do you want us just to agree with your ongoing castigations etc….
morrissey the 23rd
21:12 on 10 July, 2014
What’s the gb rumour, please?
Early signs ….not guid.
Bumpy night ahead…………
much wince-worthy beered-up bravado beckons.
Thoughts and Prayers with a few today
John Mulreany, may perpetual light shine upon you
Nuestad braw, prayers for a quick recovery for your dad
&
Phillbhoy, Hail Hail to your Auld Da :-)
Incidentally, it’s wee Shug (Hugo) the Dugs 1st birthday the morra
Hey Jobo
Hope you’ve had a good day mhate.
Weather fit for Balde it was!
HH jamesgang
Benjybhoy
Thoughts to you your family and friends
Oh yeah, all right Are you gonna be in my dreams tonight?
Love you, love you Love you, love you Love you, love you Love you, love you Love you, love you Love you, love you Love you, love you Love you, love you Love you, love you Love you, love you Love you, love you Love you, love you
And in the end, the love you take Is equal to the love you make
HH
67 heaven. From last page …
morrissey the 23rd
20:46 on 10 July, 2014
@ETimsNet 8m
So it looks like Green Brigade will be back at Celtic Park in their usual 111 section this season. Great news.
http://m.youtube.com/watch?v=esV6pGo8UTI
Dr Phillips Whitford tells it how it is and how it will become
jamesgang
21:22 on 10 July, 2014
Thanks for that …. Hope it turns out to be true