More key information from FTT report for Nimmo Smith Commission


The enormity of the forthcoming SPL Commission report could easily be lost in the ocean of headlines which has engulfed this matter in recent years.  I’ve noted below more information from the recent First Tier Tribunal report on Rangers tax case, in an attempt to clarify some of the key issues.

From The Evidence:

“The Appellants’ first witness was Mr Red, a senior member of the group’s tax function.  He is a Chartered Tax Advisor and qualified as a tax inspector previously to joining the Appellants.”

“Mr Red insisted in his evidence that the Trust was not a means of “tax avoidance””.

“It was noted in an internal memo prepared by Mr Red dated 8 September 2005 to the Board of MIH that he had described the Trust as a form of “tax avoidance scheme””.

Dissenting opinion from Ms Poon:

The Nature of the Side-letters
“Another strand of evidence being tested was the nature and purpose of the side-letters.  Asked about the secrecy surrounding the side-letters, referring to the fact that they were not lodged with the SFA, nor disclosed in the long period of HMRC’s enquiry, Mr Red’s reply was: ‘I still say there is nothing secret about them. We have nothing to hide in these side letters’.

“It is not accepted that there had been no deliberate concealment of the side-letters, in view of how the first side-letter only came to light through the seizure of Mr Berwick’s file nearly four years into the enquiry.

“It is not accepted that the nondisclosure of the side-letters arose from a ‘credible’ view that Mr Red considered the side-letters irrelevant to HMRC’s enquiry. As a former Inspector of Taxes, Mr Red knew, or should have known, that the side-letters were highly relevant to the enquiry.”

“The side-letters showed a form of contractual arrangement, and they proved linkage between the sums contributed into the sub-trusts at the appointed dates and their withdrawal as loans from the sub-trusts as contemporaneous transactions. The contractual aspect and the linkage between the amounts of contributions to the main Trust and the sums loaned had been repeatedly raised in the enquiry correspondence.

“A fair conclusion to be drawn from the circumstantial evidence on the one hand, and Mr Red’s oral evidence on the other, is that the side-letters had been actively concealed. The reason for the concealment might have been, in Mr Red’s view, the side-letters could be incriminating evidence against the impression of the trust operation that he had been trying to give.”

“While not denying the proposition put to him by the Respondents that ‘there’s an overarching contract with each of the footballers, consisting of the written contract and the side letters’, Mr Red maintained that ‘it’s our view that the side-letter or the letters of undertaking do not need to be registered or lodged with the SFA’ (Day 3/31-32).”

So, in evidence, Rangers witness Mr Red, did not deny the proposition that there was an overarching contract with footballers consisting of the declared contract and side-letters, but “it’s our view” that side-letters did not need to be lodged with the lodge SFA.  Ms Poon suggests a fair conclusion is the side-letters were “actively concealed” as they could be “incriminating evidence”.

The SFA has issued disciplinary action against many clubs for erroneous registration but no club has ever faced a charge of actively concealing information necessary for proper registration.

The SFA president was a working director of Rangers when “our view” was established and was legally responsible for the club’s actions.  As I noted yesterday, but, frankly, can still not comprehend, on publication of this report the president announced himself “somewhat vindicated” by its contents.

Majority opinion:

John McClelland became a board member of Rangers in 2000 (legally responsible for conduct and oversight) and according to Wikipedia held senior board level positions in the electronics industry.  He was also a director of the SPL (legally responsible for conduct and oversight) between the company being formed 1997 and 2008.

The majority opinion, which favoured Rangers position in regards to income tax, noted the following about Mr Indigo, who was “a board member of Rangers since 2000. His previous career was in industry, latterly serving in senior executive roles.”

Mr Indigo “acknowledged that he was, however, aware of the overall content of arrangements made with players and did not consider these to be “secret”. He believed that the Trust had been used to pay appearance money and bonuses.”

According to rules established by SPL directors, including Mr McClelland, money paid in connection with football, including appearance money, has to be registered with the league.  It also has to be registered with the SFA.

When the Lord Nimmo Smith Commission reports, we will discover if this is what passes as vindication in Scottish football, or if a senior officeholder of the SFA, and others, will be dismissed in disgrace and banned, sine die, from the game.

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  1. I'm Neil Lennon (tamrabam) on



    I guess since I mentioned Barca and Real then your point is aimed at me.


    If Im wrong about the debt then I stand educated and wont get into any accountancy style debate but the barca website them selves seems to reports that their debt is around 300 million euros.


    Like I say im no accountant and bow to anyones superior knowledge of reporting nuances.




    And it seems that the Madrid website talks about debt of more than 120 million euros


    Jointly these two teams seem to owe almost half a billion euros, not good reading for perhaps two of the three most famous sides in Europe


    (celtic being the other)

  2. south of tunis:09:39 on 27 February, 2013miki 67 @ 14 26 26 2 13




    Made my day that,after one of the coldest darkest nights of the soul I have ever known.


    So……in a cacti vein I give you ,’Rose of Cimmaron’.




    See, I used to hitch-hike across vast plains with people playin’ this kind of muzak as the sun set behind the bullet pocked suagaro.


    Back then I kept a plentiful supply of “Acapulo weed, no stems and seeds that you don’t need…..Acapulco gold is bad-ass weed”. Kept them good ole’ boys mollified and mellow.


    A simpler time, so muchos gracias for naming a prickly plant after yours truly.


    You may now call me Freewheelin’ Frank………the true spiritual avatar of miki67.


    : > )

  3. Steinreignedsupreme on

    Sunderland midfielder James McClean closes his social network account after his tweet about a Wolfe Tones song the Broad Black Brimmer last weekend.

  4. The Battered Bunnet on

    Art of War



    I see no signs that the EPL is going anywhere but onwards and upwards. While some clubs might have problems periodically due to their own business models failing, the growth of the league as a whole will only be interupted if Sky finds itself without competitors for the EPL TV rights.



    The introduction of BT scared the heck out of Sky and caused them to vastly increase their offer to keep hold of the rights, without which Sky has a much diminished subscriber base.



    So long as there is competition for the TV rights, the EPL will continue as is. Given the emergence of BT onto the scene, the sale of Virgin Media to Liberty recently, the interest of Al Jazeera in mainstream European channels, and the predicted entry into the market for high value content of such as Apple and Google, there are likely to be more ‘owls in the forest’ than fewer so far as teh EPL is concerned.



    The bubble has been predicted to burst for a decade. It’s twice the size it was then, and still going.



    It ain’t popping anytime soon.



    IMO of course.




  5. The Battered Bunnet on




    Not especially aimed at you, but if you were discussing it, happy to help.



    Spanish clubs use a different reporting standard to UK. To get a comparison, you need to compare apples with apples and all that.



    Both clubs have massive ‘liabilities’ because they have massive businesses. The more you sell, the more you buy and the more you buy the bigger the liabilities at any given point in time.



    Debt as we report is the total due to cash funders, less the total cash on deposit.



    For Celtic, that’s £130K as at December.



    For Real it’s €30M at end June last year.



    For Barca it’s €99M at same point in time.



    Hope that helps.

  6. Prodigal Tim @03:31 oasks “Am I the only one that wants to see Dylan McGeoch play the Kris Common role? I think he is a potential star in that role. Anyone?”



    PT I think he’ll star in many roles.


    He has balance to match his first and second touch, and heart.

  7. The Battered Bunnet



    11:45 on 27 February, 2013



    Another advantage that Madrid has over its European competitors are the tax laws in Spain. Spain’s tax laws mean foreign players pay tax at about 23 percent for the first five years that they are in the country. So if Real wants to pay Kaka £8 million after tax, it would cost them about £10 million a year, whereas it would cost Manchester United £16 million (thanks to the new 50 percent top marginal rate in England).



    Over five years, that’s a difference of £30 million on just one player. Multiply that £30 million by three or four players and it is easy to see why Real can afford the salaries they can.



    Finally, there’s Real’s status as, effectively, a non-profit social trust. This means they do not need to generate £30 million a year just to service their debt (like United). Most of Madrid’s dent is held with local banks, many of whom are under political and social pressure not to tighten the screws. Real are too big and too important to fail or to come under the kind of debt pressures that affect traditional clubs. The club’s social, political, and economic significance dwarfs that of any other club in the world.

  8. miki67 I’ll echo Jackie Mac. Let us know how you are – good, bad or indifferent..



    I don’t see much of my big pal who beat it 2 yrs ago. I don’t mind because he’s changed his life and he’s happy.



    Forza miki67.

  9. The Battered Bunnet on




    The tax one, while true for many years, was nailed recently with both clubs being handed fairly substantial back taxes assessments, and the new regime being more appropriate to Spain’s reality.



    As for bank debt, they have about €130M owing, offset by around €100M cash on deposit.



    How’s tricks btw?

  10. miki 67.



    Freewheelin Frank ?



    I recently irritated a Sicilian biker by telling him I’d tried to read Frank’s book and had given up on it . I upset him even more by confessing that I had quite liked the Hunter Thomson book .. Think I was born to be a pedestrian ..



    Take good care of yourself..

  11. Margaret McGill @12:17 the situation you describe re Spanish Tax Law is illegal under EU law covering discrimination, and deflections of trade.


    EU officials have an arbitrary approach to the enforcement of EU law.


    A bit like Scotland. The SFA, etc …

  12. I speak of course of The Fabulous Furry Freak Brothers when mentioning the legendary Freewheelin’ Frank, a superb comic creation……not one of these ersatz zen philosopher bikers.


    Thae types coulda done with a mad weekend in The Scotia Bar, now and zen…….