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.

We are busy pulling the next issue of CQN Magazine together.  If you would like to write an article, or take out some advertising , get in touch, article@cqnmagazine.co.uk.
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  1. BMCUW @ 15 22 .



    Yes —– that is the one . It’s in a box somewhere . I have wee bursts of looking for it and then give up.. One recent dig led to me discovering that I have 2 of the original doo wop version [ Richard Berry ] . Don’t remember buying 1 never mind 2…

  2. Auldheid



    From the atrocious July 27 statement: “Sevco Scotland Ltd has agreed to accept all conditions relating to RFC (IA)’s charges of bringing the game into disrepute, namely the 12-month transfer embargo, beginning at 0.01a.m on 1st September 2012, and payment of all outstanding fines and costs.”



    And: “The Scottish Premier League has reserved its position in relation to the on-going investigation into EBTs”



    And lastly, Neil Doncaster, chief executive of the SPL: “We are pleased to have reached an agreement with the parties concerned … we expect to be in a position to make a further announcement next week on broadcasting rights and the ongoing EBT investigation.”



    Blindlemonchitlin and I were discussing these points this morning. He thinks the reference to “all” will be important to LNS, because Neil Doncaster’s “further announcement”, which came on August 2, 2012, says: “The Scottish Premier League today announced that it has appointed an independent commission to inquire into alleged EBT payments and arrangements made by Rangers in relation to players during the period from 2000 until 2011. The commission will determine whether during that period in relation to alleged EBT payments and arrangements for players, Rangers was in breach of the relevant SPL rules. In the event that the independent commission decides that such breach or breaches occurred the independent commission will have powers to determine what sanctions, if any, are appropriate.”



    Sevco agreeing to accept all the consequences of the “disrepute” rap sets this up nicely.



    I asked Paul67 last week why he though Sevco should face any sanctions LNS hands down (including financial penalties) and Paul made the excellent point that, because Charles Green was able to reach agreement that day with the SFA, the SPL and the SFL, he was able to turn his Sevco pipe dream into a company with a market cap of £60m.

  3. Saint Stivs



    ‘Jinky’ is the best player I ever had the privelege of seeing in the Hoops.



    A joy to watch.



    I first saw him in 1963 – was only 9 at the time and tbh have a very hazy recollection.



    Thankfully I had very many non-hazy recollections after that!




  4. ernie lynch


    14:52 on


    26 February, 2013


    A guilty verdict.



    And no stripping of titles.



    On the basis that they are a new club.



    That would suit me.





    Does that mean their next title is number 1. If so then i would agree to that. Don’t think the Gers will though.

  5. Auldheid



    Just to add. My position is that the statements do not offer enough clarity on this. And I suspect this is deliberate. They have not spelt it out. Journalists appear not to have taken them to task over it. So we are left to speculate.

  6. The Comfortable Collective on

    if the boss of coca cola was uncovered as a secret Pepsi drinker I think it would be expected of him to resign with immediate effect as this would be, for someone in his position, unreasonable behaviour.



    There are not many jobs in the world where drinking Pepsi would be a cause of losing your job. But boss of coca cola certainly is one.



    It wouldn’t make him a bad person, but it is still inappropriate behaviour for someone in his position and resignation is the correct course of action.



    Coca cola would then get a new boss and move forward.



    In the grand scheme of things it is a storm in a tea cup.

  7. Saint Stivs .



    Best Celtic player ever for me ..



    He was fabulous in 1966 / he was fabulous in 1967 . All those Real Madrid fans shouting Ole ! Ole ! were a real testament to how good he was.

  8. Miki67



    Band of horses are a great band. Saw them live at the ABC about 4 or 5 years ago. They finished with the Ronnie Wood song Act Together. Great gig.

  9. A guilty verdict would suffice for me, with the proviso (that’s proviso rather than Provo) that yon 50mm cannon they had at Ibrox the other week is brought back, loaded with live rounds and the entire cess pit is brought to the ground.


    Oh and it has to be covered live on TV and radio Clyde.

  10. Heres my tuppence worth.



    I think they WILL be found guilty,



    they Will be stripped of Titles,



    I think the fact its taking so long is because LNS is being very thorough in the detail explaining his decision.



    Its what they deserve. HH, off oot, as they say.

  11. I think that Chuckles and ra berrs insistence that their history continues will be their eventual undoing regards LNS.

  12. St Stivs



    I first saw Jimmy in March 1968 and until 70-1 I only went intermittently to see the team as I was still in single digits until then. I mind that in that 70/1 season he had a lean time from about the New Year up to and including the away match with Ajax and then hit a truly scintillating burst if form culminating in his masterpiece in the Cup Final replay against Rangers. Older relatives would say from early 68 right through to that 71 final.



    Best performance I saw was on a 7-2 win over the Arabs on a midweek evening just before Christmas 69. Davie Wilson of Utd and formerly RFC ran over to Jinky at the end and carried the wee man off the pitch on his (Wilson’s) shoulders.



    Fantastic memories. 74-5 League Cup final was another Jimmy classic





  13. TwoMacaroons



    I think your right. I also think the Sevco fans sense the same. Their behaviour will only get worse.




  14. It is a little incautious of Paul67 to quote from the FTT judgment.



    There are some very interesting passages concerning the evidence given before the tribunal from the multi-coloured witnesses. It is certainly eye-opening stuff as it gives an insight into the cynical world of the company previously not known as Sevco.



    Unfortunately, as we all know, 2 of the judges decided largely against HMRC. They had exactly the same facts to consider as are contained in the judgment. It begs the question how they came up with their decision given the wholly artificial construct which is an EBT and its use for the payment of “emoluments”. Nevertheless, that is just what they did.



    It is for this reason that I am keeping my powder as dry as possible until LNS issues the tribunal’s judgment. Judges are quite capable of coming up with decisions based on points which were not even discussed at the original hearing. Galling as this is, there is little any of the participants can do about it. The facts laid before the FTT may assist LNS but I do not believe they lay down any guidance for us as to what may be in his Lordship’s mind. He and his colleagues will have to decide not only what inferences are to be drawn from the evidence but also how the law is to be applied. I have read some erudite comments on the blog from other posters about the complexities of the law as it was contained in the SFA’s guidelines at the material times. If I get a spare 3 hours, I might post on this. If nothing else it will act as a soporific for the moon howlers.



    I really wish I knew which way the cat will jump. Will it get its claws out or roll over to have it’s tummy tickled?




  15. Philvis


    My personal emails these days are mostly herbal viagra spam. Perhaps the internets are trying to tell me something… (thumbsup)



    Without that spam would it be thumbs down?

  16. Saint Stivs



    Forgot to say that Jinky should have been European Footballer of the Year in 1967, instead of Florian Albert the Hungarian who was, admitedly, a wonderful player. He was voted in third place that year if I am not mistaken.



    Never even won a POTY award in Scotland – a travesty!



    The only Celtic players to win the POTY award in Scotland between 1965 and 1973 were:



    Billy McNeill……….1965



    Ronnie Simpson..1967



    Bobby Murdoch….1969



    George Connelly..1973.



    A Celtic player should have won it EVERY season!




  17. A thought that ahs been nagging at the back of my head for a wee while btw regarding LNS inquiry…



    Rule D1.13 provdies that “a club must, as condition of Registration and for a player to play in official matches, deliver the executed originals of all contracts of service and amendments and/or extensions of contracts of service and all other agreements relating to payment…”



    I have discussed my view on what “payments” mean for LNS’ purposes, and what they meant for the FTT(T). I think it will be much more difficult for the SPl to establish that the arrangements in cumulo as regards the EBTs amounted to “payments” and therefore there need have been no disclosure to the SPL of the side letters, or the EBT paymwents into trust. I don’t think that fight was lost after the FTT(T), but I think it became much more difficult.



    On one reading of Rule D1.13, all “contracts of service” need to be lodged. The side letters make guarauntees (which arguably stop short of contracting to make payments to players) in respect of certain funding of sub-trusts/reccomending arrangements be made with the trsutees of the MGRT and so forth. I have no doubt that these “guaruntees” in the side letters could have been actioned under the law of contract by the players. In short, I am clear that the side letters constitute part of a general scheme of arrangements making up a player’s “contract of service”, if “contract of service” is interpreted, in Rule D1.13 as a stand alone term.



    However, on another reading, Rule D1.13 only extends to “contracts of service…relating to PAYMENT”. Is the requirement to deliver “contracts of service” a requirement in relation to all contractual arrngements a club makes with a player, or only those relating to payment? Unhelpfully, the Rule is capable, literally, of bearing both meanings. I think it has been drafted in such a way as to ensure that all [documents] “relating to payment” must be lodged, not that “all contracts of service” must be lodged. I think they might get away with both the “undisclsoed payments” part of the charge, and the “second contract” part of it as well.

  18. Che


    16:01 on


    26 February, 2013


    A guilty verdict would suffice for me, with the proviso (that’s proviso rather than Provo) that yon 50mm cannon they had at Ibrox the other week is brought back, loaded with live rounds and the entire cess pit is brought to the ground.


    Oh and it has to be covered live on TV and radio Clyde.




    Never took you for a Liberal.

  19. Phyllis Dietrichson on

    I still maintain Jimmy’s greatest game was the 1974 Atletico Madrid nightmare – a famous picture in the following day’s paper showed the extent of how badly he’d been beaten up – but he still came back for more. An incredible display of courage on a shameful night for football.

  20. Voguepunter’s first bike was a Chipper, he has progressed to a Chopper,which he has kept in mint condition to this day.

  21. TinyTim mine was a 2.0GL 1976 26000 miles on it when I got it about ten years ago


    drove it every day until my heid went bust

  22. VP


    I’ve calmed down a lot since moving out to lenzie.


    The odd stagger into Bar 67 usually sorts that out tho.

  23. Parkheadcumsalford



    Yes , they lurk on here and have done for years , one of them made me aware of this site just after black Sunday , nearly eight years ago now where did the time go.

  24. Tallybhoy @16:10 more shame them.



    I’ve never read a bad word against any of the men of 67 with the exception that Bertie Auld could be a bit rough at times. But even when I’ve read that, the description betrayed real admiration for his panache in that role.


    We love and honour them all.



    One pleasure I have experienced was seeing a Celtic fan in his twenties, having overcome the hurdle of watching in black and white, develop an appreciation of what great players they were.



    We’re all talking about old age today. The only thing that ever makes me wish I were ten years older is knowing how much more I would have appreciated those guys.

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