POPCORN WEDNESDAY! RFC 2012 Plc (in liquidation) (formerly The Rangers Football Club Plc) (Appellant) v Advocate General for Scotland (Respondent) (Scotland)


THE SUPREME COURT will hand down it’s Judgment on the so called Big Tax Case appeal next Wednesday 5 July at 9.45am in Courtroom 2.

BDO, the Rangers liquidators appealed the Court of Session judgment and took the case to the highest civil court in the land. The Supreme Court heard the arguments on 15 and 16 March this year…

The appeal was heard by Lord Neuberger, Lady Hale, Lord Reed, Lord Carnwath and Lord Hodge.

The issues involved were:

  1. Whether the Court of Session erred in law in reversing the specialist Tribunals below and concluding that payments of “emoluments” or “earnings”, for the purposes of the Income and Corporation Taxes Act 1988 and the Income Tax (Earnings and Pensions) Act 2003, had been made by the appellant to its employees.
  2. Whether, in order for a payment to constitute earnings for PAYE and NIC purposes, it is sufficient that the payment was “derived from” work done by a particular employee and/or it “it formed part of the employee’s employment package”.
  3. Whether the powers which each employee held as protector of a subtrust had the effect that the funds in that subtrust were unreservedly at the disposal of the employee and were earnings for PAYE and NIC purposes.


Murray Group Management Ltd established a Principal Trust for the benefit of its employees and the employees of any group company including the appellant which entered into a deed of adherence. The appellant established a number of subtrusts for the benefit of their employees families. The appellant would pay a contribution to the Principal Trustee with a direction that a sub-trust be established and funded for a family of a particular employee. The employee was appointed protector of the subtrust, and the subtrust trustee would lend the employee money that had been advanced to the subtrust from his employer.

The Commissioners for Her Majesty’s Revenue and Customs determined that these payments constituted earnings for PAYE and NIC purposes and sought to impose charges to tax.

The First-tier Tribunal allowed the taxpayers appeals and held that no payment of earnings had been made. The Upper Tribunal refused the Commissioners appeal. On appeal, the Court of Session held that payments of earnings for PAYE and NIC purposes had been made by the appellant. It found that the payments made to the Principal Trustee, and in due course to the subtrusts, amounted to a re-direction of income.

The Court of Session granted permission to appeal to the Supreme Court on the question of whether the payments were earnings.


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