This whole blogging business has been a bit dull since those heady days when David Murray’s bombast cast a shadow across the land. When most of the population believed he was the smartest person in the country, when he went as far as to assure us that it was his duty to minimise tax liability!
This place has been all about the football for a while now, which is how I wanted it in the first place. But here we are, Back to the Future, all because of a sloppy piece in The Times, who today used unattributed quotes to suggest that Rangers were victims of HMRC, without a shred of reality behind the claim.
Let’s deal with the simple facts first. The highest court in the land ruled that money Rangers paid footballers and executives through an Employee Benefit Trust scheme was disguised remuneration. They accepted HMRC’s claim that tax was due on this remuneration.
One aspect often lost in time, is that Rangers went into liquidation without ANY court in the land finding against their use of EBTs. It was not the judgement that went against them, it was that they made no provision to trade through the period these claims would be examined.
The club and their investors were either unable or unwilling to put the £18m or so on the table that would have paid Lloyds Group overdraft. This would have prevented the sale to Craig Whyte and the club could have continued to trade until (and perhaps beyond) the conclusion of the Tax Case.
What happened subsequently is just window dressing. They went down for the want of £18m that was used to compete for the Scottish Premier League.
By the time the Supreme Court ruled against them, Rangers were in the hands of liquidators, BDO. Administrators Duff and Phelps agreed to change their name so that the Intellectual Property could be sold to a Newco, along with other assets.
Several matters were not examined by the court, specifically, penalty clauses and whether payments made to players should be considered gross or net of tax. HMRC did not pursue the liquidated company on either question, but – and you really need to suspend disbelief here for a moment, The Times today are under the impression that IF Rangers continued to trade, HMRC would simply walk away, that no penalty clause would be asked for!
Honestly, I have never read anything as purile. When you fail to pay tax due and it is economically worth their while, HMRC always ask for interest and penalty clauses. Always. Even from the Mighty Rangers!
Why, though, is someone peddling this line now? Why blame HMRC when the facts are so patently clear and readily available? When I asked someone who has experience of these matters, I was told, “This is a psychopathic denial of responsibility. Part of a parasitic lifestyle”. When you look at it like that, the whole thing makes sense.