Side-letters, of course, had not been registered with the football authorities

The First Tier Tribunal not only delivered a verdict on Rangers tax case, they also nailed the issue facing an SPL Commission on the non-registration of player earnings.  Certain HMRC assessments were upheld and some declined, as we expected.  The findings:

Some payments were taxable and liable to NIC

Some payments were loans to players and “remain recoverable and represent debts on their estates”

Non-registration of side-letters [with the SFA and SPL]was incompatible with both authorities’ policing and disciplinary powers

The appeal “reduced substantially” the tax demand but upheld that “that advances in favour of certain players are taxable and liable to NIC”.  So HMRC can look to recover much of the EBT outgoing from recipients, whereas the tax and NIC elements will perish with the liquidated company.

I didn’t expect the FTT to report on the non-registration of side letters but they were categorical on this:

“Side-letters, of course, had not been registered with the football authorities, the SFA and SPL. The spirit of their rules was that the whole contract terms should be registered. Suspiciously, no evidence was led as to who decided that the benefits in terms of the side-letters should not be registered. Non-registration of side-letters was incompatible with both authorities’ policing and disciplinary powers. For example any fines imposed on players would customarily reflect the disclosed wage. Non- disclosure would thwart the authorities’ powers.”

The report is anonymised and no indication is given as to which elements of the demand were upheld, which were denied, or the quantum of the demand.

Orders are now open for the very first CQN Annual, get it here!

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