Tax, rules, Juninho and EBTs


The SPL yesterday released a statement concerning the Employee Benefit Trust payment Celtic made in 2005 to Juninho, in response to what sounded like unfounded allegations made earlier this week.

The league noted, “we have seen reports regarding an EBT in relation to a former player of Celtic FC.  The SPL has investigated the arrangements and documentation in that case and has determined that there is no evidence of any breach of SPL Rules”.

Many good employers have understood the benefit of assisting individual members of staff during times of crisis or personal hardship.  One very practical way of doing this is to lend them money, which happens in businesses up and down the country every day.  When the nature of these transactions involve either a company of sufficient size, a lengthy repayment period, or a high value loan, a formal structure is needed to establish the terms of the transaction, not only for the benefit of employer and employee, but also for the tax authorities – who authorise tax-free payments of this kind.

These tax rules were not established to allow wealthy individuals to escape their social duty.

Not long after Rangers first operated an Employee Benefit Trust Celtic were approached and offered consultancy to establish a similar scheme.  The promised benefits were huge, vast quantities of cash would no longer go to HMRC and would be freed up to spend on new players.

Celtic were not convinced.

Loans would need to be repaid and if not, contractually binding transactions would need to be documented in accordance with SPL and SFA rules, and this very documentation would make them liable for tax.  For Celtic, EBTs could only be used in limited circumstances, would be unable to deliver a significant impact on the business, and would introduce a further layer of professional costs.

“How can these work?” That was the question. How on earth can a club pay millions of pounds into a Trust none of which is contractual? Players, and their agents, like to have things written down. If you write it down and inform the authorities, you’re taxed on it. Celtic were not prepared to enter any written agreement and not declare it to their auditors, HMRC or the football authorities.

What was the cost of this principled stance?

In season 2004-05 former World Cup winner, Juninho, arrived at Celtic from Middlesbrough on a straightforward contract, his only contract with the club, which was correctly registered with the football authorities.  He only lasted eight months before agreeing to terminate his deal.  Celtic made a payment of around £750k into an EBT the player had from before his time at the club.

Celtic informed HMRC of the details of their EBT transaction with Juninho and were told this was regarded as income, not a loan, and that they would need to pay tax.  Celtic then paid tax due on top of the £750k which went to Juninho.  It was a pointless and expensive exercise for Celtic, but they dealt with it honestly and openly.

The club’s understandings of EBTs from five years earlier were confirmed, this was not a way to avoid taxation by filtering part of a player’s income away from PAYE.  Board members of any other club which understood how to make this work were clearly a lot smarter than our guys.  They were also able to buy players and win leagues while our board were hammered daily for their prudent values.

I bet directors at that other club are sounding pretty contrite now, humbled by the emerging news. There will be no self-serving vainglorious rabble rousing.

Far from Celtic being subject to criticism on this matter, scrutiny of their actions will only reveal the stark cost of following the rules when others don’t.

Congratulations to the campaigners who for 23 years sought Justice for the 96.  We all watch the game in a safer environment because of the loss endured by the families bereaved at Hillsborough.  Yesterday’s report condemns the actions of many: some senior police officers, sections of the media, one or two of who should never work in the industry again, and a former MP, whose actions were truly appalling, and who remains a knight of the realm, but those running the game, those responsible for Health and Safety standards, and various governments have a responsibility to bear.

Dangerous crushing inside and outside football grounds was a fact of life in the 1980s, including at the Janefield St entrance to Celtic Park.

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  1. celt55


    14:30 on


    13 September, 2012


    Chris McLaughlin saying Scott Brown should be available for the weekend.






    Thats him out then!!! ;-)



    To be serious did Neily not say that he would just be used for the CL games for a good while?

  2. Neil Lennon has stated the only casualty from the Internationals is Samaras.



    Scott Brown stated the rest had done him good and he should be fit for Saturday and Wednesday.



    Stated Celtic park was a happier place , everyone is bouncing about looking forward to games.



    We’re not thinking about Bnefica. The SPL is always the main thing for us. We want to keep that trophy.

  3. traditionalist88 on

    ‘Note that there is no side contract for Juninho’



    There you go huns – what has been public knowledge since your desperate, pathetic attempts to drag anyone else into your mess.




  4. firstly, the sfa,spl, know fine well what the former club rangers had done via the dual


    contracts, secondly, they know they are guilty and are delaying in hope that it will gradually


    become unimportant as time goes by and probably deperately hoping to find some sort


    of loophole so as to avoid stripping titles,through all this charade there has been an overwhelming lack of will to deal with the former clubs cheating,thirdly the reason why


    this is so because the governing bodies have to some extent been involved in this whole


    institutional form of cheating by either being directly involved or turning the proverbial


    blind eye, it is impossible to have done what they have done for so long and not had some form of co operation,to try and suggest otherwise is ridiculous and beyond credability.

  5. TET



    If my memory serves me correctly, i’m sure the Liverpool chairman at the time pleaded with UEFA to change the venue from Brussels due to the state of the stadium. UEFA declined and also went ahead with their ‘neutral’ part of the ground despite both Liverpool + Juventus vehemently opposing such an area

  6. Greenjedi



    I thought that too, but as Mort and AsonofDan said. Scott is talking about being back and fit.

  7. saltires en sevilla on

    No Bobby Does It Petta


    14:29 on


    13 September, 2012





    It also possible that certain peepul at the SFA were bustin to dig up some dirt on those pesky tims.






    Aye – no doubt about that -totally backfired :-)




  8. Yon Rangers Media article is a take on the Daily Record article yesterday- an English sports lawyer who wanted to remain anonymous (for his own safety no doubt) said ole Charlie hasn’t a hope in hell of stopping titles being stripped- if the SPL deem this appropriate.

  9. A lack of clarity persists across the whole of football regarding Rangers because of the appallingly bad joint statement the SPL, the SFA, the SFL and Sevco released on July 27.



    It told us that everyone had reached agreement about transfer of the transfer of Rangers’ SFA membership to Sevco, but gave no detail whatsoever on:



    1. Which bits of Rangers would transfer to Sevco along with it and which bits would not.


    2. Who decided which bits went across and which bits did not.


    3. What criteria they used to make that decision.



    If some brave soul in the MSM could find it in his or her heart to ask any or all of the signatories of the joint statement these three simple questions we would have a lot more clarity. They are still making it up as they go along.



    This is a world in which nothing can be hidden. Scottish football needs to make whatever changes to its set-up are necessary so that it no longer has anything to hide.

  10. Ten Men



    For sure Liverpool were wanting the game moved.



    In a way, uefa were responsible.



    Thatcher and her government were delighted, still nothing was learned, and it took the death of 96 innocents to do something.



    Even after Valley Parade in Bradford, where 56 died for the sake of good housekeeping, nothing was done.

  11. Celtic_First



    Also. part of the agreement for sevco to obtain a licence was to pay ALL football debts.



    They have not paid any outwith scotland, and they were only paid due to money being with held from oldco.



    They are breaking their terms of their licence agreement.

  12. jude2005 is Neil Lennon \o/ on

    I see the jobless total has went up. No wonder wiggwam duffers has got most of them. First he was at doomdome then hunden, then back to doomdome then back to hunden. Then we see him at the ramsden cup draw, then on ss1 then on the sportscene hun only panel, Radio clyde, Radio Scotland. Oh also has a spread in the Sunday Post. Geeza a job duffers??

  13. Neil canamalar Lennon hunskelper extrordinaire on



    I dont understand how severance pay can be interpreted as anything else but termination of contract, an agreement that football services are no longer required.


    The severance was not for services rendered as he was paid for services rendered


    The severance was not for anticipated services as this was a termination and nothing more was anticipated.


    The severance was simply a buy out of the remainder of the contract agreed by both parties that all football services are terminated therefore the requirement to even register this was a courtesy rather than a requirement as from what I understand the sfa requirement is based on remuneration for football services, now I am not as genned up as many and am usually wrong when trying to equate legalities with logic, but for me logic dictates that if the money is to terminate football services then sfa requirements are not applicable, especially as you say when there were no seperate written guarintees he was due this money.


    mumble mumble something like that, innit :o)


    hail hail

  14. It is ironic that a group of men who put such trust in The All Seeing Eye are so often found to be turning a blind eye to so much.

  15. Neil canamalar Lennon hunskelper extrordinaire on

    Ten Man…,


    I thought the complainy was about having rival fans on the same terracing

  16. Another couple of thoughts…



    The SPL “jurisdiction” argument being thrown up:



    Regardless of whether newco or oldco is regarded as “Rangers Football Club” from a footballing regulation point of view…one thing is certain…one of them is at present Rangers Football Club!!! With that in mind, the SPL have invited BOTH parties to attend and make representations to the Commission. Newco hardly make it easy for the SPL to identify the relevant party to the proceedings by, on the one hand, screaming from the Copeland Road stand that they are “Still Rangers” and then screaming, equally vehemently, the exact opposite when it comes to discplinary matters. Nevertheless, either Newco, or Oldco, is a party to these proceedings.



    Ignoring the dubious commerical and sporting reality of recognising newco as a continuation of RFC1872 for a second, it also seems to me that if newco want to lay claim to all those nice trophies, they have to put up with all the dirt that comes along with them, including this commission.



    Harper MacLeod:



    Firstly, law firms are adept at managing conflict of interest scenarios. Anyone cliaming a lawyer hasn’t, or that a law firm hasn’t, managed such a scenario best have proof to back that up.



    Secondly, wherever you look in the exceedingly small Scottish legal world (or the even smaller scottish sporting legal world) one is likely to come across a qualified person who has represented a party interested in this affair. Would someone who represented and advised a Rangers EBT recipient be disqualified from accepting instructions to investigate the scheme? Possibly. Would her entire firm? Almost certainly not. Truth is there are very good reasons to appoint Harper Macleod as the investigator. They drafted the rule book. They have represented the SPL for many years. They have a very well respected sporting and regulatory compliance background. And, most importantly, they are not on the Commission panel!!! To try and undermine the Commission by pointing the finger at Harper Macleod is to fundamentally mis-construe their involvement in the process.



    The decision on this won’t be taken by Harper MacLeod, it will be taken by the Commissioners. It hardly needs to be stated, but anyone seeking to impugn the character of two QCs and a High Court Judge, well, they can place their head above that particular parapet if they like. They’d best have proof.



    Rangers (newco and oldco) were offered the opportunity to comment on the selection of the Commissioners. They had the opportunity to attend and make comment on procedural aspects of the Commission. They have failed to do so. That is up to them.



    The Commission is not a kangaroo court. It is not a mickey mouse environment. It is a well established disciplinary body with clear parameters and, it would appear, plenty evidence available to it to reach its decision. The mud-slinging propaganda towards it from Edmiston Drive has to be combated.

  17. jude2005 is Neil Lennon \o/ on

    I think fat sal will demand to know who the anonymous expert is. The can take the titles one that is.



    Oh the joy!!

  18. The Exiled Tim



    Correct, amigo.



    It’s also interesting that the statement includes unchallenged quotes from Charles Green in which he refers to his club as Rangers and says the ongoing issue with the SPL is over EBTs.



    Unchallenged. Say whatever you want Charles.



    I had a wee look and could not see the joint statement anywhere on the SFA website, but it looks to me very much like the work of Daryl Broadfoot.

  19. traditionalist88 on




    Exactly – the attempts to portray the whole thing as a straightforward change of ownership are laughable- that the MSM are feeding the myth is unsurprising, especially after rags like the Record carried front pages saying that the ‘taxman had brought 140 years of Rangers history to an end’.



    They seem to have been looking for any crumb of comfort to convince themselves Rangers still exist- I wonder why there was no front page pronouncement when they found one. Would have been big news if Rangers didn’t actually go bust, wouldn’t it?!



    Yet no shouting from the rooftops – instead they subtly started using the word ‘Rangers’ again to describe the newco, and portray it as a change of ownership.



    Problem is, Charles Green didn’t buy Rangers- he bought assets belonging to Rangers. And he can’t claim the history of Rangers any more than Man City can claim the history of Arsenal, no matter how much money they offered!




  20. canamalar…



    The severance was a payment Juninho was paid in lieu of contractual entitlements; these contractual payments were presaged as being compensation for footballing activities in months 9-24 of his contract of service. The severance payment was therefore, in my opinion, a payment for footballing activities. There is case law on this. Shilton was taxed on the payment he received from the club he left when he joined Forrest (Stoke?). The payment was by (Stoke?) for the unexpired portion of his contract. A tax tribunal held that it was a payment in lieu of compensation (wages) , therefore an “emolument” and therefore taxable. The Juninho severance payment was for the same thing, therefore I interpret it as being related to footballing activities, and required to be disclosed to the SPL. Don’t worry though, it WAS disclosed to the SPL. Celtic didn’t need to disclose use of an EBT any more than they would have had to disclose making the payment to a different bank account, or in a different currency. Celtic are fine on this, I’m sure of it.

  21. Unsure if already posted – Telegraph 12th Sept 2012



    Former HBOS director Peter Cummings has been fined £500,000 and banned for life from working in the City.



    The action against HBOS’s former head of corporate banking is the most draconian to be imposed against a senior figure at any of the banks that were bailed out during the financial crisis.


    Mr Cummings has been widely held to be responsible for the lending that led to a multi-billion pound bailout of the bank and then it being taken over by Lloyds Banking Group.


    In its report into HBOS’s near collapse, the Financial Services Authority concluded the bank was guilty of “very serious misconduct”. It also found the corporate division was the “highest risk part” of the bank.


    The City watchdog decided to waive what could have been a £50m to £100m fine against the bank to save the taxpayer further expense. Following Lloyds’ takeover of HBOS the bank is 43pc owned by the taxpayer.



    Mr Cummings’ punishment puts him in a select position. He is one of the only bankers from one of the bailed out banks to have been fined in relation to misconduct leading up to the financial crisis. Only he and former RBS director Johnny Cameron have received bans. The FSA said the fine levied against Mr Cummings means all current investigations connected to the bank are concluded.


    However, chief executive of the FSA, Hector Sants, has publicly stated that other prominent bankers from the period, such as former RBS chief executive Fred Goodwin, would not be allowed to work in regulated positions again.


    Mr Cummings’ punishment comes six months after the FSA published its intial report into failings at HBOS.


    In it, the FSA said: “The corporate division pursued an aggressive growth strategy, the effect of which was to increase the risk profile of a business which was already focused on high-risk, sub-investment grade lending.


    “Corporate did so despite known weaknesses in the control framework, which meant that it failed to provide robust oversight and challenge to the business.”


    In a statement Mr Cummings said he rejected the FSA’s findings but would not be appealing the fine.


    He said: “Many people must bear collective responsibility for what happened, including governments and regulators as well as the boards of the banks themselves. But the fact that I am the only individual from HBOS to face investigation defies comprehension.


    “The decision to single me out for investigation is even more grotesque given that even the FSA has to admit in its notice that other senior people were involved in the critical decisions for which I am taken to task. This is tokenism at its most sinister, and has made it feel throughout like institutional oppression.”

  22. traditionalist88


    15:12 on


    Problem is, Charles Green didn’t buy Rangers- he bought assets belonging to Rangers.




    Do not want to be nit picking but I think we should remember that he bought ‘certain’ assets.

  23. Neil canamalar Lennon hunskelper extrordinaire on



    but stoke were paying for anticipated services, no, therefore it was football related and needed to be declared.


    Celtic were paying to terminate all services therefore IMO it is actually non football related.


    But as I said my logic and law have rarely been on the same page.


    Agreed regardless of my misinterpretations Celtic have taken no chances.


    hail hail

  24. 67Heaven ... I am Neil Lennon..!!.. Ibrox belongs to the creditors on

    the exiled tim



    15:03 on


    13 September, 2012



    VERY valid point ………. Think SFA have got themselves into deep water, trying to keep the bhuns (revenue) in the SPL…….. But they didn’t take the fans reaction into account …… I think they are now starting to sort it out, thought…..AT LONG LAST……..



    greengo definitely has an agenda…!!!!! ……..and it’s ” how much can I walk away with here, and how soon”

  25. 67Heaven ... I am Neil Lennon..!!.. Ibrox belongs to the creditors on

    Can anyone recall the MOMENT they said to themselves. “oops, there something going on here”



    My MOMENT was when Murray suddenly ‘moved’ some of his oldco shares……..

  26. Canamalar,



    Stoke were paying for the unexpired portion of his contract. This was construed by the tribunal as an “emolument”, which in his case could only have been paid by Stoke to compensate him for footballing activities (otherwise why else pay him for it). Long story short, Stoke were due to pay him for playing football and had he stayed, would have had to do so for another x years. Because he left early, and for a transfer fee presumably, they paid him up in compensation for wages otherwise due for footballing activitities. Albeit the payment was in respect of footballing activities all parties agreed would never take place again in a Stoke shirt.



    Anyway, even if I’m right, and it was a payment for footballing activities, celtic are still fine!

  27. Neil canamalar Lennon hunskelper extrordinaire on



    there was also the possibility the contract could have been broken and terminated at any point in that future 9 – 24 months which would have voided the contract, no

  28. Som mes que un club on

    Courtesy of UEFA.com



    The mere mention of Lisbon is enough to get everyone connected with Celtic FC excited. After all, this is the city where they made history on 25 May 1967, when Jock Stein’s side became the first British team to lift the European Cup following a 2-1 victory against FC Internazionale Milano at Lisbon’s Estádio Nacional.


    Celtic supporters need little excuse to make a pilgrimage to the scene of their greatest triumph and after a four-year absence from the group stage, the presence of SL Benfica alongside FC Barcelona and FC Spartak Moskva in Group G will be viewed by the supporters as an added bonus to being back among Europe’s elite.


    What they can achieve in this season’s competition, Celtic’s 50th European campaign, is another matter altogether. As fourth seeds, Neil Lennon’s side are realistically competing for third place; anything more would be seen as punching above their weight.


    Captain Scott Brown and striker Giorgos Samaras are the only survivors from Celtic’s last outing in the competition, so Lennon’s newly assembled team, featuring emerging talents like winger James Forrest, will need to hit the ground running when they host Benfica on Wednesday.


    ©Getty Images


    Celtic defeated Helsingborg in the play-offs


    Traditionally, Celtic Park has been something of a fortress on UEFA Champions League nights, with the Glasgow outfit suffering just two defeats in 18 group stage matches. Having featured in many of them, Lennon and his assistant, Johan Mjallby, know only too well how much the crowd can influence these occasions. If Lennon can impart that knowledge and harness it to an increasing sure footedness away from home, Celtic could emerge as a surprise package.


    However, 45 years after the club’s finest hour-and-a-half, Celtic are relieved to be back at Europe’s top table surrounded by old friends such as Eusébio’s Benfica. The Eagles icon has painful memories of playing at Celtic Park, Benfica having lost 3-0 in 1969. They went out of the European Cup on the toss of a coin after the first leg had finished with the same scoreline. A similar rub of the green would suit Lennon nicely next week.


    The opinions expressed here are the writer’s own and not those of UEFA.

  29. 67 Heaven,



    The Boumsong deal: bought for nothing, sold for 8million to a former RFC manager three months later. I seem to remember there was a story that he and his girlfriend had had an argument with some of the corporate bods at Ibrox. Total flop at every club he was subsequently at. The whole thing stank to high heaven.



    I thought they might be in need of cash then. Never in a million years did I think what has happened, would actually happen…

  30. canamalar,



    not sure what you mean, the disciplinary process is in respect of payments made. celtic ould only be brought into this if the Juninho payment was (a) a payment; (b) made to him; (c) made in respect of footballing activites and (d) not declared in his contract of service.



    The only payment made to him which is subject to any scrutiny is the severance. When it was made, it was made in lieuof compensation to Junino in the form of wages he would otherwise have been due for his “footballing activities”.

  31. canamalar



    Ten Man…,



    I thought the complainy was about having rival fans on the same terracing



    That was part of the complaint. Both clubs main concern was having a section (Z) where both sets of fans could openly purchase tickets for. The vast majority in this section were Juventus fans. Like a lot of major cities it had a large Italian community who were able to purchase the tickets at the stadium. Along with a number of ticket touts. After the Liverpool sections had sold out,this is where some Liverpool fans had purchased tickets for

  32. Manchester City are one of a number of clubs holding talks with UEFA ahead of the implementation of Financial Fair Play in order to convince them that they aim to achieve long-term sustainability, ESPN can reveal.



    The FFP rules being introduced by European football’s governing body mean clubs must break even within a margin of “acceptable deviation” of €45 million over the first two years – next season and the one after that.



    Any club showing a loss of more than that figure will be punished by UEFA sanctions, with City and Chelsea the two most vulnerable in English football because of their high levels of spending.



    But a City source told ESPN: “The ambition of the club, from the outset of new ownership in September 2008, was to build a sustainable football club. The club remains fully committed to that principle.”



    City are not alone in holding direct talks with UEFA about the issue. ESPN understands that up to 19 clubs across Europe are currently involved in similar discussions.



    The club’s claims to be chasing long-term sustainability will be received sceptically in many quarters. The Premier League champions have bought many of the best players available, running up an enormous wage bill and running at record losses.



    However, this summer’s transfer window showed they are no longer willing to pay vastly inflated fees, even though that meant manager Roberto Mancini missed out on his prime targets. Instead, the club bought in less expensive players.



    They are cautious about Premier League plans to introduce a domestic version of FFP  an approach, an insider told ESPN, that could be shared by “three or four” other clubs.



    But with 14 votes required to push through Premier League FFP rules, the chances are that they will be brought in for next season.

  33. Ordered Downfall pre publication with Amazon and now have a late Sept delivery estimate versus the 11 Sept when originally ordered. Have now cancelled.


    Went into local WHSmith in Greenock, asked for book and was told they were not stocking this title.



    Anyone else having the same trouble?

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