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Rangers ‘big tax case' rolls on

9th Mar 2016
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iStock_Martin McCarthy_GR

Rangers oldco liquidator BDO has won the right to appeal against a Court of Session ruling in its long-running EBT dispute with HMRC.

The Revenue claimed that payments made by the football club’s former owners under the Employee Benefit Trusts (EBT) scheme were ‘taxable earnings’, and despite losing at tax tribunals in 2012 and 2014, HMRC won on appeal at the Court of Session in November.

However, Lord Carloway, speaking on behalf of the three judges who delivered November’s verdict, ruled yesterday that the dispute would be extended.

“The court is of the view that there is an arguable point in law of public interest which should allow the appeal to the UK Supreme Court to proceed”, said Carloway. “There are significant issues in this case which may apply to other similar situations."

Legal representatives of BDO are said to be confident of victory in the Supreme Court, with a number of tax experts expressing surprise at HMRC’s victory in November.

Those seeking a swift resolution to this marathon case, however, may be disappointed, as the Supreme Court is unlikely to consider the matter before the spring of 2017.

Cases are generally heard according to the availability of senior counsel, and the fact that this case has proceeded along non-urgent lines for several years means it is unlikely to jump the long line of cases waiting to be heard.

The ‘big tax case’

The disputed scheme involved payments of up to £48m to various offshore trusts set up for footballers and other staff employed under the umbrella of former Rangers owner Sir David Murray's group of companies. The Murray group contended that the payments - made through the now outlawed EBTs from 2001 to 2010 - were loans and not taxable income.

However, in the latest decision on what has become known as the ‘big tax case’, Court of Session judges ruled that if income was derived from an employee's services in their capacity as an employee, it was an emolument or earnings and “thus assessable to income tax”.


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