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HMRC to appeal Rangers FC decision

6th Dec 2012
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HMRC confirmed this week it will seek to appeal against the tribunal decision in which Rangers Football Club won a partial decision on its appeals against the department's stance on employment benefits trusts (EBTs) for some of its playing staff.

Last month, the old Rangers organisation, which went into administration owing unsecured creditors including HMRC up to £134m, won its appeal in principle over the use of employment benefit trusts (EBTs) from 2001-2010. The club claimed that loan payments amounting to around £49m were not wages and accordingly not subject to tax.

One of the tribunal judges dissented from the decision, but the tribunal allowed the Rangers appeal in principle, declaring that assessments by HMRC be “reduced substantially.” Two of three judges decided only some of the payments were taxable; many of the others could, as the club argued, be described as loans

Under Tribunal rules, HMRC has now begun the process of seeking leave to appeal the decision.

Former club chairman chairman Alastair Johnston claimed the club would not have gone out of business if the verdict of the tribunal had been known earlier.

Now in the Scottish Third Division club, the Glasgow club was purchased this year by Charles Green and relaunched as Rangers International Football Club plc. Green is now planning to float the company on the Alternative Investment Market (AIM)

The club claims to have pledges of £17m from business investors, and hopes to attract another £10m from supporters through a “Buy Rangers” community share initiative run through the Rangers Supporters Trust. The fund raising efforts should bring the total club value up to £50m.

Shares will be available at a fixed price of £125, with the maximum amount fans can invest being £20,000. Once the fans' investments are collected, the Rangers Supporters Trust will then buy a block of shares on behalf of all investors when the AIM listing is completed.

Rangers was under the control of Sir David Murray when it began using EBTs. He sold the club to Craig Whyte in 2011 for £1 while the tax liability was in dispute.

Replies (4)

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By markfd
07th Dec 2012 09:56

Austerity what austerity...

...clearly doesn't apply at HMRC who can through yet more taxpayers money after a company in liquidation.  The only people who have lost so far are the little suppliers to Old Rangers who will presumably get 0 pence in the pound or thereabouts.  Unaccountable unaffected public servants throwing other peoples money around with no consequence to themselves.

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By nicstone
07th Dec 2012 14:59


Its an FTT decision and therefore not binding.  The club is in administration and, by all accounts, has no money.  What is HMRC hoping to achieve - other than to spend taxpayers money on lawyers?

There are plenty of companies out there with EBTs under review, where the company is still in business.  Would it not make sense to take one of those cases instead? 

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10th Dec 2012 13:15

The case is against MIH- David Murray not just Rangers

Re Austerity What Austerity.

The case is against Murray International Holdings not just Rangers, who are not bust yet. though they seemed to be propped up by Lloyds TSB trying to get the money blown by HBOS back.

HMRC are also trying to set a precedent here as they can apply this to other foootball clubs and also may seek repayment of the loans. They can use this appeal decision as case law against quite a few teams and hopefully recover a lot more tax back to the govt.

In times of austerity is it right that multi millionaires can get away with paying millions into Jersey trusts so as not to pay tax when the rest of us are being affected. Starbucks, Amazon, Google and Vodaphone have all been crticised for trying to avoid tax, this is similar as it was well paid players and executives. I believe 111 in total, though MIH/Rangers did admit in the tribunal that some EBT's were not valid and have to stump up the tax for these. Whether it is Rangers or the players the HMRC go after. This has still to be seen.

Murray paid his own trust £6.2m of 'loans' which he decided he could do on the basis of profits. yet Rangers and MIH did not make profits.

If anyone has a bit of time they should read Dr Poon's minority report which was very informative and very scathing on MIH. basically saying it was them that delayed the case for so long that it took a raid by city of London police on another matter before they could get documents. Dr Poon was the tax accountant on the panel and decided to look at substance over form and review the whole series of transactions and said it was a sham and that the EBT should be revoked. the other 2 judges did not look this for and confined themselves to a narrow interpretation. they did not criticise the minority report which was far longer than their own.

As an aside. All 3 judges agreed that Rangers Staff also admitted to players having side letters / 2nd contracts and decided not to show them to the SFA. they thus had illegally registered players. This is prima facie evidence for the SPL tribunal and will see Rangers stripped of trophies over this. It potentially has wider reaching consequences of other teams being denied money for trophies they should have won.

It looks like this case may still have a bit to go.



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By carnmores
10th Dec 2012 19:25

there is a principle to be establshed

HMRC wants to show that it will go after EBT style behaviour whatver the cost , the cost of a deterent is not easy to judge and HMRC are laying down a marker - they will go after agents next 

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