4 Nov 2015

Rangers: what happens now after court decision?

So what now? A Scottish court has ruled that Rangers were comprehensively cheating the taxman whilst winning titles in the early years of this century.


First, those who have lost the appeal – the Rangers Oldco and others – will now have the right to appeal to the Supreme Court.
Whether they have have the pockets or the will  to do that remains to be seen.

The judgement of three Scottish Law Lords is comprehensive and damning that all those Rangers execs and players should have been paying income tax just like you and I.

Further, the judgement’s liberal use of phrases like ‘common sense’ and ‘self-evident’ appears to be sending the signal that matters should never have been allowed to get as far as they did with this case. They may well also be sending a signal with this kind of language that any appeal would be futile. But we cannot be sure.

HMRC, empowered by today’s decision, will now lodge a claim for unpaid tax with the Oldco, which will be substantially increased because of today’s court ruling.

HMRC is adamant there is money in there to be had and the court now says the state is owed what will be a substantial sum – barring any appeal process, of course.

The reason why HMRC is so doggedly pursuing all this is that it believes employment benefit trust schemes do not work and should attract income tax and NI payments just as you or I would in being paid money by our employers. And here is the key – the money is big money: £1.3bn so far recovered in tax owed off at least 1,500 EBT schemes across football clubs but many other outfits as well.

As HMRC put it to me this morning:  “HMRC’s view is that EBT avoidance cases do not work and we would encourage users to get out of them now and put the past behind them.”

You have been warned… and Hector’s hand is undoubtedly strengthened by its pursuit of the Rangers case because of its profile.

They tell me their legal funding comes out of a central pot so it is impossible to put a figure on what several years of legal battle over this have cost the taxpayer – but it will be the wrong side of several million at the most conservative of estimates. Then again, you have to set that against the £1.3bn in recovered tax which winning these cases makes all the easier.

And what of football? We now have a situation where three Law Lords have ruled that the club were tax cheats during one of their most successful periods on the pitch. We know the reason why they did it was that it meant Rangers could afford players it otherwise could not afford. This is not contested.

How does this sit with Lord Nimmo Smith’s judgement that cheating on tax in this way conferred ‘ no sporting advantage’ to the club on the pitch?

Some will now argue that cheating on your tax to be able to afford better players in your team is about nothing but conferring sporting advantage and many others would see matters in that light.

Whether the Scottish football authorities – the SPFL in particular – choose to revisit this question, in the light of today’s court decision, is not yet clear. I await their call back to me. Many fans are already revisiting it of course.

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20 reader comments

  1. colin park says:

    Can sense the rage. Quite amusing!

  2. Jim Norton says:

    “Furthermore, so far as the footballers are concerned, at least, it seems to us that if bonuses had not been paid they might well have taken their services elsewhere.”

    (Players bonuses paid through EBTs)

    Sounds like sporting advantage to me.

    1. will says:

      It seems like that to you lot but not other people! Who says Rangers wouldn’t have signed them anyway? Murray didn’t buy the players to get them on the cheap, he used a way many football clubs did including Celtic with Juninho(but quickly paid it away when they realised what was coming) to simply save some money…has anyone came out and said Rangers wouldn’t have bought them anyway? If you buy something and are told there is a way to save a bit of money then you will do it. That’s not the same as finding ways to buy something you can’t afford. Celtic and the rest of Scottish football weren’t good enough on the park..simple as that!

  3. andy says:

    where exactly in the law books does “common sense” appear common sense is not a law is it. the very fact the judges citied common sense as a reason for the ruling is grounds for appeal does common sense prove it wasnt a loan?………..NO

    1. Bernie O'Neill says:

      Tell me then, Andy, should laws not be common sense? and secondly do you really believe the sums paid were loans? I can see why it would suit you to believe that but after all we’ve learned about how these Trusts were operated we would have to be gullible to swallow that assertion.

  4. George Murphy says:

    I sense the tumbleweed blowing through your blog Alex . I’m the first one to make a comment on your page.

    Hardly a mass following wanting to engage with you on the topics of the day

    Channel 4 executives need to have a good look at what you provide in the line of journalistic content…

    A journalist with nothing interesting to report or say

    1. Jerry says:

      If you think this story is insignificant, you’re in la la land. This story is huge, systematically cheating the system, the world is now watching the SFA with interest.

  5. James A Barr says:

    Football supporters in Scotland are hoping you will continue your pursuit of this. There are no `journalists ` here who will.

  6. Charles says:

    Usual bias from thommo.

  7. true-blue says:

    I would just like to say one thing about the big tax case
    rangers do not need to do anything regarding this decision it has nothing what so ever to do with rangers
    the big tax case has to do with the previous owners
    the company that now owns rangers football club has nothing to do with the big tax case so your headline should read-MURRAY GROUP HOLDING LTD,MURRAY GROUP MANAGEMENT,THE PREMIER GROUP PROPERTY LTD,GM MINING LTD and RFC 2012 PLC (in liquidation) what happens now after court decision!

  8. Big Mike says:

    No question it was cheating on a massive scale, the tainted titles must now be removed and sending out a message to one and all.

  9. Bill says:

    Rangers were NOT cheating the tax man. Rangers Football Club PLC, the company that used to own Rangers Football Club before its sale to a newco in June 2012, took part in a tax avoidance scheme that they were advised was a legitimate way of avoiding tax.
    Hundreds of other companies have done the same.
    After years of using this scheme, the companies involved received tax notices from HMRC and claims that the scheme was not a valid tax avoidance mechanism. The truth is that the validity of the scheme is ambiguous at best. Misleading at worst.
    Two official rulings, declaring the scheme valid and one later decision declaring it is not, testify to that fact.
    Adopting a tax scheme you have been advised is legitimate is not cheating in any way. Including, “trying to gain a sporting advantage”. If they knew it was illegal or had tried to lie or cover the scheme up, that would have been tax evasion. Then that might have been construed as “cheating”.

    Tax evasion is a crime. Tax avoidance is not. If your attempt to avoid tax is ruled invalid, the penalty is you pay the tax or become insolvent if you can’t.

    1. Bruce67 says:

      The problem is, the club incorporated in 1899, which means the operating club theory is a nonsense. In law the club was the company.

  10. David says:

    As a channel four journalist who has to be open minded on his reporting i find it very hard not to think that you are biased in your article against rangers. Cheating is a very strong word a word you choose to use even though it is not mentioned in the verdict. You are saying that the murry group intentionally set out to NOT pay taxes to win what you think they only won because of the ebts they were offering players. Strong allegation which would be very hard to proove.. You will be asking for titles to be stripped next but thats fine because as much as some would like it to happen it never will.

  11. Pat says:

    What happens now to half of the EPL clubs?

    1. will says:

      Come on now, the most expensive and watched league in the world. You don’t think the Hmrc would dare start their testing into this stuff down there do you? – They are simply going for the biggest club North of the border who like most significant clubs down used a scheme that was legal. That’s the reason after the already lost twice they changed their argument and case and came in again…wonder if the will chase Arsenal for the 90million of the 100million they owe to Hmrc or will the 10 million they paid(ironically the same as Rangers offered but Hmrc rejected) be enough…who knows.

  12. Art says:

    Well done Alex. Nice piece, untainted by Level 5 guidance. Well done to you and Channel 4 for publishing a view that most of Scottish Football fans and supporters would agree with.

  13. Celtic Twilight says:

    Surely “just like you and I” should be “just like you and me”.

  14. will says:

    Comment was deleted. Go figure! Alex you and the kid on Irishman who duped you into reporting lies last time always seem to appear out the woodwork the minute you see a story about Rangers simply because you know you will get support from the fans of Scotlands second most successful football club. They like yourself and the kid on Irishman are simply obsessed…

  15. Michael says:

    It’s a complete embarrassment, that this kind of honest journalism is not possible in Scotland at the moment, and we must rely on an English journalist to say it “as it is”.

Comments are closed.