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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