10 Jul 2014

Rangers, tax and ‘no surrender’?

After the first tier tax tribunal result, I wrote that Sir David Murray was right in saying there are no winners. I say he is right again when he repeats that:

“While we have been successful in both the FTT and UTT, there are, as we have stated previously, no victors.”

Well – he is right about no victors. But he is spinning over “successful”, of course.

It is somehow often forgotten in Scotland that Rangers in fact put their hands up in several cases at the first tier tribunal.

No doubt it will also be forgotten now that the grounds set out for appeal in this latest step in proceedings are substantial and may very well be pursued by HMRC. We have to await that.

Perhaps significantly, in an ultra-terse statement, HMRC simply says:

“We are naturally disappointed with today’s decision and are considering an appeal.”

Er – no surrender, you might say.

A man walks past a Rangers' soccer club poster at their Ibrox Stadium in Glasgow, Scotland

So all the usual crowing about victory is just as daft as last time. On this point Sir David Murray is right about no winners.

It is a long and expensive process. Quite possibly further battles await through the high court in Scotland – and beyond that, who knows?

So why the money? Why the spending? HMRC confirms that it is all well within normal budgeting set aside for their battalions of lawyers needed to do battle for and on behalf of, most of us: the taxpayers. So why spend the money? Simply – because they think they are right. As they said today:

“HMRC is committed to tackling avoidance and it is right that we challenge the type of avoidance seen in this case. We have an incredibly strong record for litigating tax avoidance cases, with around 80 per cent of cases litigated being won by HMRC.

“Between April 2010 and March 2014 we won 94 avoidance cases in tribunals and courts. In 2013-14 alone our 30 wins out of 39 cases protected £2.7bn of tax.”

Sir David Murray is right, too, that it has cast a huge shadow over the club, which became all but unsellable as he punted it – disastrously –  to Craig Whyte. It then became downright toxic under Whyte’s ownership.

The proper response is good – so it should cast a shadow over the club. The public should have the right to ask questions about how a major FC was able to buy very expensive footballers made more affordable via a scheme in which people did not pay tax in the usual way.

The public should be concerned that in several cases Rangers admitted breaking the rules and that HMRC were right. You can’t really complain about a shadow over the club and the effect on the club’s value when the club itself has broken the rules, can you?

Everyone should have an interest in that and wish to see it thoroughly tested, and that is precisely what is going on here – and should HMRC pursue leave to appeal, go on it will, shadow or no shadow over Ibrox.

HMRC have told me they are considering whether to appeal to the inner house of the court of session. They have a move to seek permission to appeal.

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