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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33 reader comments

  1. Jim Smith says:

    Both the UTT and FTT have ruled now that EBT’s were legal that should be the end of the matter.

    Mr Thomson if you want HMRC to waste thousands maybe millions more bringing this case to court for a 3rd time then why don’t you put your hand in your pocket and pay the legal costs? HMRC have better and more important things to do than massage your ego.

    Yes a tiny minority of the EBT’s may have been wrong but that’s not what this case was about. it was the principal of EBT’s as a whole not individual cases Rangers won this on principal not once but TWICE.

    Bottom line is you claimed Rangers owed £140m in tax 2 tribunals have said this is not the case, when are you going to say sorry for that inaccurate statement?

    1. Bruce67 says:

      Of course Rangers supporters think this should be the end of the matter, ignoring the fact that there remain avenues of appeal open to HMRC. If the result had gone the other way, they would not think that should be the end of the matter.

      So many Rangers fans are now calling their club innocent and claiming that it was victimised. The fact remains that Rangers were tax cheats – the WTC and the failure to pay NI/PAYE shows this. Perhaps they can tell us why, if their club was innocent, it was willing to try to settle?

      1. Jay Dee says:

        Look at all the hassle and expense it would have saved. It’s fans of other clubs who are in denial about the present verdict.

    2. Terrence Foley says:

      Had HMRC won on every point then they could hardly appeal against their own victory.

      However, at the first instance they applied the ruling, the recipient of the tax demand could appeal.
      So HMRC are as well to win the case decisively at the highest level, while their lawyers are still au fait with the details, rather then wait 2 years and start anew.

      It’s about winning the war, not the battle.

  2. Allan Miller says:

    My question is why rangers and not Liverpool city our a host of other British clubs. Debt was a common practice for many years so why us? What has happened to my club has been absolutely horrendous. The way journalist newspapers TV and social media have revelled in the public humiliation of an institution loved by a great menu people at home and abroad will stay with me until the day I die.

    1. Terrence Foley says:

      If Liverpool have failed to pay any debts or tax demands then you have a point.

      Rangers were liquidated without the tax demand.

    2. jock says:

      There is a good reason many of us revelled in the demises of Rangers FC Allan. Let’s start with over a hundred years of sectarian bigotry and discrimination and move on to shaming Scotland in many corners of the globe. You are the people all right Allen, just not very nice ones…..

    3. Alen Moller says:

      The lack of contrition that the club has shown is why people have “revelled” in the public humiliation of the dead club.

      It’s always someone else’s fault.

      Boo hoo.

      1. Jay Dee says:

        Supposed dead club but the obsessive nonsense lives on.

    4. gerry says:

      you got off lightly my friend-you had the whole of the scottish media intimidated or complicit in this-yet you feel somebody was out to get you-a psychiatrist is your only hope

    5. Carntyne says:

      Rangers: A club whose fans wrecked Pamplona, Seville, Barcelona, (twice)
      and the daddy of them all, the Manchester riots.

      Lest we forget…

  3. Sons of Truth says:

    Again…refreshing to read your reporting Alex.
    We, the tax paying “people” need more transparency, and getting to the point journalism, like this.

  4. Bruce67 says:

    Except that, with the WTC and NI/PAYE, Rangers owed HMRC a lot more than £5M. Closer to £30M, IIRC. A major amount for a Scottish football club and it casts a major shadow.

  5. Ed Paisley says:

    It was Sir David Murray who gambled everything to try to match Celtic’s victory in the Big Cup and “keep them in their place” . It was Murray who used other peoples money to fund the “monbeams” – through his amenable contact at Lloyd’s/BOS and his dodgy tax evasion schemes. It was Murray who killed Rangers and extinguished the history (however tainted by cheating and sectarianism). It wasn’t HMRC or stupid little asset stripper Whyte. It was Sir David Murray, knight of this noble realm (ahem!).

  6. charlie says:

    rangers are dead and you cant raise the dead but i wish sevco the new entity pretending to be rangers all the best

  7. AJ says:

    The key here is absolutely loss of value (a massive hint where this is going) and Sir David Murray’s opportunity to recover that loss of value. I suspect that he will now actively pursue recovery of any value he has lost (and so may many others). I just hope that a number ofstakeholder’s professional indemnity insurance is paid up. This isn’t the end but instead a new and very exciting chapter. It would see that a new segment of society may face some difficulty, something that might even become ruiness for some.

  8. RLCE says:

    following the utt ruling the glaring fact still remains that rangers players employees and sundry others had so-called loans to the tune of around £50m and thus avoided paying the correct tax. since it is obvious they were never intended to be loans and none have been repaid so far, this situation cannot be allowed to remain unchallenged if only in fairness to the rest of the taxpayers. their lordships should have been asked to rule on what should happen when something called a loan for tax avoidance purposes turns out to be something else which is subject to tax. hmrc must now chase the individuals for payment. can’t be too difficult to send a demand letter to the list which is in the public domain.

    1. Jay Dee says:

      Even HMRC’s own QC told the first tribunal that the loans are not shams and are recoverable.

  9. Big Mike says:

    Hear we go blame everyone for your own clubs fraudulent behaviour. Murray did say in his statement that it was the club liquidated and on more than one occasion. Wonder how that is going down? Did this club (oldco) not get fined for their tax avoidance?

    1. Jay Dee says:

      And you believe David Murray?

      It’s in his interests to talk up the damage done.

  10. choochooblue says:

    Alex , can you answer one question with honesty?…..Have you ever attempted to reduce your tax liabilities by legal means ?

  11. Jay Dee says:

    Countless people and companies look to legally reduce their tax bills, just to try to put things in perspective. Tax planning devices are of course intended to stay within the law. The Murray companies may have made mistakes in a relatively small number of cases but that doesn’t affect the overall verdict. Mr Thomson and certain others are clutching at straws.

  12. Jimmy Smith says:

    Ok…

    1) Allan Miller – two words.. spell check. If you can’t have the common sense to read your own post before you mash the big ‘Send’ button on your Fisher Price toy, don’t voter those of us who can read

    2) Herewecome – The media? The media? Would that be the same, look the other way, succulent lamb eating, nothing to see here media who for the past number of years have printed every word presented from the marble staircase without question all the while refusing to investigate or print what has been happening under their very noses?

    3) Jim Smith (you’re my favourite, although I can assure we’re not related) – where do I begin? I would suggest you go read some of the articles written by Mr Thomson and several other authors prepared to put their head above the parapet. Your beloved ‘club’ (or should that be company?) are complicit in avoidance of not only tax but also of simply paying bills. There can be no apology as no lies have been told. The harsh truth of the matter is that neither you nor I really know the facts and I very much doubt we will as this has a large carpet beside ready to have it swept under at the earliest opportunity. Sadly for those concerned, there is also an even larger hoover, waiting to draw it back out. This will not go away and the club/company/celestial body will be found guilty for their acts.

    Keep up the good work Mr Thomson, you’re scaring the ‘peepul’… and before anyone accuses me, no I am not a ‘Tic supporter or any other less salubrious name you care to use. I am a law-abiding, hard working tax payer who is sick and tired of ‘jobs for the boys’ and funny handshakes!

  13. Dj Footprint says:

    “Minor Indiscretions”!! – Is that some kind of a joke? If Rangers hadn’t succumbed to the dodgy ‘ducking and diving’ – Your beloved Club wouldn’t have found itself in the mess it ended up in, and out of the Scottish Premiership.
    “Boo-Hoo, everyone’s against us”. – Do me a favour, and get a grip.

  14. Alex Lindsay says:

    So jim your admitting breaking the rules spartans got put out of the cup for an administration error.
    The old rangers should have have trophies stripped.
    Anyway it doesn’t matter they died we won.
    Sevco are now an irrelevance

    1. Jay Dee says:

      Funny how you lot keep on and on obsessing over a supposed irrelevance.

  15. Sam says:

    I feel that true Rangers supporters should be directing their anger at David Murray after all he led the club into liquidation along with his board members. It goes without saying that in business if you spend beyond your means you will eventually go under. David Murray should be held to account and the wrath of the Rangers supporters should be directed at his business model that failed and destroyed the club. Good hard loyal working men and woman lost their jobs because of David Murrays and his board of directors incompetence. The reality is David Murray still lives a comfortable life without worrying about how to pay his rent or mortgage, I wonder if the same applies to the loyal workers who were sacked due to this fiasco. The British public expect HMRC to pursue any organisation that are deemed or suspected of tax avoidance and long may that continue wether it’s a football club or a coffee franchise. No pun intended but it’s time to wake up and smell the coffee and bring those who took Rangers down this road to task and that has to be David Murray. If not then it would seem that we have a case of “the guilty have no pride”.

  16. Duncan Swinton says:

    Mr Thompson,
    Throughout this your opinion was biased and wrong, as a journalist you showed you are incapable of reporting facts and as in general your own view’s were placed as a judgement. Indeed why have tribunals just ask Alex who sits on top of his world to cast his opinion on all below, we are not in Egypt and a free press should always be encouraged and supported but yourself and others have a lot in common where you trash truth to promote your own self interest.
    As you are aware you were wrong and now is the time to brush yourself off and be a man about it.

  17. seeeeebo says:

    And so your hatred of our club goes on. Twisted words to protect your previous innacuracies. Credit where credit is due though, all the other hacks that were queueing up to have a go are in hiding, at least you and your good friend and fellow hater Ill Phil are reaining true to form and continue to play to the bitter brighade!

  18. tjb says:

    Alex
    |f these decisions are right then why did every company not use EBT’s? Also why did companies who did repay the taxman such as AAM who recently repaid £7m? In some tribunals involving difficult issues it is down to an individual’s view,in these cases the Law Lords who chaired the two tribunals.The Lord who chaired the first tribunal was born,educated,attended the University of Glasgow and practiced Law in Glasgow. The Lord who chaired the second tribunal was(thanks to the Sun) was a season ticket holder at Celtic.Is this normal practice? If this was about say Manchester Utd would HMRC agreed to a Lord from Manchester hearing these cases? HMRC must have been 100% sure of its case to agree to such appointments and also why did the Lords agree to chair these tribunals as whilst no one would question their knowledge or integrity but surely given the bigotry which exists in the West of Scotland surely a Chairperson from elsewhere would have been more appropriate.As HMRC have been so successful in similar cases have been naive in this one? Since this whole saga began Rangers have been involved in about 8 or 9 cases involving Law Lords and won them all including the first one allowing them to use their own administrators!!! and one successful verdict ovef the SFA which Rangers themselves refused to accept!!!

  19. Philip Edwards says:

    Alex,

    Will no one rid us of this meddlesome fleece?
    :-)

    British football needs the German model of 51% fans ownership. Badly.

  20. stevie54 says:

    So you think the Rangers support are “daft” to be pleased that our club have managed to win 2 tribunal decisions ? The public should be concerned about such bias journalism . You obviously are not a fan of Rangers or its supporters . Where does this hatred come from I can only wonder . Some prozac and a mallet might ease your pain !

    1. JP56 says:

      stevie54 – why put your age on your name?
      Please think and reflect before you commit your thoughts for others to review you are just embarrassing yourself and those you purport to represent.
      Being Scottish and not supporting Rangers or Celtic I can assure you I know far more about bias than you can even imagine. I suppose you are comparing Alex Thomson’s level of journalism to the mainstream Scottish sport media whose main wish is to sell newspapers to Celtic & Rangers fans!
      Your main accusation is that Alex is ‘not a fan of Rangers or a Rangers supporter’ – Stevie he is a journalist and therefore requires to have journalistic experience and background to do his job! I am a Dundee fan and as far as i am aware it has had no impact on any post I have applied for.
      ‘The public should be concerned about such bias(ed) journalism’ – Stevie only if the public are a section of one- eyed Rangers supporters, who you appear to represent, who consider all investigative journalism that doesn’t agree with your own ideas as biased – I think you will find that everyone else would use the term informative rather than bias(ed).
      To accuse someone of hatred and follow this immediately with a rambling statement about Prozac & a mallet – I think that this exhibits the level of your hatred. I know where your hatred comes from – it comes from the fact that you support a football club that got into an unholy financial mess and is still paying the consequences for it (even though they couldn’t pay the creditors!)

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