EBT Come Home
It’s not been a great day for the club currently residing at Ibrox. The Scottish Championship leaders announced a loss of £7.5 m and their Chairman could be spending his Christmas behind bars, if his retail salesman has anything to do with it. But far far worse than that, the big bogeyman of The Big Tax Case has come round to bite them on the bum. There’s several immediate consequences of this. The first is the reality that the old RFC were very successful with players they could otherwise not afford. As Alex Thomson, perhaps the journalist who has done more than any to examine this situation states:
“The judgement by three Scottish Law Lords is as comprehensive as it is damning. Whilst Rangers FC were busy winning titles and silverware the entire basis upon which they paid many players and executives should have attracted income tax and did not do so. Hundreds of thousands of pounds was paid in “loans” through a trust scheme which at the time was seen as a way of avoiding paying income tax. You may wonder why Rangers – and other clubs – could exist in some kind of non-PAYE parallel universe. Now the Law Lords have wondered too and simply stated that “common sense” would suggest Rangers should have paid tax like the rest of the UK does. Further – the non payment of tax allowed the club to buy and pay players it could not otherwise have afforded. A previous legal judgement ruled that the club gained no advantage. Today’s successful appeal by the HMRC would seem to bring that ruling into question. There is no getting away from it – the upheld appeal means Rangers were systematically cheating the taxman whilst winning titles on the pitch.”
The story, which already had an Edgar Allan Poe element about it took a further surreal twist. As the fallout from the HMRC verdict continued, Rangers fans were busy insisting they’re a new club while Celtic fans insist it’s the same club. ‘Rangers’ identity-contortionism looks like continuing.
Lets not forget Dave King was on the board at the time of EBTs.
Second. Lord Nimmo’s decision on whether RFC gained advantage surely now needs revisited? The noble Lord’s decision was predicated on EBT’s being legal, so that any / every other club could have done the same. They weren’t, so other clubs couldn’t.
Nimmo’s report stated that it was not a breach of SPL rules to minimise tax liability and it accepted that Tax tribunal ruling that EBTs are lawful.
Now they’re not.
At the time the report stated: “What we are concerned with is the fact that the side-letters issued to the Specified Players, in the course of the operation of the EBT scheme, were not disclosed to the SPL and the SFA as required by their respective Rules” (p31)
“Oldco’s failure to disclose the side-letters to the SPL and the SFA was at least partly motivated by a wish not to risk prejudicing the tax advantages of the EBT scheme, we are unable to reach the conclusion that this led to any competitive advantage.” (p31
No sporting advantage means the Commission did not consider any sport-related punishment.
“We therefore proceed on the basis that the breach of the rules relating to disclosure did not give rise to any sporting advantage, direct or indirect. We do not therefore propose to consider those sanctions which are of a sporting nature.” (p31)
That’s all changed.
Other teams and supporters might like to reflect on what the cup and league results had been if the following beneficiers had been absent?
Alan Hutton, Alex Rae, Alex McLeish, Andrei Kanchelskis, Arthur Numan, Barry Ferguson, Bert Konterman, Kris Boyd, Lorenzo Amoruso, Michael Mols, Tore Andre Flo (maybe not), Ronald De Boer and a dozen others.
The harsh reality is this: ‘Rangers cheated and the truth is unpalatable, the damage irreversible’.
Third, what is the position of the SPFl / SFA on this? Pliant scribes and media cheerleaders were prematurely celebrating Rangers return and business as usual prior to their defeat to Hibernian at the weekend. They’ll presumably be a little quieter now. But never mind retrospective stripping of titles – the real issue now facing the Scottish football authorities is, are they – can they – will they – in the light of their endless prevarication and hopeless mismanagement – take the proper steps to oversee the financial stability of this football club in the light of emerging facts and evident insecurity?
We doubt it.
But if the club goes to the wall again, with the subsequent upheaval and mayhem cast against other clubs who act within the law, it’s not the Rangers cabal that will be at fault, it is the fawning and useless administrators in our game that should be held to account.
The BBC’s Mark Daly today writes (‘How Rangers’ dubious tax wheeze unravelled’) : “But ultimately, who has paid for this disaster? The fans, of course.” Well yes, but the fans of other clubs denied the income of league positions or cup victories who are the real victims here.
And finally, it’s make your mind up time for Rangers fans. If it’s the same club it’s the same debt. If it’s not, it’s a new club. Don’t really mind what story you want to go with, but you can’t have both.