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Supreme Court Ruling Sees Rangers Lose Landmark Tax Case

The HMRC has won a final ruling on a seven-year tax case that has cursed the oldco establishment of Glasgow Rangers, in which the club has issued no appeal. 

During a period ranging from 2001 to 2010, a sum amounting to £47 million was paid to former players, managers, and directors at the oldco Rangers FC in what were tax-free loans, according to the BBC. The case was based upon the use of Employee Benefit Trust’s (ETB), which

The case was based upon the use of Employee Benefit Trusts (ETB), which have been outlawed in due course.

HMRC had argued that those earning should have been taxable resulting in the labelling of a tax avoidance scheme and the implementation of an investigation of suspected infringements.

What seemed like a never-ending case has previously seen the Scottish giants placed in the third division of Scottish football under a different company after administration in 2012. They returned to the Scottish top flight for the 2016/17 season after a four-year absence.

Sir David Murray was at the helm of the club during the period of investigation as he was the majority shareholder from 2001 to 2009. The emerging ruling, however, will only relate to Murray Group companies, including that of Rangers Football Club 2012 plc, and not that of the current establishment. The former chairman has said he is “hugely disappointed” with the outcome.

As a result of this hearing BDO – an international accounting company who are the liquidators of oldco Rangers – were hopeful of an overruling of the Court of Session by the Supreme Court with an appeal.

However, the verdict found in favour of HMRC. The conclusion was met by five supreme court judges whom unanimously ousted the liquidators appeal on behalf of RFC 2012 – the company which had previously been Rangers Football Club before its financial collapse in 2012. The resulting factors will see the creditors of RFC 2012 receive a lot less money from the sum collected by BDO and HMRC will be owed more money.

The ruling could have further implications for professional sports organisations throughout the UK who have implemented similar EBT schemes. Therefore, suggesting a possible Supreme Court appeal by BDO liquidators based upon what has been infamously known as “The Big Tax Case”.

The HMRC have released a statement as follows:

 “This decision has wide-ranging implications for other avoidance cases and we encourage anyone who has tried to avoid tax on their earnings to now agree with us the tax owed. HMRC will always challenge contrived arrangements that try to deliver tax advantages never intended by parliament.”

https://soundcloud.com/punditarenairishfootball/keith-ward-talks-about-his-season-and-cormac-byrne-discusses-brays-financial-woes

Author: The PA Team

This article was written by a member of The PA Team. If you would like to join the team, drop us an email at write@punditarena.com.