Daft and Dafter

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Blu says: July 23, 2013 at 3:08 pm Bill1903 says: July 23, 2013 …

Comment on Daft and Dafter by ecobhoy.

blu says:
July 23, 2013 at 3:08 pm
Bill1903 says:
July 23, 2013 at 2:03 pm
10 0 i
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Angus note the TU in response to Bill and keep up the remorseless objectivity and attention to facts that we see also from others such as Ecobhoy and Auldheid in their recent discussion about the FTT/UTT – even if they didn’t agree 100%.
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I find it’s useful on here to be able to engage with other posters who know the details of various issues which helps deepen your own knowledge. Auldheid knows his stuff and he make me think deeply about what I think is accurate or not.

So Auldheid’s latest post has had me go back again to look at his info on the Rangers Discounted Options Trust which preceded the EBT Trust and which forms the basis of the ‘Wee Tax case’ liability.

What I missed earlier was that D&P was asked to provide info to LNS on any documentation or info for payments made by Rangers to players through any trust going back to 1 July 1998. I now believe that there was a fudge so that the truth never actually emerged at LNS and a result acceptable to the footballing authorities was achieved and I place no blame on the tribunal members.

It seems to me that Rangers could have been operating this DOS scheme from 1998 to 2003 and the payments made under a similar scheme have already been held to be ‘irregular’ by a FTTT and UTT. why this wasn’t spotted by those preparing the SPL case is a mystery. I have no doubt that if evidence had been led on the matter then the result would have been very different at LNS.

And then there is the strange silence at the Rangers FTTT where there was no mention of the parallel Aberdeen Asset management case which impacted directly on Rangers who were operating a scheme similar to AAM.

I try to keep away from conspiracy theories but this one really takes the biscuit.

ecobhoy Also Commented

Daft and Dafter
Auldheid says:
July 23, 2013 at 3:19 am
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I think there are a few things we have to consider and learn about the Rangers Discounted Option Scheme to make any informed opinion on whether payments under it were ‘irregular’ or not.

We don’t know if it was designed by the accountants who created the DOS model which was sold to AAM. Always remember the huge tax reduction industry is out there always seeking loopholes and ways of reducing tax. So when someone comes up with a scheme that works then plenty of imitators jump on the bandwagon and market their own-brand alternatives which usually have differences from the original to save any pesky copyright infringements.

I have also now had the chance to skim through the FTTT and UTT Decisions on the AAM DOS and as I suspected there is no mention or connection with Rangers. It also appears to me that certain bits of the complex AAM DOS blueprint provided by the scheme’s accountant ‘architects’ weren’t followed which obviously left trapdoors for HMRC to attack the scheme. But it has to be remembered that HMRC were unable to act against companies using DOS until tax legislation was changed in 2003 after the schemes had been running for 3/4 years.

So, all in all, I really don’t think we have enough info to extrapolate any finding from the AAM DOS to the Rangers DOS. Wrt to the AAM DOS there doesn’t appear to be any side letter mechanism as the scheme was structured and operated differently from EBTs.

This virtually guarantees the Rangers DOS involving De Boer, Moor and Flo didn’t have side letters so Rangers would be telling the truth if they denied their existence IMO and by extension they couldn’t have been hidden from the SFA if they didn’t exist. However LNS factored in the Rangers DOS payments and found Rangers guilty of failing to disclose them and also the EBT payments. What LNS didn’t know was that The Rangers DOS was a totally different scheme from the Rangers EBT scheme.

I had another look at the Rangers FTTT Decision and also read the transcript provided by CF of Murray’s evidence to the FTTT. There is no mention of the Rangers DOS in his evidence which means it doesn’t get a mention in the Rangers FTTT Decision although there is the passing reference to the AAM UTT Decision on the definition of ‘payment’ which was basically dismissed as irrelevant by the Rangers EBT FTTT.

We may have a conspiracy theory over the lack of mention of the Rangers DOS or it might mean nothing – perhaps if CF is reading she might be able to find something which throws light on the matter.

I also don’t accept your statement that the Rangers DOS: ‘was not one other clubs could avail themselves of’. All of these schemes come with a fairly short shelf life in the sense that if HMRC thinks it will lose significant revenue from a newly launched one then it will test it and/or change the tax legislation to close the loopholes. So we always have to remember that there is usually nothing illegal about these schemes and don’t forget the involvement of Celtic and Juninho in one.

Most prudent businessmen would be very wary of getting involved quite simply because there is every possibility that they could end-up with Hector breathing down their neck. But legally any football club was perfectly entitled to avail themself of such schemes if they wished to take a gamble.

The reason that the FTTTs could reach different conclusions is because the two schemes were very different and no doubt the evidence may also have been different – I have checked and Dr Poone wasn’t on the AAM FTTT btw :mrgreen:

As I previously posted, once the HMRC have won a ‘test-case’ it uses it to pressurise other users of schemes to pay-up the tax due and if they don’t and decide to fight the assessment then penalties and interest are added – that has always been the carrot and stick approach used by Hector.

I agree that should HMRC ultimately win on the Rangers EBT case that technically would allow the deployment of an Article 5.1 complaint but I truly doubt if there is any appetite for it within the footballing authorities and there will be even less say five years down the line if it goes the full distance.

As to the Rangers DOS then I doubt whether it can be proven that any payments were actually ‘irregular’ or not as we don’t have the necessary evidence to make an informed judgement one way or the other IMO. As a pure guess I would say the Rangers DOS payments ceased in 2003 when the law was changed on such schemes so Hector wasn’t bothered about Rangers because they had accepted liability and agreed to pay when Hector eventually came calling years later 😆


Daft and Dafter
upthehoops says:
July 23, 2013 at 8:04 am
StevieBC says:
July 22, 2013 at 11:17 pm

Thinking back it is utterly shameful how Murray was allowed to ruin Scottish football and how the media went along with it.
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And let’s never forget the complicity and active support of the Scottish Football cabal who wanted Rangers and Celtic kept in their ‘rightful’ places!


Daft and Dafter
Auldheid says:
July 22, 2013 at 3:55 pm
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The Murray Group EBT Trust was formed on 20 April 2001 but there was a previous trust prior to that which is mentioned by LNS.

I believe it is the one you mentioned whereby Moore, De Boer and Flo received payments under a Discounted Options Scheme (DOS) which existed at Rangers prior to the EBT scheme being formed on 21/04/2001.

You then state that wrt De Boer his payment under the DOS was ‘irregular’. The problem I have with that is LNS has listed Moore, De Boer and Flo as being ‘EBT’ recipients in Period 1 – 23 November 2000 to 21 May 2002. De Boer and Flo are similarly also listed for Period 2 – 22 May 2002 to 22 May 2005.

I have seen media references to De Boer and Flo getting tax-free payments which led to the ‘Wee Tax Case’ for unpaid tax which wasn’t paid by Rangers. But the important thing is that the debt and liability was accepted at least by CW and possibly previously. So I have difficulty in accepting the ‘irregular’ payment because it only became technically irregular after the legislation changed to close the tax loophole in 2003. Indeed to be really technical it only became ‘irregular’ after the UTT AAM decision in January 2012 which was a test case – and AAM may have appealed it to the Supreme Court 😯

When you say a FTTT has ruled the De Boer DOS payment as ‘irregular’ I wonder if you are referring to the Aberdeen Asset Management (AAM) FTTT ruling. I haven’t read the Decision but I find it hard to believe De Boer or any other Rangers player would be mentioned in it. If they aren’t then you would be relying on precedent from the ruling but before the ruling was made CW had already accepted liability for the unpaid tax – he didn’t pay it but that’s a separate issue.

In the AAM case they appealed against the HMRC claim they were using a tax avoidance scheme to pay bonuses to directors and staff. The FTTT ruled in favour of HMRC and a subsequent appeal by AAM to the UTT was rejected. The AAM DOS was created by accountants HLB Kidsons but of course the Rangers EBT scheme was created by Baxendale and was different from the DOS scheme that AAM had signed up to.

It appears Discounted Option Schemes kicked-off in 2000 but by 2003 a change in tax legislation saw their demise. Similarly the Rangers EBT scheme was kicked into touch by new legislation in 2011 although it appears that no new contributions were paid-in after 2008.

You say that LNS cannot ignore the AAM FTTT case and that the LNS process has essentially covered-up the ‘irregular’ payment to De Boer. Firstly, the FTTT Rangers Decision doesn’t identify any Rangers staff being paid under a DOS although I might have missed it or it might have been discussed and not noted.

I posted yesterday: LNS at [35] states: ‘By deed dated 20 April 2001 MGM set up the Murray Group Management Remuneration Trust (the MGMRT). (We note that the MGMRT was preceded by the Rangers Employee Benefit Trust, but we are not aware that they were different trusts. We shall treat them as a continuous trust’.

LNS didn’t cover-up any payments for Rangers employees paid under the previous trust as they are listed in the tribunal decision and it really is a bit of a stretch IMO to class the DOS payments as irregular.

A few days after Counsel for the both sides in the Rangers EBT case made their closing submissions in January 2012 the opinion of Warren J in Aberdeen Asset Management plc v HMRC in the Upper Tribunal was issued.

Both counsel in the Rangers FTTT submitted written submissions on the decision – however the Rangers FTTT rejected the UTT finding on AAM as not relevant for the purposes of the Rangers FTTT. Anoraks will find details at 197, 198, and 224 of: http://www.financeandtaxtribunals.gov.uk/judgmentfiles/j6851/TC02372.pdf

The FTTT Decision issued in Nov 2012 briefly mentions the AAM case but there is no mention of Rangers and as it was rejected as irrelevant I doubt if the tribunal members would give it much, if any, attention.

From my layman’s reading of things there is little, if any, crossover from the AAM FTTT to the Rangers FTTT and indeed the one bit that might be significant was rejected by the Rangers FTTT so I think we have an apple and orange comparison which tbh sounds promising initially but isn’t really relevant so doesn’t work well as a precedent.

I do wonder of course why the SPL preparation for LNS failed to identify the difference between the Rangers DOS and EBT Trusts or did they and decide against mentioning it. There is then the question as to whether the SPL legal team realised the possible connection between AAM and Rangers being involved in Discounted Option Schemes. Conspiracy? Probably just more shoddy preparation.

However Auldheid you may well disagree with my line of argument and you may well be right but if there was any opportunity to use ‘irregular’ DOS payments to Rangers players I think that has gone and it may well be by design but I doubt if we will ever know. Although on the bright side it can be used for the Article 5.1 argument 😆


Recent Comments by ecobhoy

Did Stewart Regan Ken Then Wit We Ken Noo?
jimmci says:
April 24, 2015 at 1:50 pm

And why did we not get the panel’s reasoning together with the decision last night?
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Simples ❗ The Decision was the easy bit 😆 The explanation to sell it was the hard bit and despite a nightshift they appear to have fluffed their lines AGAIN 🙄


Did Stewart Regan Ken Then Wit We Ken Noo?
Allyjambo says:
April 24, 2015 at 2:18 pm

Might I suggest that SD’s main interest in this meeting was to put the RIFC board straight on some matters regarding the security over the IP and just how watertight it is, rather than to discuss funding or any ‘amicable’ discussion how best to move the club forward!
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You might be right but would SD want the club suffering another Insolvency Event? Perhaps they were asking for the second loan tranche of £5 million which the new board apparently rejected on taking control.

I have undernoted a reply I made to parttimearab last night which may have been missed but may also be relevant.

3. Insolvency events

(i) The inability of the Company to pay its debts as they fall due within the meaning of section 123 of the Insolvency Act 1986 (the “Act”);
(ii) The issue of an application for an administration order or a notice of intention to appoint an administrator in relation to the Company;
(iii) The passing of a resolution or order for the Company’s winding-up, dissolution, administration or reorganisation;
(iv) The declaration of a moratorium in relation to any of the Company’s indebtedness;
(v) The making of any arrangement or any proposal for any arrangement with any of the Company’s creditors; and
(vi) The appointment of a liquidator, receiver, administrator, supervisor or other similar officer in respect of any of the Company’s assets.

Now I haven’t a clue whether that has anything to do with the SPFL Rule Change. But it’s clear that there could be various stages in an Insolvency Event and perhaps the rule change is to cover all eventualities which might not have been previously defined in the Rule Book.

In particular I look at:

(vi) The appointment of a liquidator, receiver, administrator, supervisor or other similar officer in respect of any of the Company’s assets.

And I think of the various charges which have been placed on Rangers assets wrt the £5 million loan. I have previously posted that the contracts wrt a Default Event could see the assets pass to SportsDirect without any court hearing and SD also already has the power to appoint a Receiver to deal with any of the assets that pass to it via a loan default event.

Now that might not ultimately lead to a full-blown Insolvency depending on what SD actually decide to do with Rangers. But looking at the above I wonder whether with the SPFL rule change that just taking control of the assets is enough to be classed as an Insolvency Event under SPFL Rules?

Perhaps the SPFL are thinking ahead ?

But does the rule take effect immediately or from the new season?

It seems that if it is immediate and Rangers suffers an Insolvency Event then that would be an automatic 25 points this season and 15 next season. Assuming it is able to survive death a second time.


Did Stewart Regan Ken Then Wit We Ken Noo?
Resin_lab_dog says:
April 24, 2015 at 12:10 pm
ecobhoy says:
April 24, 2015 at 12:00 pm
blu says:
April 24, 2015 at 11:40 am
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From what I saw, all criticisms emanating from ICTFC was directed towards the SFA machinery and not towards CFC. Similarly, I have seen no evidence of any criticism of ICTFC being put forward by CFC. I see that fact as quite telling.

Celtic were quite entitled to make all the statements they made and had the boot been on the other foot, in the circumstances I am sure KC at ICTFC would have done likewise.

Similarly, had the situtaions been reversed w.r.t. the foul, I would have expected CFC to back their player robsutly in the same way that ICTFC did.

This is about governance of the sport, not internecine disagreements between member clubs – for which I am yet to see any cause advanced from either party.
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Couldn’t agree more!


Did Stewart Regan Ken Then Wit We Ken Noo?
blu says:
April 24, 2015 at 11:40 am

My view is that Celtic played this one wrong (only in the public nature of it)and it was easy for media outlets to infer cause and effect in the Celtic/Compliance Officer actions.
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There is some merit in your view IMO. However there’s a balancing act to be achieved which requires an answer to what the officials saw, didn’t see, or decided or didn’t decide on Sunday.

All I heard in the ground, leaving the ground, on the train, in the pub, was real anger and disbelief at the decision which worsened with the TV replays.

I do think Celtic fans were due an explanation and tbf to Celtic I doubt if they could have forseen what an absolute hash the SFA would make of it. Obviously the SMSM has ridden to the rescue of the SFA so what’s new about that?

But we’re still awaiting the answers requested. Will we get them? Not without keeping the pressure on the SFA on all fronts where Hampden’s dark secrets exist.


Did Stewart Regan Ken Then Wit We Ken Noo?
Gabby says:
April 24, 2015 at 10:18 am

If Celtic really, really felt they needed to send a letter, then this is the type of thing they should have sent…
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I disagree as the letter you suggest goes way beyond the immediate point which is simply: ‘Please explain how the decision was arrived at’. I say decision because when Celic sent the letter it seemed there had been no decision reached but that the incident had been ‘missed’ by all officials.

Once the SFA provide that info then Celtic can make a decision as to if and how it should proceed with the matter.

My credo in a situation like this is not to give any leeway to a slippery character or room for manoeuvre. Ask the straight simple question and take it from there once the basic position is established.

Never jump fences too soon and never ever jump fences you don’t need to especially if you don’t know what lies in wait on the other side.


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