Scottish Football and the case for a Bismarck!


Brogan Rogan Trevino and Hogan says: Tuesday, May 7, 2013 at …

Comment on Scottish Football and the case for a Bismarck! by Night Terror.

Brogan Rogan Trevino and Hogan says:
Tuesday, May 7, 2013 at 09:26

The FTT ruled — by way of majority— on the basis that the trusts set up and the loans granted by those trusts were to be treated as real, legal and viable entities and were not shams– in other words they were not fake legal entities and transactions designed to hide and mask the true nature of the fiscal transactions. At the FTT hearing HMRC specifically asked that the trusts and loans were NOT treated as shams.

As such, the majority decided that if these were bona fides loans — then loans did not attract tax and PAYE.

So far– so good.

However, what does not seem to have been sufficiently stressed in the HMRC argument and/or picked up at FTT level, is the argument that whatever these trusts and loans were ( legal and real or not ) they were only funded by Rangers PLC as a result of players and others entering into a contract of employment.

No trusts were ever set up substantially after any contract of employment ( bar perhaps one or two which remain a mystery ) and it is quite clear that the loans and payments are inextricably linked to players signing contracts and supposedly non existent side letters.

What is to be stressed by HMRC is that whether the loans were real or not, the moment that Rangers PLC paid any money to any Jersey based entity in connection with such contracts of employment, those payments attracted tax and NIC .

A very interesting analysis, BRTH.

The FTT panel did express surprise that HMRC did not seek to argue that the trusts were a sham in some way, particularly considering how inexpertly the EBTs were subsequently administered. At the risk of overinterpreting their words, I assumed that they were indicating that HMRC would have been pushing at an open door if they had argued this.

Those who have pursued a successful legal career to the heights of titles and royal approval have not generally done so by displaying imagination, creativity or surprising interpretation of legal precedent, and it may be that the “sham” element of EBTs was seen as a necessary hurdle for HMRC to vault in order to maintain their claim to the amounts due from MIH & RFC.

If HMRC are thinking of using the MIH EBT tax case as a test for an assortment of other similar cases, it may be that if it was necessary to prove each of those cases involved proving they were in some way a sham to survive a challenge at FTT(T), the success or future pursuit of tax due would be expensive, lengthy and patchy. The legal difficulty of proving mens rea may be required in order for the “sham” label to stick, for example, although perhaps a more expert legal mind could advise on this.

If, on the other hand, at appeal to the UTT, it was established that it was not necessary for the EBT to be a sham in any way, just that it was linked to the employment of the beneficiary, then this would increase HMRC’s success in collecting on schemes such as this in future, as at a stroke this would remove the need to prove the intention of any scheme, merely the effect of the scheme.

I believe this is what you are getting at, BRTH, and perhaps Dr Poon in her dissenting opinion.

Does any of this hold water, legally, would you say?

Night Terror Also Commented

Scottish Football and the case for a Bismarck!
arabest1 says:
Thursday, May 9, 2013 at 14:53

JM has not lost a home league match since 2002

He lost at home to Barca last season.
And the season before that to Real Zaragoza & Sporting Gijon

Apart from that you’re spot on!

Even so, his unbeaten home league record was quite unbelievable.

Scottish Football and the case for a Bismarck!
Senior says:
Wednesday, May 8, 2013 at 12:06

Gavin Rae speaking to The Herald

” Rangers is a club with class, ”

Says more about Gavin Rae than anything else!

It says more about Alex Rae if you ask me. Or about the woeful content on the blog today.

Scottish Football and the case for a Bismarck!
Good article on the Rangers Standard, that.

Recent Comments by Night Terror

LNS – A Summary
Interesting prediction of events.
How much of that is what you hope happens, irrespective of what you think will happen?
It sounds like the ideal scenario of most interested non-Rangers fans to me. I’m therefore sceptical without a lot more justification for such a sequence of events.

LNS – A Summary
I think it’s very easy to understand why the SFA would continue to stonewall on that one.
It’s harder to understand how they are allowed to or able to do so.

Whose assets are they anyway?
@Gym Trainer
I agree. The problem is, most fans find the overspending thing easier to grasp and be outraged about, whereas the intricacies of player registration can seem ore of an administrative and therefore boring infraction.
It suits many to characterise the Title Stripping argument as based on overspending and tax liability (subject to appeal) and even alleged sporting advantage, none of which have concrete rules to outlaw them as far as I know, rather than the specifics of registrations and hidden contracts which are provable and forbidden.
The problem is we are dealing with football, where people focus on the results on the pitch, whereas actually that is irrelevant to the question of whether Rangers broke rules on player registration and contracts.
Sporting advantage, cheating, tax evasion/avoidance, illegal tax arrangements, overspending, players they couldn’t afford, other fans’ sense of outrage. All irrelevant. If you want to pursue a legal/quasi legal case to remove titles from Rangers, it’s the contracts and player registrations. Everything else is a counter productive waste of time.
If the Nimmo Smith verdict is seen to have settled this issue, it’s game over on that front. So, if you want titles removed, LNS’s verdict need to be set aside or superceded somehow.

Whose assets are they anyway?
In addition to my last post, I now see Paul Brennan, Celtic Blogger, agrees.

Whose assets are they anyway?
An unpopular thought.

Dave King is right! Well, about one aspect as inferred by today’s article in the Record, anyway. In particular that there is a threat of title stripping due to the large debt Rangers Of Old accumulated…

Record Sport understands that would put Hearts in the firing line, as Gers would attempt to have their Scottish Cup Final wins over Gretna in 2006 and Hibs in 2012 wiped off the history books, using the argument that they too claimed success based on a regime of reckless spending that forced the club into administration.

I think that is fair enough. No titles should be stripped because the team doing it were “overspending”. Anyone pursuing such an approach is being unreasonable. To go down that route would open a Pandora’s box of reassignment of cups and titles. It’s fair enough to spend more than you’re taking in (within FFP) so long as, if that particular strategy blows up in your face, you suffer the consequences without favour from the authorities, football and creditors.
It might stick in the craw of rival fans to lose matches and trophies to someone spending more than they can afford, but that’s life. So long as it’s above board, no undeclared payments, no third parties involved, no secret contracts, then overspending is hunky dory, no problems, go right ahead.
So, well said Dave King, case closed, and let us hear no more about stripping titles because any team spent more than they could afford.

It’s frustrating to see the threat of questioning whether Rangers won things legitimately being undermined by justifying this because they have ended up with a large tax liability (subject to possible appeal). This allows King, and many in the media, to portray any attempts to remove titles from Rangers as being unreasonable. If the main justification is because they overspent and may now have a large tax debt, I agree that such arguments are unreasonable.
Any move to strip titles should be based on other associated infractions. See Auldheid for that.
Crying about the tax debt proving they cheated just undermines much stronger arguments and I long to see such anguished claims desist.

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