Small Price to Pay?

ByBig Pink

Small Price to Pay?

I think there has been an appreciable shift of opinion amongst fans of TRFC recently.

 

Unlike the ‘invest: speculate to accumulate’ rhetoric featured in the press and by ex-players, the ordinary fans are coming to the realisation that there is no quick fix. There are even murmurings that there may never be a fix which involves their club becoming a competitive force.

 

Poor management of fan expectations has long been an accusation levelled at the TRFC board by SFM. It is possible though that many fans are beginning to manage their own expectations rather better. There are certainly justifiable criticisms of the manager, Mark Warburton, but alongside that is a realism about the limitations and constraints that he is working under.

 

There is a rather misguided, and possibly not accurate assumption that another liquidation for a team out of Ibrox would result in having to start ‘yet again’ in the bottom division; but in fact there is a growing acceptance that consolidation in the top league is a much better solution than gambling on huge borrowing simply to stop Celtic adding more notches to the goalpost.

 

Could it be that the fans are about to do the job that the board haven’t had the balls to do –accept the gap between themselves and (at least) Celtic, and settle for mediocrity on the field as a short term price to pay for continuity?

 

During the 1990s, in the middle of the Murray/BoS fuelled spending spree, and with Celtic in the doldrums, it seemed to many Celtic fans that their club would never be able to bridge that gap. Of course they did, but at the emotional cost of losing the exclusive 9IAR record.

 

TRFC now find themselves in pretty much the same position, but their road to bridging the current gap is a more difficult one.

 

There are similarities of course. Like the Celtic of the 90s, Rangers have major infrastructure challenges to meet. Celtic had a stadium to build, Rangers have Ibrox (and Auchenhowie) to fix and improve. Both required massive investment to improve the team, although I would argue that Rangers have a steeper hill to climb in that area.

 

Unlike RFC of the 90s, Celtic’s accrued wealth has nothing to do with an intravenous hook-up between their bank account and the chairman’s pals at the bank. Their baseline advantage over the current Rangers predicament is a combination of a stadium which holds 10,000 more fans than Ibrox, no debt, a burgeoning cash balance and the current inflow of European cash.

The Euro cash and the cash balance could be depleted, but the 10,000 extra seats won’t.

 

It also seems difficult to imagine how TRFC can obtain seed capital – even if they were inclined to gamble – given the combination of barriers to achieving that;

 

  • They have a PLC with no stock market listing
  • They have NO executive directors on the PLC board
  • The current chairman is a convicted criminal, convicted of offences involving money
  • The current chairman and vice-chairman are both directors of a previously liquidated club, and therefore associated with the financial mismanagement which brought that about.
  • In that climate, sponsorship deals are hard to come by. Major sponsors want to be associated with stability, success and integrity. TRFC don’t tick many boxes in that regard.
  • Banks do not lend to football clubs. Pre Murray/Masterton, football clubs were cash businesses with modest overdraft facilities to cover modest cash-flow peaks and troughs. The banks have returned to that model. 1987-2007 was the exception, not the norm.
  • They are at war with a powerful and substantial shareholder in Mike Ashley.
  • There is still litigation pending on more than one front which could even call into question the ownership of the club’s assets.
  • They are in debt already (estimated at around £15m).
  • The current onfield situation may require yet another write-off in terms of contracts.

Any one of those bullet points could be enough to derail any plan to get to the top. In combination, there may even be an existential question to answer.

That is why the fans are starting to look a lot smarter than the board, and ultimately the good sense of the fans may well help the board to find a way out of their current dilemma.

But even with realistic expectations from the supporters, is it possible that they can find a way? Is there for instance someone with a magic wand or bag of cash who could come in and turn it around? Perhaps, but who would risk money on a precarious venture like a football club when one of the most powerful businessmen in the country is in dispute with you?

 

In order for serious inward investment to happen;

  • Ashley has to be reconciled with the board (needs King and Murray to go).
  • The debt has to be written off .
  • The new investor(s) has to be given control of the club (and this would perhaps require another 75% special resolution where current shareholders would be asked to vote to dilute their own influence).
  • If they achieved that (and it is a pretty big if) the new investor cash would go into the club’s bank account – not used to pay off the debt –  and they would be free to pursue new and better sponsorship deals, improve the merchandising contract with an onside Ashley, and add new revenue streams.

Even then, any new board would need to see the infrastructure challenges as paramount. Having one eye squinting in the direction of Parkhead will blur the bigger picture.

Their priority should be to reduce the losses (whilst increasing wages for better players), fix the stadium and the training ground (both in need of repair and improvement), build a scouting and youth infrastructure, and free up a (relatively modest) wad of cash to improve the playing squad.

In defence of the current board, the challenges facing them are almost vertical in incline. No matter how skilful they are, nothing other than someone with a barrowload of cash and a very long term outlook can put any kind of fix in place.

£50m might buy the debt and equity, and repair the stadium, but progress requires on-field improvement. It also needs stability, and therefore Ashley’s cooperation. The price of that is the head of Dave King.

Rangers will bring in more at the gate than Aberdeen, Hearts or Hibs, but they have a considerably higher cost base than those clubs. With better players, recurring costs will be even higher – much higher.

To square this circle, however unpalatable it appears to be, peace has to be made with Ashley. That is the key to being able to embark upon a journey that has any chance of success. Otherwise, the clocks will have to be reset to 2022, and the end of the SD contract, before progress can be made.

However there is no chance it can go on that long. Rangers fans may be increasingly less demanding in what they expect, but they will need to see some signs – and not just words – that a plan is in place.

The board are getting ready to throw Mark Warburton to the hounds (the MSM lapdogs have already been armed with poison pens to effect that). This will buy them some time, but not enough.

 

We’ve said it before, and at the risk of sounding like a broken record, I’ll say it again;

 

For Rangers to have a fighting chance of competing at the top of football, King needs to be gone. If he does go, half of the barriers preventing the club raising cash are dismantled. 

So is King’s departure a price worth paying? If he really had Rangers in his heart, he would say ‘Yes’.

 

 

 

About the author

Big Pink administrator

Big Pink is John Cole; a former schoolteacher based in the West of Scotland, He is also a print and broadcast journalist who is engaged in the running of SFM . Former gigs include Newstalk 106, the Celtic View, and Channel67. A Celtic fan, he is also the voice of our podcast initiative.

1,627 Comments so far

John ClarkPosted on11:40 pm - Mar 15, 2017


Cluster OneMarch 15, 2017 at 22:08
‘…..If only someone at the BBC or someone from the SMSM would ask that question..’
__________________
A more important question, Cluster One, is WHY are the SMSM and indeed the whole Scottish football and legal establishments so unwilling to face the simple-and it is simple-truth that their ‘Rangers’ ceased to exist as a football club?
What driving , pernicious, force has caused them to join together in collective insanity to deny such an obvious ,self-evident truth?
When men learned-in-the-law and men in the Press and national broadcasting ,skilled  in the use of words, utter patent ,self-contradictory nonsense in order  to avoid telling the actual truth about something that is in the last analysis a trivial matter of Sport, I think we are in serious trouble as a nation.
Last week, the ‘Times’ featured a piece about the evil bast.rd SS Brigadefuhrer Dr Franz Six,  whom Hitler had appointed to be gauleiter of the UK when the Nazi invasion had been  successfully accomplished.
This bad bas.ard ( who died when I was in my 30s!) had a list of nearly three thousand folk who were to be summarily arrested and dealt with as dangerous opponents.The list  included journalists and prominent folk in many walks of life, including legal folk.
[Rebecca West sent Noel Coward a  telegram saying “My dear—the people we should have been seen dead with.”]
It is shameful to think that our SFA ‘governance’ people, and so many of our present day ‘journalists’ and lawyers and such like who have been prepared to lie , prevaricate, and dissemble to avoid admitting the truth about ‘Rangers’ would NEVER have been at risk of ending up on such a list!
If they can sell their souls for the sake of a cheating sports club, they are clearly the type of people who would run no risk of offending any Hitler, but instead happily spread  his evil propaganda to save their own rotten hides.
I metaphorically spit upon them.

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bigboab1916Posted on11:42 pm - Mar 15, 2017


Not a peep from the usual suspects tonight on the radio show.
They had placed their bets on the opposite and were hoping for a miracle. They have been backing losers for years and it is beginning to hurt.
classics remember them.
Rangers chief executive Charles Green has accused the Scottish Premier League of stealing the club’s money.
He told Sky Sports News: “We were thrown out of the SPL, they stole our money that we were due from the previous season.They are now pursuing title stripping.
There was money due to Rangers football club from Sky and part of the Sky cheque was for finishing second in the league. That money has never been paid over and has been kept by the SPL.
And this was part of the five-way agreement and we were saddled with loads of debts, liabilities that were old-co but then when it was new-co’s turn and they changed the rules again.
“For me it is very difficult to forgive and forget,” added Green. “And I’m going to deal with these issues as I can over the next few years. I said recently, I’m not going to leave until we see Champions League music played at Ibrox and I’m sticking by Ally McCoist until we get to that position.”

Message to Charlie you never bought a team that finished second that team died you bought a basket of assetts, you were not owed anything you never did anything to be owed, you have no titles to strip, you never were showing the door you were never in the inside, and you were not saddled with debts the debts were liquidated and people were robbed you are a thief like the rest of the chancers.you signed a pact with the devils at the sfa its called a 5 way agreement and was called a contract today, you will only hear champions league music if you switch on your telly or visit celtic park. Hail Hail more chancers to exposed soon in public.
Get on yer bike you tramp

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SmugasPosted on7:21 am - Mar 16, 2017


Pat Byrne at 06.47

Pat.  Meant to come back on your “Celtic and Rangers Athletic FC” post yesterday but events overtook us.  

There is a fundamental difference between two clubs merging (I forget the exact financial agreement but ICT would be the obvious example) and one club being so financially distressed that (whether a basket, a Club, removed or whatever terminology you wish to use) it has to be bought out of a deep pit entirely of its own making a pit created specifically with a view to distorting the competition previously.  If for no other reason than you are encouraging others, including the new merged entity to start digging once again!

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Cluster OnePosted on8:56 am - Mar 16, 2017


HOMUNCULUSMARCH 15, 2017 at 22:52       13 Votes 
CLUSTER ONEMARCH 15, 2017 at 22:08======================================
Whilst tongue in cheek, I was actually being a bit serious.
—————
Maybe someone can show me where the SPL had a rule where a club could be “removed” from the league.—————————-If only someone at the BBC or someone from the SMSM would ask that question
———————
Whilst tongue in cheek, I was actually being a bit serious also.;-)

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Cluster OnePosted on9:04 am - Mar 16, 2017


JOHN CLARKMARCH 15, 2017 at 23:40       29 Votes 
Cluster OneMarch 15, 2017 at 22:08‘…..If only someone at the BBC or someone from the SMSM would ask that question..’__________________A more important question, Cluster One, is WHY are the SMSM and indeed the whole Scottish football and legal establishments so unwilling to face the simple-and it is simple-truth that their ‘Rangers’ ceased to exist as a football club?
———————————
Part of the reason maybe? Be warned the word “relegation”is used at the start by channel 4.

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FinlochPosted on10:31 am - Mar 16, 2017


Quite a momentous few days with the Takeover appeal setting up an active sequence of events and the Supreme Court in process with relevance nationally and indeed outside football.

Why so little/no MSM coverage and analysis?

Also well done John James for the Supreme Court summary and analysis on his site.

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naegreetinPosted on10:54 am - Mar 16, 2017


Finloch @ 10.31 – agree coverage of both events SC & TP by msm is v.scant – also agree JJ does provide a useful commentary on events at the SC – he/she obviously has a “feel” for matters legal .

the 2 ongoing inquiries into matters concerning Rangers old & new reflect how  poorly & illegally perhaps both have been run & still no comment from the footballing governing bodies SFA/SPFL – why the hell doesn’t someone raise it with them & ask for a comment particularly concerning the Takeover Panel situation where the Directors of a member club have been found to be , in effect , untrustworthy .

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normanbatesmumfcPosted on11:41 am - Mar 16, 2017


For me the simplest way to de-bunk the same club myth;

Substitute the name of the “businessman” Charles Green with say…..Declan Slattery.

Sevco Scotland name change, substitute The Rangers Football Club Limited with……Glasgow Shamrocks Football Club Ltd.

All of the other events, agreements, processes and legal positions etc. remaining the same.

Then ask yourself, would it still be the same club?????

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SmugasPosted on12:58 pm - Mar 16, 2017


What it would do Norman is expose the SFA to identify what exactly it was they were dealing with.

GSFC Ltd would have to request a league placement and parallel SFA membership (assuming it acquired its assets in the same ‘distressed’ manner Green did).  The league position (as opposed to no position) is fairly easy to deal with.  Are GSFC Ltd resplendent with shiny stadium, kits and busses and stuff fit to see out a season of fixtures?  If so, and assuming other clubs agree (in the absence of any other club tender AND a position being vacant) then they would get in as a new club just as Sevco Scotland did.

It is the SFA membership that would prove tricky.  If I understand the position correctly (and I can feel Hirsuite Pursuit dusting off his keyboard as we speak 08) GSFC Ltd would also require to ‘get’ (is fulfil a better term?) SFA membership.  It would do this either by displaying 5 years accounts etc OR it would request Associate Membership.  Full membership could not be granted solely on the premise of the playing history of GSFC Ltd since I assume Mr Slattery is new to this club malarkey. 

Where the SFA would be exposed however is in identifying what it was that they were being asked to bestow on GSFC Ltd.  What happened was that there was a club with full membership that went bust freeing up both a league position and a full membership assuming that the SFA would wish to keep both numbers as they were.  This membership was transferred to Sevco Scotland and it was considered to be a ‘full’ membership due to some kind of association with the previous club “Rangers.”  This association was the principle subject of the 5WA.  Thus the concept of Rangers FC takes root and lazy MSM description of “Rangers membership” being transferred (as opposed to the membership previously held by Rangers being passed to Sevco Scotland which would have been equally accurate). 

But presumably Mr Slattery can give full assurances to everything that Mr Green gave assurances to with the one exception – that the name change would not be from Sevco Scotland to TRFC but instead from Mr Slattery Inc to GSFC Ltd.  Would that change be sufficient to stop the ‘full’ nature of the membership being transferred? 

It is not whether GSFC Ltd would have been offered the same flexibility as TRFC but rather whether the failure of adorning the RFC comfort blanket was sufficient to block the award of full membership to GSFC assuming all other details of the transfer were comparable, or indeed potentially, even better vis a vis future funding, rules adherence, their intention to stay out of various courts etc etc. 

I would guess their answer would be that only by declaring that the name change would involve the word Rangers could they guarantee that fan numbers would continue and Armageddon avoided.  Avoidance of Armageddon would secure the clubs entry vote, something Mr Slattery couldn’t bring to the table.  Sevco had to be big (blue pound and all that).  Being honest, never mind servile and contrite were clearly considered to be optional extras.   

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StevieBCPosted on2:31 pm - Mar 16, 2017


DR latest;
[with my highlighting added]

“Watch Day two of Rangers ‘Big Tax Case’ LIVE from Supreme Court”

Rangers went into liquidation in 2012 after facing an unpaid tax bill of £46.2 million.
A consortium then bought up its assets and re-launched the side in Scotland’s lowest professional football league. The current owners are not liable for the tax bill of the “oldco” club.
========================================================

OK, not quite the whole truth in the article, but I think this is the first time I have read the DR be explicit about the ‘L’ word. [?]

And ‘relegation’ or ‘demoted’ not applied either ?

However, Keef wasn’t brave enough to publish this effort.

The piece is credited to “BY DAILYRECORD.CO.UK”   222222

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woodsteinPosted on2:56 pm - Mar 16, 2017


StevieBC
March 16, 2017 at 14:31
 
 
This is the closest they got.
 

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tonyPosted on3:12 pm - Mar 16, 2017


the return of 
Rangers Tax-Case @rangerstaxcase20sAnd so we wait. This matter would have been cleared up over a decade ago if Rangers had not decided to lie at every turn.

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tonyPosted on3:15 pm - Mar 16, 2017


Rangers Tax-Case @rangerstaxcase16sLying about side letters meant that workings of scheme would not be known to other SPL clubs. Lying resulted in sporting advantage.

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tonyPosted on3:21 pm - Mar 16, 2017


Rangers Tax-Case @rangerstaxcasenowRFC scheme ruled legal in 2004: lies to HMRC & SPL gave sporting advantage If illegal in 2004, Rangers could have been saved.

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tonyPosted on3:31 pm - Mar 16, 2017


Rangers Tax-Case@rangerstaxcaseConclusions: – Rangers gained a multi-year advantage from breaking rules / lying – lying allowed bills to grow to unpayable level

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goosygoosyPosted on3:34 pm - Mar 16, 2017


SC Summary by Andrew Thornhill QC for Rangers
Issues before SC (i.e. Yes or No for SC to decide and give reasons)
1.   Whether the Court of Session erred in law in reversing the specialist Tribunals below and concluding that payments of “emoluments” or “earnings”, for the purposes of the Income and Corporation Taxes Act 1988 and the Income Tax (Earnings and Pensions) Act 2003, had been made by the appellant to its employees.
2.   Whether, in order for a payment to constitute earnings for PAYE and NIC purposes, it is sufficient that the payment was “derived from” work done by a particular employee and/or it “it formed part of the employee’s employment package
3.     Whether the powers which each employee held as protector of a sub trust had the effect that the funds in that sub trust were unreservedly at the disposal of the employee and were earnings for PAYE and NIC purposes.
 
Counsel for BDO got the last word this afternoon
In his last few sentences Mr Thornhill asked the court to reverse the Scottish Inner Court decision in respect of issues 1 and 2 but acceded to finding 3
The Chair responded to this key concession by asking him if this meant he was accepting that PAYE was due on the Sub Trustees individual funds
He said yes
Meaning Rangers accept that EBT holders must pay tax and NI on the funds deposited into their trust fund by Rangers
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
IMO
It’s quite a cynical concession by BDO since it gives HMRC a clear run at going after individuals by accepting that the scheme was flawed
By doing they seem to be trying to persuade the SC that there is a “compromise” conclusion they can reach where Rangers win on Issues 1 and 2 and abandon Issue 3
i.e.
A Rangers win would mean
 HMRC have a legitimate, unchallenged one off claim against Rangers EBT holders for employee NI and tax
And
Rangers are only due employers NI insurance
HMRC would not have a general precedent could apply to other trust funds
………………………………………………………..
The bus has just run over 108 EBT holders
Their only recourse is to sue RFC for failing to honour their side letters which guaranteed RFC would reimburse them if tax and NI became payable

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StevieBCPosted on3:40 pm - Mar 16, 2017


Can’t help myself!
Whilst there was a sniff of the DR reporting a little bit more accurately…the ESJ [(c) The Clumpany, 2015], just plunged with both feet the other way.

From the Derek Johnstone column today; [or rather from his ghost-writer, which could possibly be Chris Jack ?]
[My bold italics added]

“I enjoyed listening to [Pedro] and what he had to say during his press conference…
His lines about winning European trophies and reasons why he has joined the biggest club in Scotland – when he stated that Rangers are 144-years-old and have won 54 league titles – will have gone down well with the supporters. He had to endear himself to the fans right away and I like the messages that he has been putting across.”

[So, lying in public, repeating parrot-fashion the myths promoted by the SMSM about TRFC is to be applauded ?
Didn’t reflect well on Pedro either: weak.]

“There is a bit of negativity in some quarters about this move, but that is mainly down to the fact that Pedro isn’t a household name here and he doesn’t really have a huge pedigree. There is no doubt that the supporters will give him a chance, though.”

[The implication being that Pedro is “a household name” somewhere else ?
“doesn’t really have a huge pedigree”: certainly sounds better than “doesn’t really have any pedigree at all”.
“will give him a chance”: the treatment of Paul Le Guen springs to mind.]
============================================================

What BS has been sold to this guy ?

He’s certainly up against it now: but then again, fair play to Warbs for getting the Forest job, [even if the owner is more deranged than  King!].

Might actually be worth a punt for Pedro also, if he can hack it long enough – but the proverbial TRFC rusty can has just been kicked a little bit further down the road, until the ST moneys are collected.

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StevieBCPosted on3:55 pm - Mar 16, 2017


GOOSYGOOSY
MARCH 16, 2017 at 15:34

The bus has just run over 108 EBT holdersTheir only recourse is to sue RFC for failing to honour their side letters which guaranteed RFC would reimburse them if tax and NI became payable
============================

Oooft !
And they have reversed the bus over them as well.

Can anyone confirm: is my assumption correct, that the EPT recipients are personally liable to pay any dues, interest and penalties to HMRC in the first instance.

Only then will the EBT recipients be free to try and sue RFC[IL] / Minty / Ogilvie / the SFA [?] / anyone remotely connected with the scheme – who has money and/or indemnity insurance ?

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LUGOSIPosted on3:56 pm - Mar 16, 2017


Well, that’s another fixture out of the way.
My MOTM so far is Paddy Hodge but I’ve a sneaky feeling that despite her ‘I’m new to all this Tax malarkey’ protestations Lady Hale’s Opinion may stick a stiletto between the ribs of those who dissed Dr Heidi Poon’s views. We’ll see.
I see FINLOCH and NAEGREETIN are bigging up the coverage by John James and while any coverage is welcome I think it’s going a tad far to say that he has “a feel for matters legal”. Perhaps we’re spoiled by our own Court Correspondents (you know who you are-we don’t but you do) and by Mr Doleman’s excellent coverage but having watched/listened to the proceedings Mr James’ reporting and analysis barely skimmed the surface. By way of example Mr James has identified a Tommy McLean EBT “bombshell”. It would have not come as such a revelation if he was aware that John Clark reported on this on 7th July 2015.
My favourite bit was when I thought Mr Thornhill QC was playing P.G. Wodehouse Bingo but I think the two PGW references might only have been coincidence. Pity as the rest of Mr Thornhill’s submissions made ditchwater look fascinating.

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LUGOSIPosted on4:13 pm - Mar 16, 2017


Just noticed GOOSYGOOSY’s post at 15:34.
I don’t think that concession was made.

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easyJamboPosted on4:33 pm - Mar 16, 2017


I could only listen to the first hour of this morning’s hearing.  I would be astonished if Thornhill made a concession in the terms that Goosy described, as I would have thought that the operation of the sub trusts was the easiest part of their case to defend, as HMRC had previously conceded that the trusts and loans were not a sham. (from the FTTT).

Once the videos of today’s sessions are available from the SC website I will watch this afternoon’s session to see what Thornhill specifically said in his summing up

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SmugasPosted on4:35 pm - Mar 16, 2017


Can’t really see how he could concede 3 without conceding 1 either.

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goosygoosyPosted on5:48 pm - Mar 16, 2017


LUGOSIMARCH 16, 2017 at 16:13 
Just noticed GOOSYGOOSY’s post at 15:34.I don’t think that concession was made
,,,,,,,,,,,,,,,,,,,,,,,,

Lets watch the video and see what was said
I heard Thornhill say yesterday that sub trust payments may or may not be subject to paye(i.e. Issue3)

And today in the last few minutes after conceding paye was due he was definitely challenged by the Chairman Judge to confirm that Issue 3 was no longer being contested
He replied Yes

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bigboab1916Posted on7:03 pm - Mar 16, 2017


StevieBCMarch 16, 2017 at 15:55Oooft ! And they have reversed the bus over them as well.
Can anyone confirm: is my assumption correct, that the EPT recipients are personally liable to pay any dues, interest and penalties to HMRC in the first instance.
Only then will the EBT recipients be free to try and sue RFC[IL] / Minty / Ogilvie / the SFA [?] / anyone remotely connected with the scheme – who has money and/or indemnity insurance ?

This is a great point as to snub the claims will highlight to every agent in the land and other media outlets not tuned in that this is a club that has no morals. Agents will and should scrutinise every board member in there as what they will find is there is no change from old to new.
lets be honest everybody who walks through that door is prepared to toe the line with a ruthless PR department whos aim is to keep a crowd fleeced and will do anything to keep it that way.
Barton,Warburton, board members, thrown to the highway and now a new coach stepping into a guys shoes who was sacked with no warning, a scab prepared to talk garbage and a compliant media to flaunt it as gospel for season ticket sales.
They are the masters of the road when it comes to crashing buses and throwing people under them.

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upthehoopsPosted on7:38 pm - Mar 16, 2017


I haven’t been able to watch watch the Supreme Court proceedings (this work thing is getting on my nerves!). However I note with interest the perception by some on here that the QC for BDO may have left it open for Oldco not be liable for the tax, but for HMRC to go after the EBT recipients.  Would that be a get out for the SPFL in terms of any renewed calls for title stripping, i.e it was the individuals who failed to make good their own tax arrangements therefore the club was in the clear?

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neepheidPosted on8:03 pm - Mar 16, 2017


I haven’t listened to the whole proceedings. However this is my understanding. If point 3 is conceded, that only applies PAYE/NIC if it can be shown that the money going into the trusts constitute “emoluments”. Points 1 and 2 are to determine the nature of the payments. PAYE cannot apply if the sums going into the trusts are found not to be emoluments (point 1).

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easyJamboPosted on8:15 pm - Mar 16, 2017


I’ve watched the video of this afternoon’s session.  The point conceded by Thornhill at the end was only in relation to Benefits in Kind.

My interpretation was that he conceded that the loans provided by the sub trusts could be construed as Benefits in Kind and if that was the case he would accept that a PAYE charge would apply.

That charge would NOT be a PAYE charge on the amount of the loan, but ONLY on the interest charged on the loan, if it was lower than the official rate set by HMRC.  Given that the the loans granted by the sub trusts were reported to be at commercial rates, any liability would be minimal.
e.g.  If interest was charged on a “loan” of £100,000 at 4%, then that would amount to £4,000.  If the official rate was 5%, then the interest would be £5,000.  The taxable element is the difference between the official rate and the rate charged, which in my illustration would be £5,000 – £4,000 = £1,000, so the tax to be paid on the benefit would be 40% of the £1,000 = £400.

I have received such benefits in kind in the past, e.g. a cheap mortgage, and the calculation was as above. 

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gunnerbPosted on8:17 pm - Mar 16, 2017


UPTHEHOOPSMARCH 16, 2017 at 19:38
_____________________________

I am sure John Clark will be along soon enough to remind us the transgression was failure to report all remuneration to the SFA that was the rule breaking so assiduously ignored by the LNS comission and not any tax issues.. I think HMRC are after a ‘slam dunk’ here and would be unhappy if any wriggle room left them unable to pursue other such schemes in an unfettered manner. 

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easyJamboPosted on8:24 pm - Mar 16, 2017


Further to my post above, I would be very surprised if the SC went down the Benefit in Kind route.  My reasoning would be that the loan was not from the employer (RFC), but from the trustees of the Sub Trust. 

The Murray Group (Thornhill) had argued, strenuously, at both the FTTT and UTTT that the trustees were both at arms length and independent of the Murray Group companies. He argued that Murray Group could not influence the loan decisions of the trustees because, once the funds reached the Main Trust, it was no longer Murray Group’s money to disperse.  

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gunnerbPosted on8:25 pm - Mar 16, 2017


UTH;
________

Apologies meant to add that I don’t believe the SPFL/SFA will do anything regardless of the outcome. They will simply point to LNS as having drawn a line under everything and refuse to revisit .

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HomunculusPosted on8:36 pm - Mar 16, 2017


I have not watched any of the Supreme Court hearing in relation to the BDO appeal. I am therefore saying this based on what I believe to be the case without the benefit of watching those proceedings.

In my opinion the Supreme Court will reject the appeal by BDO and the tax assessments will stand. My opinion is based on going back to what was discussed here and on a previous blog several years ago. It goes back to a certain extent to what Dr Heidi Poon said when she was the dissenting voice at the First Tier Tribunal, the tax was and always has been due. 

Tax was due when the payments were made from Rangers to the main trust. That is because they were contractual payments for work done, albeit that may be contractual bonuses. The whole trust to sub-trust, then “loan” to player is a nonsense. It was contractual payments to an employee and attracted income tax. 

In my opinion that is not only legally right it is also morally right. I can see no justification for extremely well paid people being allowed to avoid paying income tax when the normal working man has to pay his.

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neepheidPosted on8:43 pm - Mar 16, 2017


easyJamboMarch 16, 2017 at 20:15       2 Votes 
I’ve watched the video of this afternoon’s session.  The point conceded by Thornhill at the end was only in relation to Benefits in Kind.
+++++++++++++++++++
The only matters under appeal are PAYE determinations. Benefits in Kind would be directly assessed on the employees. So I don’t understand why Thornhill would even mention benefits, unless he was conceding that in the event that HMRC failed on the PAYE front, then he accepts that benefits of the whole amount of the loans would be assessable on the employees? But why even mention that, it’s irrelevant to the PAYE liabilities under appeal.
I really need to listen carefully to the replay (oh, for a transcript!) , but a bad bout of manflu, combined with the effects of my special 16yo “medicine” means it ain’t happening tonight!

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StevieBCPosted on8:52 pm - Mar 16, 2017


GUNNERB
MARCH 16, 2017 at 20:25
 
UTH;
________
Apologies meant to add that I don’t believe the SPFL/SFA will do anything regardless of the outcome. They will simply point to LNS as having drawn a line under everything and refuse to revisit .
============================================

Unfortunately, GB I agree 100%.

Nothing suggests that anyone at Hampden is suddenly going to find their moral compass after the SC ruling.

IMO, as with the SFA/SPL wheeze to try and slot TRFC straight into the SPL or SFL1 – regardless of what the fans / paying customers thought…

It will only be another, real threat of a fans’ ST boycott which will force the blazers – and clubs – to even revisit LNS.

[And not necessarily to amend any honours won by RFC during the disputed period.]  

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AllyjamboPosted on8:53 pm - Mar 16, 2017


HOMUNCULUSMARCH 16, 2017 at 20:36

‘…I can see no justification for extremely well paid people being allowed to avoid paying income tax when the normal working man has to pay his.’
__________

In my opinion, that is the most important aspect of this whole case. F*** all rich, cheating barstewards! And I mean that, most sincerely, folks.

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easyJamboPosted on9:12 pm - Mar 16, 2017


neepheid March 16, 2017 at 20:43
The only matters under appeal are PAYE determinations.
======================
I don’t believe the above statement is correct.

It will probably surprise some, for me to say that while the CoS decision was reported as a victory for HMRC, and overturned the FTTT and UTTT decisions with regard to PAYE and NIC, the CoS actually rejected HMRC’s second appeal to them about the powers of the “Protector” of the sub-trusts.

For the foregoing reasons we are of opinion that HMRC’s secondary submission must fail. To the extent that the position of the protector is fiduciary, removing the existing beneficiaries and appointing himself in their place would amount to a clear breach of fiduciary duty.

The appeal to the SC, has allowed BDO to contest the CoS PAYE ruling, but also for HMRC to contest the “Protector” ruling. That has led to a lot of time being devoted to arguments about the Fiduciary powers of the Protector of each Sub Trust.

Similarly, I believe that discussions on Benefits in Kind were allowed as an alternative, should the CoS PAYE decision be overturned on appeal.  Thornhill conceded one element of a Benefit in Kind ruling on loans, should that be deemed the correct means of assessing tax in this case (rather that the wider PAYE liability) 

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upthehoopsPosted on9:19 pm - Mar 16, 2017


GUNNERBMARCH 16, 2017 at 20:25  
UTH;________
Apologies meant to add that I don’t believe the SPFL/SFA will do anything regardless of the outcome. They will simply point to LNS as having drawn a line under everything and refuse to revisit .

———————————

I don’t disagree GUNNERB. At least that’s what they will try to do. However, imagine the SC were to rule in HMRC’s favour, and use the same language as the CoS in terms of Rangers possibly not being able to afford the players otherwise. I would hope that more than one club, and more than one group of fans do not let the matter rest. It would of course be the SFA, SPFL, and the media versus the rest. However, it was the same in 2012 and the dam burst. If the verdict is released while clubs are still trying to shift season tickets…

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neepheidPosted on9:36 pm - Mar 16, 2017


easyJamboMarch 16, 2017 at 21:12
Similarly, I believe that discussions on Benefits in Kind were allowed as an alternative, should the CoS PAYE decision be overturned on appeal. Thornhill conceded one element of a Benefit in Kind ruling on loans, should that be deemed the correct means of assessing tax in this case (rather that the wider PAYE liability)
==========================
What else is under appeal, other than the determinations under the PAYE regulations? The only appellants are MIH and RFC so far as I am aware? I remember the determinations which are the subject of appeal being listed in the published decision of the FTT. They were all on the employers.
Any decisions must relate to the determination of those appeals. There might be some sort of general chat regarding benefits in kind, but there is nothing the court can determine in that respect. They might express an opinion, but that’s it.
Thornhill can’t concede anything on behalf of the employees. They have the right to be assessed on any benefits HMRC think they have received but not returned, and to appeal against any assessments made. Nothing Thornhill says can compromise the rights of individual employees to have their own day in court.

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AuldheidPosted on10:32 pm - Mar 16, 2017


Gunnerb  20.25
And anyone else who thinks SFA/SPFL will do nothing.
As long as the question the TJN asked the SFA in this report remains unanswered 
http://www.theoffshoregame.net/sfa-admits-it-did-know-about-rangers-unlawful-tax-avoidance-scheme-at-time-of-nimmo-smith-inquiry/
that is were the SFA supplied with 20th May 2011 letter by RFC as required by UEFA FFP, the SFA cannot use LNS as a defence.
The trick of course is to put pressure on SFA via all clubs,  but Celtic in particular, who may have been denied a CL place as a result of any concealment if it took place.
The vehicle will be Res12 or a further Resolution in the late summer when the justice dust has settled and it emerges there is a case to act.
It’s called a snooker.

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gunnerbPosted on10:44 pm - Mar 16, 2017


AULDHEID
MARCH 16, 2017 at 22:32

Snooker…a game/sport with rules accepted and played by gentlemen(women).

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SmugasPosted on10:49 pm - Mar 16, 2017


Just on the loans debate.  I thought dr Heidi Poons and the CoS’s common sense approach was best.  Namely that without the Feeder payments to the Main Trust from MG (that were taxable), everything done subsequently by that trust supposedly to avoid tax is immaterial.  

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HomunculusPosted on9:19 am - Mar 17, 2017


SMUGAS
MARCH 16, 2017 at 22:49
==========================================

What tax avoidance is

Tax avoidance involves bending the rules of the tax system to gain a tax advantage that Parliament never intended.

It often involves contrived, artificial transactions that serve little or no purpose other than to produce this advantage. It involves operating within the letter, but not the spirit, of the law.

Most tax avoidance schemes simply do not work, and those who engage in them can find they pay more than the tax they attempted to save, once HM Revenue and Customs (HMRC) has successfully challenged them.

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melbournedeePosted on10:14 am - Mar 17, 2017


Jimbo – looks like you have got yourself banned from JJ’s blog. What did you do to upset him? I read his football posts (I avoid any of the conspiracy/anti-feminist rants) as he can bring interesting insights to the topics he discusses but his endless soliciting of donations and his inability to accept any criticism or dissenting opinions makes his blog little more than a one sided fan club.

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wottpiPosted on10:23 am - Mar 17, 2017


Not really wanting to get into a spat with other sites but I do feel I have to stand up for our own John Clark in relation to identifying Tommy McLean as an EBTer.

JC appears to have first mentioned McLean from his notes taken in the CoS appeal in the summer of 2015.

As I understand it, JC wrote down the names in his own shorthand while listening to case being argued by Julian Ghosh. These notes related to the mention of three specific cases of EBT trusts.

As McLean was not on any known list of EBTers at the time other posters on SFM queried which ‘Mclean’ JC was referring to and the possibility of mishearing the name was discussed. Other options of ‘McClellan’ were discussed. However JC appears to believe his notes did say ‘McLean’.

However, in the Supreme Court over the last two days Mr Ghosh once again appear to concentrate on three exemplars for the EBT recipients, Bain, McCann and the aforementioned Tommy McLean. 

Therefore it appears clear that Mr Ghosh has constantly used Tommy McLean’s EBT (along with Bian and McCann) in his arguments to the tribunals and courts. It would therefore not be sensible to bring in another exemplar when dealing with the appeal in the Supreme Court so as to confuse and already complex case.

Any ‘exclusive’, if indeed the terms is even justified’,  on Tommy McLean therefore goes to John Clark who sat in on the CoS appeal and reported the name in the summer of 2015.

All blogs and websites are a useful medium for passing on information to others who may not have had the time or inclination to watch the Supreme Court stream over the last few days but simply repeating something you saw on the telly earlier in the day is some way off from being investigative journalism.

Plenty room for everyone in the world of Internet Bampottery, we all have something to say and most of it is of interest given the different view points and slants that an issue can be seen from.

However, nothing ‘sniffy’ in seeking a bit of accuracy, a degree of self-regulation and  to avoid the SMSM and others portraying us all as nut jobs.

To my mind a bit of camaraderie wouldn’t go a miss to ensure we are all accurate and well informed as opposed to what appears to be, as Denzel Washington said a wee while back, a desire to be first with any news.

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upthehoopsPosted on10:29 am - Mar 17, 2017


HOMUNCULUSMARCH 17, 2017 at 09:19  
SMUGASMARCH 16, 2017 at 22:49==========================================
What tax avoidance is
======================

There are of course some Government approved schemes, such as paying AVC’s on a company pension. This can be particularly advantageous for 40% tax payers. The sum of the AVC is included in the pension lump sum payout which is tax free, and the rest of the pension is taxed at 20% as long as it is below the higher rate threshold.  

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Pat ByrnePosted on11:02 am - Mar 17, 2017


JJ is reverting to his OM and attacking anyone who disagrees in the slightest to his take on the on going deliberations at the SC, JIMBO being the latest to be dumped unceremoniously from the site, why? I’m afraid someone would need to enlighten me on that as I must have missed the dastardly deed. He really does have it in for this site, doesn’t he realise that it serves a different purpose and is set up in a way that encourages discussion which may or may not suit everyone’s take on the ongoing state of the running (or ruining) of the game in Scotland.

I have watched the feed from court 1 and to be honest, I find the whole thing tedious and unengaging, the Council representing both parties either bluster on through tedious facts and fall back on previous cases which mean zilch to me, or make statements which are convoluted and fragmented by long pauses which are interupted only by the continuous checking of the time and consumption of copious amounts of unknown fluids. Why any learned person would want to spend years at the bar to end up passing their employment studying reams of A4 rulings and deciphering their meanings is beyond me but each to their own.
Saying that we have to appreciate their endeavours and the Internet bams who take the time to study the rulings and put it down in layman’s terms for the less well informed such as yours truly, for that we remain eternally gratefully.  Anyway back to the day job, we carpenters have been known to walk on water you know!

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LUGOSIPosted on11:40 am - Mar 17, 2017


John James seems peeved.
Would it be sniffy to point out that one of his takes on yesterday’s proceedings was mooted and debunked at least 12 hours before his post?

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jimboPosted on11:43 am - Mar 17, 2017


I’m not aware of posting anything on this site which would merit jj’s comment about me.  The only time I said anything which could be construed as negative was on his own site.  I referred to feely uneasy about the constant pleas for donations.  How that translates into putting his safety at risk is beyond me.

I think I also questioned whether one or two posters were genuine or alter egos, but he never fell out with me about it, I posted several times after it.

Ironically two posters on here said decent things about him in the past few days but he never seems to notice that.

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woodsteinPosted on11:54 am - Mar 17, 2017


The link below is to the best article on EBTs and their “history” (In my opinion)
Andrew Hubbard is the editor-in-chief of Taxation, a partner at Baker Tilly and a past president of the Chartered Institute of Taxation.
 
https://www.taxation.co.uk/Articles/2016/04/05/334565/heads-i-win-tails-you-lose
 
If full article not available see attachment

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HomunculusPosted on12:04 pm - Mar 17, 2017


UPTHEHOOPS
MARCH 17, 2017 at 10:29
======================================

The point is that if people use such ways of minimising tax in the way they were intended that is not “tax avoidance”. Use of an ISA for example to save money without any tax obligation is not only legitimate, it is also encouraged.

You do it to avoid paying tax, that does not make it “tax avoidance”.

It is actually quite a common thing, people taking the normal English meaning of a word and applying it incorrectly to such a concept. Evasion for example is ” the act of evading something”, however if someone claims back VAT they are not entitled to that is evasion. How is it evasion, in the normal meaning of the word if you get something you are not entitled to. 

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GiovanniPosted on12:13 pm - Mar 17, 2017


IIRC after the Mark Daly (BBC) documentary there were comments to the effect that there was a £10M shortfall between the total of the EBT’s shown in the documentary and the figures take from RFC Ltd accounts as having been deposited into the EBT trusts. 

Now that we have a larger list of recipients can anyone now close that gap or are there still more recipients to be uncovered?

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naegreetinPosted on12:13 pm - Mar 17, 2017


JJ appears a little thin-skinned to-day & attacking SFM – as Wottpi observed above a combination of efforts or mutual encouragement against a common enemy would seem to be a more sensible way to proceed rather than confrontation . Anyway , I see one of his followers has won the lottery & is offering to donate to JJ a sum (not to be sniffed at!) apparently.

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HomunculusPosted on12:20 pm - Mar 17, 2017


I see John James is at his accurate best today.

“(in extending the capacity of Celtic Park and raising finance by prudent share trading – Celtic PLC share price on the London Stock Exchange is currently £91.10)”

With Rangers shares last traded at 20p that would mean Celtic shares being 455 times more expensive.

Now I know there’s a financial gap but who thought it was that much. 

Oh and by “Counsel for HMRC” does he mean the QC representing the Advocate General for Scotland, who is actually the respondent.

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upthehoopsPosted on12:41 pm - Mar 17, 2017


HOMUNCULUSMARCH 17, 2017 at 12:04  
UPTHEHOOPSMARCH 17, 2017 at 10:29======================================
The point is that if people use such ways of minimising tax in the way they were intended that is not “tax avoidance”. Use of an ISA for example to save money without any tax obligation is not only legitimate, it is also encouraged.
===============================

A bit of a play on words if you ask me. I’ve seen it referred to as a ‘legal tax avoidance method’ on financial advice websites.  I quoted the AVC example only because I directly benefit from it myself while paying in, and will do so again when I take my company pension. 

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easyJamboPosted on1:13 pm - Mar 17, 2017


wottpi March 17, 2017 at 10:23
====================
Further to JC’s recollections from the tribunal, a list of RFC Plc tax determinations was published on the “Football is fixed” blog in November 2015.  I noted the link at the time as
http://www.footballisfixed.blogspot.co.uk/2015/11/take-ebt-money-and-run.html
Unfortunately the link no longer works.  That’s a bit of a shame, as it was still there YESTERDAY, when I checked it for Tommy McLean’s name, so I don’t know what is going on today.  There were 83 names on the list. McLean’s name was one of them.

On the other hand, me being me, I had taken a copy of the numbers when the blog was first published in 2015, and put them into a spreadsheet so that I could work out how the determinations were calculated.  It appears that HMRC grossed up the sum received as if it was net of tax, then calculated assessments on the gross amount. e.g. if a player received £60,000 as his EBT, then HMRC calculated £100,000 to be the gross amount of earnings required to produce a net figure of £60,000.  That left £40,000 as the tax that was due on the gross amount, and that is what HMRC used as the asssessment.

In Tommy McLean’s case the raw numbers appeared as follows:
Tommy McLean The Rangers Football Club plc 8,000.00 (04/05) 16,666.40 (05/06) // 2,760.00 (04/05) 5,749.90 (05/06)
The 8,000.00 and 16,666.40 figures are the PAYE Regulation 80 determinations and the 2,760.00  and 5,749.90 were the Class 1 NIC Section 8 decisions.

Taking the 2004/05 figures, McLean would have received an EBT of £12,000, which HMRC grossed up to £20,000 with a resultant £8,000 PAYE liability.

The 2005/06 figures suggest that McLean received an EBT of £25,000 in that year. The gross figure was £41,666.40 with a £16,666.40 PAYE liability.

The NIC assessments also produce the same gross earnings figures as the PAYE calculations, using a Class 1 rate of 13.8% in 2004/05 and 2005/06 which was the prevailing rate at the time. 

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rougvielovesthejunglePosted on2:15 pm - Mar 17, 2017


Obviously Celtic operate on a different financial planet to their ‘competitors’ from Govan Homunculus but when comparing shares, the number in circulation is key.

If Celtic had as many shares as RIFC, at £90 a pop, they would comfortably be the richest club in the world!

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HomunculusPosted on3:12 pm - Mar 17, 2017


UPTHEHOOPS
MARCH 17, 2017 at 12:41
======================================

I hope you don’t think I’m having a pop at you or anyone else who is using legitimate schemes to minimise their tax. I have no problem with that, I can think of no reason why I would.

However that is not what tax avoidance is. Even if people continually use avoidance when they mean management.

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HomunculusPosted on3:21 pm - Mar 17, 2017


ROUGVIELOVESTHEJUNGLE
MARCH 17, 2017 at 14:15
================================

I believe Celtic have 92m shares, which if John James’ figures were correct would make the market capitalisation something like £8.75billion.

Manchester United’s is £2.7billion.

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nawlitePosted on3:36 pm - Mar 17, 2017


The TAB judgement makes King and ‘Rangers’ toxic within the Financial Services Industry….and the other three don’t come out of it well either.
There’s a general perception here – yet to be proven – that because King doesn’t have the money (as far as we know) and won’t be massively impacted by the repercussions, he might decide not to make the offer and walk away from ‘Rangers’ thereby removing the toxicity.
Notwithstanding the ‘bad smell’ effect of toxicity, my take on it is that he can’t really afford to simply walk away from his shareholding. If that is the case, he can’t walk away and remove the toxicity unless someone buys his shares. Who?
Can the 3 bears afford to buy him out? We keep hearing rumours that one or more of them is already having doubts about continuing with the soft loans and, of course, there’s a chance that they might need to make the offer if King doesn’t.
Ashley can afford to, but will he want to? Equally, will the SFA allow him to?
Are any of the others hanging around – Kennedy etc – likely to step in at this point? It seems to make more sense for them to hold off until it goes t*ts up, surely.
Does anyone have a clear point of view if King refuses to make the offer?

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HomunculusPosted on4:00 pm - Mar 17, 2017


NAWLITE
MARCH 17, 2017 at 15:36
==================================

I was under the impression that if he didn’t make the offer then the other members of the concert party could be asked / told to do it instead. 

If that were to happen I don’t think they would be best pleased, particularly Park who works at least in part within the financial industry and would not want a fallout with the FCA. 

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AllyjamboPosted on4:14 pm - Mar 17, 2017


NAWLITEMARCH 17, 2017 at 15:36

What intrigues me is, what if King just walks away but holds onto his shares, would he then be entitled to 20p per share if the 3bears decide to save their reputations by making the offer? I certainly wouldn’t put it past him, if he can get away with it. He’d probably demand repayment of any loans he has power over, too! This could end up costing the 3bears a fortune, with the only improvement in the club’s situation being the departure of King.

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upthehoopsPosted on4:28 pm - Mar 17, 2017


HOMUNCULUSMARCH 17, 2017 at 15:12 
UPTHEHOOPSMARCH 17, 2017 at 12:41======================================
I hope you don’t think I’m having a pop at you or anyone else who is using legitimate schemes to minimise their tax. I have no problem with that, I can think of no reason why I would.
However that is not what tax avoidance is. Even if people continually use avoidance when they mean management

===========================================.

No probs. I didn’t think you were having a go.

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easyJamboPosted on4:55 pm - Mar 17, 2017


RTC tweeting again with a new slant on the SFA’s knowledge of RFC’s finances.

@scottishfa When were you first served with a Schedule 36 notice by HMRC for data on Rangers FC financial affairs? Around 2009?
@scottishfa How often does HMRC serve SFA with Schedule 36 notices relating to member clubs? If unusual, did it trigger concerns within SFA?
After being served / complying with Schedule 36 notice on info on Rangers FC, what did you do to protect the interests of Scottish game?

Schedule 36
http://www.hmrc.gov.uk/gds/ch/attachments/sch_36_v2.htm

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Ex LudoPosted on5:19 pm - Mar 17, 2017


The Schedule 36 tweet from the reanimated RTC might just be a more powerful weapon to move the SFA than any resolutions emanating from member clubs. I don’t recall this piece of handy bureaucracy being discussed before. Then again there’s a lot of stuff in the mix now. 

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Walter NeffPosted on6:17 pm - Mar 17, 2017


As commented above I see JJ is at it yet again.  Melbourne Dee is right about the one sided fan club – I too am banned for pointing out that his writings are long winded tracts flogging the same few points to death. I believe he is also the Mensch, as that ‘handle’ seems to feel that overwritten humbug is as well crafted as a Shakespeare sonnet.  And, if someone had the time it might be illuminating to see how often he is wrong e.g.  Rangers stealing water, Billy Davies will be appointed on Monday, King will lose case to Ashley etc. etc.

Better to read Phil, a man who can write.

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woodsteinPosted on6:25 pm - Mar 17, 2017


For anyone interested,
Here is a definition of tax avoidance from the “horses mouth”.
https://www.gov.uk/guidance/tax-avoidance-an-introduction.
There are also “Spotlight lists” which the Revenue provide to alert taxpayers to
“iffy” schemes.
 
A perfectly good example of tax “management” is the old (now defunct) MIRAS scheme,  (mortgage interest relief at source ) introduced in 1983, to encourage home ownership.

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neepheidPosted on8:49 pm - Mar 17, 2017


I have been trying to make some sense of the “third issue” on which Thornhill has thrown in the towel. JohnJames is saying that this means that the EBT recipients have been thrown under the bus, and will now be personally liable for PAYE/NIC on the sums they have received. I don’t know where he gets that idea from, but I disagree.
Here is the relevant wording.

3. Whether the powers which each employee held as protector of a sub trust had the effect that the funds in that sub trust were unreservedly at the disposal of the employee and were earnings for PAYE and NIC purposes.

I have carefully read the judgement of the Court of Session, and agree with Easyjambo, who points out-

easyJamboMarch 16, 2017 at 21:12
It will probably surprise some, for me to say that while the CoS decision was reported as a victory for HMRC, and overturned the FTTT and UTTT decisions with regard to PAYE and NIC, the CoS actually rejected HMRC’s second appeal to them about the powers of the “Protector” of the sub-trusts.

This alternative HMRC argument, that the protectors of the trusts had total control of the money in the trusts, was thrown out by the CoS on the basis that the protectors (the EBT recipients) acted in a fiduciary capacity, and so did not have absolute control of the sub trusts. That seems exactly what is set out as Thornhill’s point 3 above, yet it is said that having won this point at the Court of Session, Thornhill has now conceded it.
Thornhill must be counting on the SC finding that the payments were not emoluments at all, his points 1. and 2.
As I posted last night, all that is under appeal here are PAYE/NIC determinations on the employers (including RFC). That is an employers liability, and if the Revenue win, then BDO will effectively have to pay most of the money they hold to HMRC. The other creditors will get very little.
Talk of the EBT holders being personally liable is wide of the mark, in my view. There are provisions under which HMRC can, in theory, recover unpaid PAYE tax from the employee. Believe me, that is not a straightforward process, and certainly in my time was only used against Directors who had complete control over the company which had defaulted on the PAYE on their own salary, and even then it was very rarely used.
The responsibility for operating PAYE is the employer’s. That really is the start and finish of it.
Of course if anyone has a more up to date knowledge of the tax system than me, I’m happy to be contradicted.

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goosygoosyPosted on9:43 pm - Mar 17, 2017


NEEPHEIDMARCH 17, 2017 at 20:49
Talk of the EBT holders being personally liable is wide of the mark, in my view. There are provisions under which HMRC can, in theory, recover unpaid PAYE tax from the employee. Believe me, that is not a straightforward process, and certainly in my time was only used against Directors who had complete control over the company which had defaulted on the PAYE on their own salary, and even then it was very rarely used. The responsibility for operating PAYE is the employer’s. That really is the start and finish of it. Of course if anyone has a more up to date knowledge of the tax system than me, I’m happy to be contradicted.
……………………………..
Hard to believe HMRC wont go after individuals in the RFC case  for 3 reasons

 1.Sets a bad example to taxpayer  and fly by night outfits 
e.g.
Companies operating non compliant EBT schemes  can pay their employees netto  and then wind up the business when HMRC catch up with them…. With the employees winning tax free payments into the bargain…Thats the sort of idea that could catch on
2 The average amount  of unpaid tax  per employee in  the RFC case are huge It will exceed what many low earners would pay in a lifetime of work
3 The RFC EBT people  are well known to the Scottish public Seeing an English HMRC letting them off with a tax fiddle while hammering many English EBT employees at this stage in the austerity cycle would be bad politics  
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

In their favour of course is the power of the Brethern and the unseen hand of SDM
Indeed the intervention of the Brothers may be the easiest explanation of why HMRC did not win the First  and Second Tier Tribunals
The full Decision of the Scottish Law Lords  is scathing in its criticism of these lower courts and fully supported  many of the comments of Ms Poon
They actually stated that they had stopped short of  endorsing her full Minority Report because she based some of her conclusions on Tribunal  evidence that happened to be  excluded from the list of facts submitted to them in the Appeal Documentation
http://www.bailii.org/scot/cases/ScotCS/2015/%5B2015%5DCSIH77.html
Frankly
after reading the above which contains a lot of the narrative put across so boringly this week

 HMRC will win hands down
 

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grecian urnPosted on10:15 pm - Mar 17, 2017


Chapeux to RTC on Orwell Fellowship. I am one, and suppect there are  many, that joined FSM on the back of his/her work

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GeordieJagPosted on11:48 pm - Mar 17, 2017


EasyJambo at 13:13
Your records of Mr McLean’s EBT are exemplary but for full supposed details of everyone else’s go to http://archive.org/web, paste the full footballisfixed webpage address, and go to any of the historic cached pages to luxuriate in the detail.

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AuldheidPosted on12:32 am - Mar 18, 2017


Ex LudoMarch 17, 2017 at 17:19 16 Votes 
The Schedule 36 tweet from the reanimated RTC might just be a more powerful weapon to move the SFA than any resolutions emanating from member clubs. I don’t recall this piece of handy bureaucracy being discussed before. Then again there’s a lot of stuff in the mix now.
===================
Indeed. Slow glass. Posted on SFM on April 2015 but the glass is about 2 years thicker than thought at the time.
Auldheid says:    
April 4, 2015 at 3:15 pm  (Edit)
The thing about Jim Spence I feel is that if he were not in the mainstream media he would be on here posting or blogging.
He cares about his club but is balanced, he cares about the game and loves both.
He was talking on Sportsound there about Dundee United being caught on the back foot on the matter of the make up of the managers contract in respect of player sales.
The conversation turned to transparency and for football to catch up in realising it has to become more transparent in its dealing with supporters.
What football has not realised is that transparency is already here but in a form that makes us slow to realise it.
The medium is social media and the ability to share, but is contained by Slow Glass.
Slow Glass from a short story by Bob Shaw slows down the light passing through it.
http://en.m.wikipedia.org/wiki/Light_of_Other_Days
In the story and others you have Slow Glass of different thickness in terms of the time it takes for the light to emerge.
You have Glass a day thick/long to Glass ten years and more thick/long.
Thus the Dundee United story was captured by Slow Glass about 3 or 4 weeks thick. Maybe more or less as I don’t know the detail but you get the drift.
The Rangers story will emerge in full over 10 years thick glass.
The LNS story will take at least another year before the truth will emerge that shows it to have been a sham.
Res12 if measured from the Celtic AGM in 2013 will take two years for the truth to emerge.
The thickness/slowness of the glass depends to a large extent on main stream journalist removing the dust of PR that slows the light, but light is inexorable.
It can do nothing but shine.
The sooner authority and not just football realise that transparency is already here emerging via Slow Glass the thinner the Glass will become.
No more waiting years for the truth to emerge, which might just make folk act truthfully and honestly in the first place. It will be an interesting future as social media replaces mainstream as music downloads replaced CDs ( that replaced tapes that replaced records that replaced cylinders)
In the meantime let’s keep our football Glass polished and hasten the emergence of light in our own landscape.
 
 

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HirsutePursuitPosted on9:00 am - Mar 18, 2017


Just a quick point re the supreme court.
 
I’m not sure the point conceded by Mr Thornhill has any great significance.

Earlier in the day Mr Ghosh had raised a matter relating to PAYE that was questioned by (I think) Lord Carnworth. The point being raised had not been previously disputed by the other side. Mr Ghosh agreed that this was not currently a matter under question, but he was seeking to cut off the possibility that HMRC could win on the substantive points but find difficulty ‘further down the road’.

I think there were several strands to this, but perhaps the most important is the different descriptions of ‘payments/emoluments’ in the various acts and regulations. This laid open the possibility that a liability for payments could be established under one act – but (giving a different interpretation to the meaning of payment) the PAYE regulations could be useless in collecting the debt. Mr Ghosh sought to show that the acts/regulations were consistent and asked the court to take a view on this in its judgement.

As I understand it, Mr Thornhill simply agreed that, in this case, if a debt was established, the PAYE regulations would be applicable. So the court did not need to consider the matter.

HMRC, of course, used Regulation 80 determinations (from PAYE) to quantify Rangers liability, so it is difficult to see how this concession by Mr Thornhill could be interpreted as transferring the liability to the employees.

That is not to say that the debt (or what remains of it) may not ultimately land at the feet of the employees. It may well do so, but conceding that PAYE applies if the liability for tax is established does not, in my view, remove that liability from the original Rangers Football Club.

As ever, happy to be corrected in any of this.

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HirsutePursuitPosted on9:25 am - Mar 18, 2017


I think what has also caused some confusion is that Mr Thornhill referred to Issue One and Issue Two in his summing up. There were, of course, three Issues to be settled.

However, the original Issue One and Two had effectively been rolled into a single issue by his earlier concession (on PAYE) and so, what had been listed as Issue Three, became the second Issue.

Also, the question that was asked by Lord Carnworth at the very end was completely unrelated to the PAYE ‘concession’.

He was being asked if it was his view that HMRC should not have been bringing points not previously argued (relating to benefits in kind) in the lower courts, to the Supreme Court. Mr Thornhill said ‘yes’, that was his position.

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HomunculusPosted on10:02 am - Mar 18, 2017


It brings up an interesting quandary if (when in my opinion) the Supreme Court reject the BDO appeal.

This means that the outstanding tax is due. Which would mean that the HMRC portion of any creditors pot gets much higher. However that would only mean a small fraction of their debt being paid to them. Bearing in mind some of that is VAT and some is PAYE/NI.

So if HMRC get paid a percentage of the PAYE/NI would they be able to seek the remaining amount from the employee. Or is that down entirely to the employer. Bearing in mind that this is not money that the employer collected and failed to pay over to HMRC but is an amount which was claimed to be tax free and therefore never collected in the first place.

So HMRC could presumably take the position, yes there was tax due but no you didn’t pay it so we want it directly from you. If that is the case could they even decide not to seek it from the employer at all and go straight to the employee. Thus reducing their claim in the liquidation (to the VAT) increasing the pot for everyone else, and go straight to the employee. 

This would be very high profile and would send out a strong message re tax avoidance, to both employers and employees.

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Corrupt officialPosted on10:25 am - Mar 18, 2017


   As I understand it, the club have idemnified the players should it all go Pete Tong.  So regardless of what Thornhill argues the players have a get out of jail free pass. 
    However, should the payments be declared unlawful, would a contract to commit an unlawful act, still be considered a legally binding contract? 

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HomunculusPosted on10:30 am - Mar 18, 2017


CORRUPT OFFICIAL
MARCH 18, 2017 at 10:25
=================================

If I understand that correctly, all that would do would enable the player to sue the liquidated club which provided the indemnity.

Sounds awfully like throwing good money after bad to me.

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