2007 - 2021

EBT Come Home

IShoot-Sounesst’s not been a great day for the club currently residing at Ibrox. The Scottish Championship leaders announced a loss of £7.5 m and their Chairman could be spending his Christmas behind bars, if his retail salesman has anything to do with it. But far far worse than that, the big bogeyman of The Big Tax Case has come round to bite them on the bum. There’s several immediate consequences of this. The first is the reality that the old RFC were very successful with players they could otherwise not afford. As Alex Thomson, perhaps the journalist who has done more than any to examine this situation states:

“The judgement by three Scottish Law Lords is as comprehensive as it is damning. Whilst Rangers FC were busy winning titles and silverware the entire basis upon which they paid many players and executives should have attracted income tax and did not do so. Hundreds of thousands of pounds was paid in “loans” through a trust scheme which at the time was seen as a way of avoiding paying income tax. You may wonder why Rangers – and other clubs – could exist in some kind of non-PAYE parallel universe. Now the Law Lords have wondered too and simply stated that “common sense” would suggest Rangers should have paid tax like the rest of the UK does. Further – the non payment of tax allowed the club to buy and pay players it could not otherwise have afforded. A previous legal judgement ruled that the club gained no advantage. Today’s successful appeal by the HMRC would seem to bring that ruling into question. There is no getting away from it – the upheld appeal means Rangers were systematically cheating the taxman whilst winning titles on the pitch.”

The story, which already had an Edgar Allan Poe element about it took a further surreal twist. As the fallout from the HMRC verdict continued, Rangers fans were busy insisting they’re a new club while Celtic fans insist it’s the same club. ‘Rangers’ identity-contortionism looks like continuing.

Lets not forget Dave King was on the board at the time of EBTs.

Second. Lord Nimmo’s decision on whether RFC gained advantage surely now needs revisited? The noble Lord’s decision was predicated on EBT’s being legal, so that any / every other club could have done the same. They weren’t, so other clubs couldn’t.

Nimmo’s report stated that it was not a breach of SPL rules to minimise tax liability and it accepted that Tax tribunal ruling that EBTs are lawful.

Now they’re not.

At the time the report stated: “What we are concerned with is the fact that the side-letters issued to the Specified Players, in the course of the operation of the EBT scheme, were not disclosed to the SPL and the SFA as required by their respective Rules” (p31)

“Oldco’s failure to disclose the side-letters to the SPL and the SFA was at least partly motivated by a wish not to risk prejudicing the tax advantages of the EBT scheme, we are unable to reach the conclusion that this led to any competitive advantage.” (p31

No sporting advantage means the Commission did not consider any sport-related punishment.

“We therefore proceed on the basis that the breach of the rules relating to disclosure did not give rise to any sporting advantage, direct or indirect. We do not therefore propose to consider those sanctions which are of a sporting nature.” (p31)

That’s all changed.

Other teams and supporters might like to reflect on what the cup and league results had been if the following beneficiers had been absent?

Alan Hutton, Alex Rae, Alex McLeish, Andrei Kanchelskis, Arthur Numan, Barry Ferguson, Bert Konterman, Kris Boyd, Lorenzo Amoruso, Michael Mols, Tore Andre Flo (maybe not), Ronald De Boer and a dozen others.

The harsh reality is this:  ‘Rangers cheated and the truth is unpalatable, the damage irreversible’.

Third, what is the position of the SPFl / SFA on this? Pliant scribes and media cheerleaders were prematurely celebrating Rangers return and business as usual prior to their defeat to Hibernian at the weekend. They’ll presumably be a little quieter now. But never mind retrospective stripping of titles – the real issue now facing the Scottish football authorities is, are they – can they – will they – in the light of their endless prevarication and hopeless mismanagement – take the proper steps to oversee the financial stability of this football club in the light of emerging facts and evident insecurity?

We doubt it.

But if the club goes to the wall again, with the subsequent upheaval and mayhem cast against other clubs who act within the law, it’s not the Rangers cabal that will be at fault, it is the fawning and useless administrators in our game that should be held to account.

The BBC’s Mark Daly today writes (‘How Rangers’ dubious tax wheeze unravelled’) : “But ultimately, who has paid for this disaster? The fans, of course.” Well yes, but the fans of other clubs denied the income of league positions or cup victories who are the real victims here.

And finally, it’s make your mind up time for Rangers fans. If it’s the same club it’s the same debt. If it’s not, it’s a new club. Don’t really mind what story you want to go with, but you can’t have both.


Comments (55)

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  1. Steve says:

    I bet you had this article in waiting like a coiled spring. The problem is, there is no more OldCo to represent itself. If there was, it would be challenging for an appeal (again). Even though it was twice proven against this verdict, it was always going to be only one outcome, as laws of probability show. You lose? Just keep appealing and eventually someone will agree.

    1. Tom says:

      Well no, actually. The legal process will reach the highest court eventually, assuming that leave to appeal is granted. After the Supreme Court it’s down to God and I’m pretty sure that his mum and most of the saints aren’t on Rangers side.

    2. Thomas Jones says:

      Rangers Werent The Only Club Useing ETB Scheme At Time Other Clubs From Scotland And England. Were Doin It 2 And Celtic Were Probably Doin It As Well Thomas.

      1. Saor Alba says:

        @Thomas Jones.

        C’mon then. Name the other clubs for definite.
        And “probably” is your biased opinion – nothing more.
        State anything more definite and you may be courting some difficulty with the law.

  2. Andy says:

    What amazes me is that it has taken this appeal by HMRC to finally establish that the use of EBT’s was illegal. Anyone who could accept that a ‘loan’ that didn’t need to be repaid was a proper ‘loan’ must be off their trolley!! The fun starts now as calls will surely be made for a full enquiry into this scandal.

  3. Eddie Docherty says:

    It’s the Murray Group who will decide whether or not to appeal. RFC is dead so they can’t, obviously. David Murray was the biggest beneficiary of EBTs – he got over £6m tax-free that way – so he will decide if it’s worth an appeal. It’s the company that is liable now, not the players etc.

  4. Penny says:

    Its about time someone set out a clear account of the truth about the events at Rangers FC– old and new. The only amendment I would make is to add some comment on the corruption of youth this sad story implies. The crooks circling the cash at the club and the incompetents at SFA level relied on the naive loyalty of the fans. The only sensible action at this point is to close Rangers down; sell off whatever is left, pay off the legitimate creditors and distribute whatever remains to all the clubs they cheated.

    1. Kenneth Macaulay says:

      There is about to be a criminal trial to decide the level of larceny involved in the Rangers “takeover “and no doubt this will lead to a further media bean feast.Your suggestion that the club should be shut down and the proceeds used to pay the ” cheated clubs “is as offensive as it is laughable.How exactly would this be done and who exactly would do it ( there is no precedent in law for such a course of action ).Would you for instance reckon that wee Steven at DUFC is owed money when he constantly defrauds his own fans sporting expectations or the the descendants of the Kelly’s and Whyte’s who brought Celtic to the brink of ruin through rampant financial sophistry should bring their money bag along .I have never watched a Scottish game since the Rfc liquidation and never will again –you are all welcome to your petty hatreds and thinly concealed bigotry and in the meantime l will watch football of my choice for the joy of the great game it is .Your comments on the corruption of youth are frankly incomprehensible —what exactly are you equating this with –child abuse? –it’s 22 men kicking a ball around a grass park —have you never heard of Rotherham that’s child abuse —l believe sky paid 2.2 million for tv rights to Scottish football –they overpaid by 2.19 million

      1. Duncan McAskill says:

        Kenneth, the only constant at Ibrox over the past 10 years is the bigots that turned up 10 years ago are still turning up today. Hugely embarrassing.

        Dave King has had the opportunity to stamp down on the bigots and encourage non protestants, Scots Asians, Black Scots, newly arrived people from EU and or anywhere else to Ibrox, not a word from him.

        Rangers look increasingly anachronistic in the new Scotland, no more so that the clowns who turned up in George Square last September.

        Many like me after George Square gave up on Rangers after a life time of supporting them and hoping they would turn the corner and expel the bigots. The club seem entrenched in seeking to hold onto the die hards, this will ensure the glory days never return. Saddest of all, this strategy as a direct consequence sees the Scotland team fall further behind in the international standings.

        Taxes are the least of Ranger’s worries.

        1. Bryan Weir says:

          Duncan. like you I was once a big Rangers fan and also like you the bigotry and behaviour of the fans turned me right off. However I have to say that I think you are being unreasonable in expecting Dave King to turn round 100 years of bigotry in six months.

          Regarding Scotland, ten years ago they dropped to 77th in the rankings. They are now at 44.

      2. Saor Alba says:

        No Kenneth. The offensive nature of this is that this ONE club in Scotland strived to cheat their own creditors and succeeded. The are small businesses who have gone under because of these cheats. That is what is OFFENSIVE!!

  5. Socrates MacSporran says:

    In the above story, you wrote:

    “As Alex Thomson, perhaps the journalist who has done more than any to examine this situation states:

    He may be an obsessive, when it comes to matters concerning the football club which plays out of Ibrox Stadium, Glasgow, but, it has to be admitted – the journalist who has done more than any to examine this situation is not Alex Thomson, but Phil MacGiolla Bhain.

    Please give him the credit he deserves in this matter.

    1. Phil Mac Gillard Bháin says:

      Many thanks.
      For the avoidance of doubt most investigative journalists usually are smeared with the “obsessive” tag.
      Incidentally I was honoured that Alex Thomson wrote the foreword for my book on the death of Rangers ‘Downfall’.

  6. john young says:

    Money has brought the high and mighty to their knees down through FIFA/UEFA/SFA,the latter being a microcosm of what,s wrong in our country,the powers that be burying their head in the sand not only about the EBT,s but their administration of the game through appointed officials on and off the pitch,witness Alan Muir the referee whos total blindness in not seeing 3 blatant penalty decisions against Celtic in 2 games leave me dismayed and cheated,I am obviously a supporter of Celtic and wish that I didn,t have to post about this but it has to be said and not only do the decisions go against my team but the rest of the teams in Scotland,how can we go on and move forward?when bias and outright cheating is condoned by those tasked with running the game in this country,I find it incredulous that even those Rangers supporters who are good and decent cannot/will not see what,s happening.a team of Rangers stature should have no need to have bias/favouritism to succeed,how can you celebrate victory knowing that it was loaded in your favour,this defeats me.I can only see a take over from true Rangers supporters as the way forward,as long of course that they could keep out the bigots a very difficult task.Scottish football needs a strong vibrant Rangers but without the baggage.

  7. Bryan Weir says:

    I am struggling to understand why a blog like Bella Caledonia is chortling over an establishment victory?

    1. Eddie Docherty says:

      Aye, cos underdogs dodge tens of millions in tax 🙂

  8. SFM says:

    As the fallout from the HMRC verdict continued, Rangers fans were busy insisting they’re a new club while Celtic fans insist it’s the same club. ‘Rangers’ identity-contortionism looks like continuing.

    Are the opinions of fans of other clubs not relevant then? I think you make the “Old Firm Prism” mistake of assuming that anyone not a fan of Rangers must be a fan of Celtic. Or indeed of making the assumption that only Celtic were affected by the actions of David Murray’s team.
    All of us in Scottish Football are damaged by what went on.

    Fans of all clubs at SFM have observed the irony of Rangers claiming (for these purposes) to be a different club. Fans of other clubs are not so afflicted. The consensus is that the current Rangers are indeed a new club – one which is unaffected by today’s decision.
    No-one at SFM is asking Lord Nimmo Smith to reconsider the honours won by that new club either.
    Existentially then, for today at any rate, we are at one.

    Bit disappointed in the binary “Blue & Green” stuff though.

  9. Ex director says:

    King has something huge up his sleeve!! Mega huge i tell ya!

    Current info = HMRC have lost, again! Oops

  10. Ex director says:

    Am telling you! Telling you all! One day, one day i WILL get something right!

    Heard it here first 😉

  11. bill fraser says:

    As far as I can see it’s a never ending story and could drag on for quite a time.

  12. Bryan Weir says:

    Club Statement

    WE WOULD like to correct some misleading information that has been circulating on what is described as the “Big Tax Case”.

    For the avoidance of doubt, Rangers have not lost the case. There is no question of any liability impacting on our Club, its history or any member of the Rangers International Football Club plc Group.

    The Rangers Football Club and the entities which currently own and manage it are not party to these proceedings nor do we have any say in what happens. The proceedings are a matter for those affected by them.

    We note that the assessments for tax which were the subject for appeal and which are referred to as the Big Tax Case relate to Murray Group Holdings Limited, Murray Group Management Limited, The Premier Group Property Limited, GM Mining Limited and RFC 2012 PLC (in liquidation).

    1. Eddie Docherty says:

      100% spot on – you’re a new club.

      1. Ex director says:

        Spot on Eddie! Old rangers 1872 were never , ever called sevco scotland nor did they change their name 😉

        Will stand corrected if a newco rangers fan can show me evidence i am wrong 😉

  13. Big Mike says:

    I really do hope these cheats get what is coming to them. They have done the whole of Scottish football a massive disservice. As for their support they have no shame and will continue to blame all and everyone outside Ibrox.

  14. Black Rab says:

    Rangers were part of the unionist establishment and proudly represented themselves as part of that. Murray decided that he wanted to cheat the taxation system of that union to aggrandise himself even further of the team and business also.
    Rangers in other words did not want to pay for the system that had made them what they are, they shate on their own flag for money they didn’t need. Their mask didn’t slip, it fell from their faces like leaden weights and went straight to the floor. The dogs on the street knew what had happened.
    Their apologists now attempt to form ridiculous scenarios of their victimhood.

    1. Ex director says:

      Well said Rab! 😉

  15. thomas muir says:

    So what if were a new club ? Dry your eyes you obsessed sad lot and concentrate on your own team and ask why they cant win a treble or do anything noteworthy in europe. And the land sale backhander aswell.

  16. willie says:

    I am not a Rangers fan nor any other club for that matter.

    The story as now being run by Bella does however, at least to me, have a sectarian tinge to it.

    Why do I say this?

    Well from a completely impartial view it strikes me that football, like our beloved capitalist system of accounting has become a pyramid of financial wheeze, trickery and obfuscation.

    No different from the Starbucks or Anazons transfer pricing profits or Tesco understating costs, many other football clubs will have been involved in tax efficient employment benefit trusts.

    But somehow Rangers have been singled out for the might of state investigation and pursuance. Found innocent on two occasions a third go has now reversed entirely these previous decisions.

    Concomitantly, the powers of the state, on a separate matter relating to the capitalisation of future income and company law pursue a criminal case against ex directors and professional associates of now defunct Oldco Rangers.

    Oh were it so that the bankers who ruined the economy were so vigorously pursued or any of the other corporates for that matter.

    But no, the Rangers story is the story above storys and I for one am quite surprised at the vigour with which Bella has reported this latest turn.

    The establishment picks and chooses who is allowed to run free irrespective of what they do, whilst others, like low level benefit cheats get singled oot.

    Seems Bella, at least from this article agrees.

    1. Albo says:

      Nowhere in your analysis do you explain where there is a sectarian tinge to this article. Could it be that you are just bandying a word around without knowing what it means?

      Rangers has been singled out because it is more than a business, it is an institution at the heart of Scottish football – and football is an important element of Scottish culture and identity. Sectarianism doesn’t factor into it at all. All Scottish football has been affected by the behaviour of Rangers. That’s the point.

  17. john young says:

    Regardless of all points of issue the essence for me is did or did not Rangers get an unfair advantage by using EBT,s if they did they cheated and we have enough of cheating at all levels whether in or out of sport.Willie as far as I am aware Rangers are not the only club being pursued,EPL clubs are under the microscope,also at the heart of the Rangers financial mess was none other than Murrays pal Gordon Mathieson head of the RBS,once more bankers involved.

  18. Bryan Weir says:

    A very good point Willie! Unfortunately there is always the suspicion of underlying sectarianism when subjects like this are broached. IMO it is better to avoid them as most Bella readers are (I assume) trying to unite for the same cause and it is not any Scottish football team.

    Evidently some people are relishing the tribulations of Rangers FC and, at least in the West of Scotland, the underlying reason for this will always be questioned.

    What bothers me is that Rangers FC did not invent EBTs but the vigour with which HMRC has pursued them leads one to question their real motives. This is especially true given that they (HMRC) have refused to say what their five year pursuit of Rangers has cost the taxpayers.

    How many rich football clubs in the South quietly paid the taxman and we heard no more about it?

    1. Eddie Docherty says:

      HMRC have indicated all along that the Rangers case was a bit of a test case for them, in that if they won they could then go after lots of other companies which employed EBTs. Your hinting of subterfuge on their behalf is wrong – Rangers had the option of settling with HMRC long before it got to court, but they refused to do that (and actually hindered HMRC investigations from about 2004). Instead of putting money aside to cover them in the event of losing the tax case they continued to spend – even as late as 2010, spending £4m on Jelavic when it was clear they were facing a large potential liability. It was madness. The only people to blame are the people at Rangers who made those decisions.

  19. Will says:

    Sorry Mike, but your last para is factually (legaly) wrong. You are confusing the distinction between a company and the club/business which is an asset of the company. The debt is attached to the company. When the club’s assets were bought in liquidation the debt wouldn’t normally follow (although there was a limited agreement with the league in order to obtain admittance).

    The oldco holds the debt liability. The new company is not by default liable for the previous debts as they are separate legal entities, albeit the business/club are not new.

    1. Eddie Docherty says:

      Schrodinger’s Rangers appears agan. What part of liquidation do you not understand? 🙂

      1. Will says:

        Sorry, I’m just a humble solicitor, can you enlighten me?

        1. Eddie Docherty says:

          Sure. Show me how under football rules or company law a football club is a separate entity from its “holding company”. Did the mythical Rangers holding company have different articles of association, or different directors, from the club?

          1. Will says:

            Well first off, football rules aren’t really applicable to company law, they are separate. Secondly it’s fairly agreed in company law that the business operations/interests can be separated from the holding company and sold or transferred to another company. Celtic did it in the 1990s.

        2. Eddie Docherty says:

          Quite simply, if the holding company existed the proof will be in the contract of assignment from Rangers – it has to be logged with UEFA via the national association. So the SFA and UEFA will have a copy to hand. We’ll wait here – off ye go.

  20. john young says:

    You should not win if you CHEAT if Rangers old or new did not gain any advantage from the EBT,s then there is no argument,if they did then they should be punished,it surely is as simple as that.

    1. Bryan Weir says:

      How do you punish them if they no longer exist?

  21. willie says:

    I think the various points being made are that no one likes a cheat.

    What however is concerning here is the vigour with which Oldco Rangers have been pursued by the might of the HMRC whilst concomitantly the might of the Crown Office and police has similarly been deployed against ex directors and professional associates said to have in concert capitalised future earnings in contravention of the Companies Act

    1. Eddie Docherty says:

      It’s a conspiracy 🙂

      1. willie says:

        Yes indeed Eddie, it is indeed a conspiracy. Not one banker jailed for the banking collapse nor so for the rigging of foreign exchange rates or interbank lending rates.

        Ditto the case where Tesco could understate costs to nassage their annual accounts or where the Amazon and Starbucks could transfer price their profits out of the UK to offshore jurisdictions.

        Yes, just a pity that these big boys are not pursued as vigorously as Rangers. That’s my concern but whether it’s a conspiracy Eddie, I couldn’t say.

        1. Eddie Docherty says:

          You’ll get no argument from me about the bankers, or the tax-avoiding multinationals, Willie. It’s disgusting. Loads of companies have been done over EBTs though so it’s wrong to assume Rangers were singled out. They had the chance to settle but decided to keep spending instead. Hell mend them.

  22. Bryan Weir says:

    Mike Small spends an inordinate amount of time haranguing Rangers and their management and he has been doing it for years. There is something unhealthy about this.

  23. john young says:

    Bryan Weir so you just accept it?I don,t know,what I do know is that it is a stain on those that are charged with running the game,they are inefficient/inactive and not fit for purpose,they have lied and cheated over many different issues yet are still in office,wasn,t the Chairman of the SFA Campbell Ogilvie a recipient of the largesse yet he oversees this shambles all that is missing is Sepp Blatter,what about knight of the realm the honourable Sir David Murray who quietly slunk away,it is a real murky mess yet we want to move forward to be independent and run our own country ffs.

  24. David says:

    I have no interest in football. As someone who has paid a lot of tax every year for decades some of it at higher rates, I am proud to have helped pay for our welfare state. How dare these scumbags cheat me and everyone else. I have read that the recipients of these “loans” will not be pursued for the THEFT of this money from the public purse, is this true?

  25. Bryan Weir says:

    Scumbags is such tired and uninventive description. To me its use tell its own story but yes, this is true. Having said that it must be said that there are bigger targets for your ire if you are concerned about tax avoidance. Checkout Starbucks, Amazon, Facebook, Apple, Google and eBay and do the sums. They do it to to provide their stock holders with BIG dividends. Glasgow Rangers EBT? A mere bagatelle.

    I would reckon that HMRC has spent more than they could ever hope to recover on this case. For what and why?

    The only reason we are discussing it in here is because the editor is on a crusade. Think about it!

  26. john young says:

    Bryan straightforward answer did they use EBT,s to gain an unfair advantage if they did then they should be punished,surely you cannot condone cheating anywhere anytime anyhoo.

  27. Bryan Weir says:

    Yes, of course they did but the club that did so no longer exists. Who do you propose punishing?

    1. Saor Alba says:

      The people who were involved in running that club – some of whom are presently involved in running the phoenix.

  28. willie says:

    A question that I have in relation to the Ranger’s saga is why the HMRC will not disclose how much they have spent pursuing Oldco Rangers which is now in administration.

    The costs will undoubtedly run to many many millions of pounds but the HMRC has steadfastly refused to disclose any information.

    What therefore are the citezenry to make of this when an arm of the state point blank resists every request to provide transparency on an issue.

    I do not condone Oldco Rangers tax avoidance in any way, but why is there so much secrecy about costs.

    Additionally, when the Police will not investigate financial malfeance issues hugely greater than Whyte and Co’s externally manipulated capitalisation of future ticket sales in contravention of company law, why has so much effort and public money been spent pursuing these people.

    Day and daily the Police and Crown Office decline to pursue valid cases on the grounds of cost, and as we have seen on the big stage, the big corporates walk free and unchallenged whatever they do.

    So why the inordinate focus on this particular issue. For me it brings into sharp focus what a rotten burgh we reside in.

    Economic crime pays, and pays well the bigger the crime. No doubt however the tidal wave of corporate crime and rotten capitalist system will will be of lesser a concern to many than the behaviour of Oldco Rangers and individuals subsequently involved in that clubs reincarnation.

    They are as one commentator said an institution!

    Iceland went after and jailed the bankers. But Iceland clearly have different priorities and focus, unlike here.

  29. Bryan Weir says:

    Absolutely Willie but I must say that there is a certain irony in Rangers being pursued by the Unionist establishment that traditionally they so cherish.

  30. john young says:

    We unfortunately live in a materialistic/money is God society and corruption/greed follows as night follows day,are there any out there who are decent and honest,it would seem very very few.

  31. C Rober says:

    The whole point of the big tax case , well as I see it anyway , is to set a precedent , not only for Scotlands football clubs but those in England.

    Why you ask?

    If Hmrc sets this precedent on a “dead” club , which has no resources to fight against it , then next on the jotters is every “live” club that used EBT to pay players. One can presume , taking the wage bills of the top4 premiership clubs , that there is substantial money to be clawed back , “with penalty , pun intended”.

    So its not just a wee parochial sectarian conspiracy thing , its a tax thing pure and simple , the club may be dead but the players that benefited arent , they are the ones that should be worried……and feart of the thud on the doormat of a big brown envelope.

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