The Tribunal: Is it actually finished?


I have been operating under the assumption that the First Tier Tribunal dealing with determining the illegality of Rangers’ tax strategy for the last decade had finished on schedule on Friday the 6th of May.  However, I have yet to actually find any confirmation of this.

My sources of information for this issue and I had previously agreed, and are maintaining, a ‘zero contact’ policy  until the tribunal returns a result.  So my access to the case will be limited until then.   However, other lines of enquiry have also drawn a blank.  Rangers FC will not be interested in keeping their supporters informed on an issue of such negligible risk.  Additionally, I doubt that they will want to put this subject back on the radar for a news cycle by commenting.  Some journalists I am talking with have also been unable to confirm that the First Tier Tribunal finished on schedule.

“Absence of evidence is not evidence of absence”.  So it might be complete, but I just wanted to correct any impression I had given that it was.

In the event that it is not complete, the inquest will doubtless begin in the vacuum with all of us who follow this subject reading the entrails of the beast to divine meaning where none may exist.  If you want to believe that Rangers will not face an unpayable bill, this would be a sign that HMRC’s case cannot be that good.  If you want this to be the execution order for the club that started in Flesher’s Haugh in 1872, you would see further delay as an indicator of the vast mountains of evidence against Rangers.  In truth a further delay would probably signal neither.

In a case involving £48m of transactions from Rangers FC (and a further £2m from MIH) and an average “loan” transaction of £50,000, there would be at least 1,000 transactions that would have to be dissected in detail for the judges.  This would involve tracking the disbursement of funds to an employee from the EBT.  Each payment must have a corresponding loan request (with multiple extension documents).  HMRC will be trying to match loan requests to player contracts: either on a one-to-one correspondence or where aggregate amounts due to players match aggregate amounts paid through the EBT + legally paid emoluments (salary and contractual bonus).  Any other documents relating to these payments that may exist would also be presented.  In summary, it is quite an onerous task given the amount of money and the number of transactions involved.

If Andrew Thornton QC is under instruction to slow things down, it would be a trivial task to do so.  Questioning the admissibility of each piece of paper or verification of the authenticity and data integrity of the information on each sheet of paper could really slow progress down.  Even if not deliberately trying to slow the process, but just doing his job to try to limit the damage by getting anything he can excluded would also have a retarding effect on progress.

If the submission of evidence and cross-examination was not completed last Friday, it could mean a further six months until the tribunal can reconvene.  At this stage, no one wants an answer to this saga one way or the other more than I do.  I sincerely hope that the tribunal is moving towards a finding right now.  However, it suddenly struck me that I have no independent basis for believing that it is.  I just wanted to keep you all up to date and as well informed as I can.

About rangerstaxcase
I have information on Rangers' tax case, and I will use this blog to provide the details of what Rangers FC have done, why it was illegal, and what the implications for what was (updated) one of the largest football clubs in Britain.

214 Responses to The Tribunal: Is it actually finished?

  1. The law firms that serve as trustees take very healthy fees. Hence, they know on which side their bread is buttered. The lawyers’ fees are still much less than paying tax on the money, so everyone wins except the Treasury.

  2. Boab says:

    Everyone wins except the Treasury and us.

    People who don’t pay their tax are stealing from all of us.

    That’s why I have no sympathy for football clubs and millionaire players who get caught not paying their taxes. That’s the money we need for schools, hospital, roads and everything else we need to sun a country. They are not stealing from the Government, they are stealing from everyone else.

  3. George A says:

    Interesting point re HMRC possibly going after employees after the employer has gone bust. Is it fair to say then that HMRC’s interests would best be served by extracting as much as possible from the employer, liquidating them in the process and then going after the employees.

    You could make a case that if the duty of HMRC is to maximise the tax take for the Treasury then they have a duty to act in this way.

    In the particular case of Rangers FC you earlier commented on the fact that they had refused a settlement of £10m despite the fact that they were unlikely to get £10m from this particular employer in the event of an insolvency event. You could understand this approach in terms of wishing to set a binding precedent but might this be another reason for refusing to settle in this instance?

    If they could get say £8m from the employer before liquidation and then another say £8M from the employees they could come out ahead in this particular transaction AND set a useful precedent.

  4. Boab says:

    My own personal feeling, and it is just a feeling, is that they would be more likely to approach the players and their agents for evidence to use in the case.

    It was Rangers who set up and operated the EBTs so they are the natural target for any action. However the players are well placed to say what the arrangement was e.g. were they promised certain amounts through these trusts.

    In addition and being totally pragmatic, how many of them are still UK residents. How easy (and cost effective) would it be for HMRC to actually collect any back tax from them.

  5. tomtom says:

    Do HMRC not tend to work on the premise of “guilty until proven innocent”. If they have any evidence that any player has been avoiding tax and Rangers being complicit in offering them a scheme that avoided the paying of tax then are they not entitled to assume that every player and/or employee was part of such a scheme. The onus would then be on Rangers to prove that either the scheme was not illegal and/or the correct level of tax was collected and forwarded to HMRC.

  6. Adam says:

    Rangers, as do Celtic, NEED Champions League money to break even. FACT

  7. Adam says:

    Just a point of correction. It was MIH who set up and operated the EBTs. Rangers were just a unassuming victim who may very well end up suffering the consequence of ignorance 😦

  8. Lord Wobbly says:

    As has been discussed previously, is it not the case that the Rangers board would have either known about the EBTs and how they were being used (and were therefore complicit) or they should have known but didn’t (and were therefore negligent in their duties…..and I believe ignorance is no excuse).

  9. Boab says:

    LOL

    Yes, very good.

    I’m assuming you are being ironic there.

  10. Boab says:

    Sorry, wrong place.

  11. Ian Ferguson says:

    Adam,

    That is nonsense!

    The PEOPLE who Owned, Controlled & PROFITED from RFC acted ILLEGALLY in the opinion of HMRC. Rangers benefited from this.

    The LAPTOP have thrown a blanket over it & have been less than forthcoming with any Truthful info & have pushed a line of BULLSH*T that any spin doctor would be proud of. Rangers have benefited from this also.

    Poor Officials have helped RFC gain TITLES & CUPS they should NOT have won & this season the SFA decisions have reached a NEW LOW, Rangers players & staff have got off with “MURDER” The SFA is not fit for purpose & Rangers have GREATLY benefited from this.

    The Police, Gov.& SFA have ignored blatent ILLEGAL singing of Racist/Fascist songs by Rangers supporters… & Rangers have been saved from CLOSURE by this.

    AYE, Rangers have been ill done by… MY ARSE.

    The Truth is Rangers supporters have NEVER been in a position where the rules WILL apply when it doesn’t suit them.

    That is why they can’t believe there is any chance of this case being carried through to a HMRC win.

    It is also why they believe they are DEBT FREE.

  12. Kip Kane says:

    Well said Ian Ferguson.The truth is that they are getting away with it because people cover it up.That’s what they’re good at.Covering their work.

  13. Lord Wobbly says:

    in case this goes astray, I’m replying to Kip Kane 15/05/2011 at 2:20am.

    Presumably the FTT will determine how well they covered their tracks (if indeed any wrong doing is proven….. just trying to cover mine there!).

    Incidently, do we know if Rangers books show a purchase of a large number of black bin bags? Or did anyone notice an increase in activity around the 5th of November?

  14. Weefatbhoy says:

    Ian, Gr8 post m8………….

  15. me 2 says:

    Well another tainted league won by Rangers, will wait and see what transpires over the next few months regarding this case, should be fun times ahead

  16. Gary says:

    Please leave your paranoia at the door next time you come in cheers

  17. Adam says:

    LMAO @ Ian Ferguson.

    The blog was going fairly well with decent debate on unclear points, then you lowered the tones with sheer paranoid drivel.

  18. Adam says:

    ROFL @ Ian Ferguson.

    The blog was going fairly well with decent debate on unclear points, then you lowered the tones with sheer paranoid drivel.

  19. Adam says:

    I dont know where posts go on here, but they never seem to go in the right place. LOL

  20. Boab says:

    No the concept of guilty until proven innocent runs totally contrary to our legal system, whether is be Scotland or England.

    However this is not a Court case, this is an appeal against an assessment, at the behest of Rangers, not HMRC.

    HMRC are entitled to examine records and if they think tax has been underpaid raise an assessment (bill) for the unpaid tax. The taxpayers is also perfectly entitled to appeal against that assessment if they disagree with it.

    That is all that has happened here as far as I am aware. What is going on is an entirely civil process, not to do with guilt or innocence. Indeed it matters not one jot at this stage whether anyone thought they were doing anything wrong or not. The simple question is this, did they pay the right amount of tax or not. Neither is the interest a penalty, it is simple commercial restitution. Any civil penalties will be dealt with later, if the tribunal upholds the assessment.

  21. cp1888 says:

    Other than a comment about getting away with MURDER, which i’d assume was not meant literally, I don’t see where you’re problem with Ian lies. Unless of course you’re getting that sinking feeling…?

    Out of interest, are you rolling on the floor or just laughing your ass off?

  22. cp1888 says:

    *your*

  23. Ian Ferguson says:

    Gary, Just because you don’t like what I have to say doesn’t make me paranoid, everything I have posted is FACTUAL..

    Try posting an answer explaining where I have got the wrong end of the stick or have made a mistake.

    The old DENY & DEFLECT doesn’t work anymore. We KNOW!

  24. Just a point of correction. It was MIH who set up and operated the EBTs. Rangers were just a unassuming victim who may very well end up suffering the consequence of ignorance

    Adam,
    The truth is that this is bollocks.
    Firstly, it is a duty of every company director to assess the legality and appropriateness of the company’s tax strategy. These are fiduciary responsibilities and cannot be assigned to anyone else. The directors should have had the integrity of Hugh Adam and resign. Even better would have been to expose the risks being taken by their fellow directors.

    Secondly, there is not a director of Rangers Fc who did not know about the EBT scheme. Many of them even particpated. (You will be surprised at a few of the names).

    Let me just say that I believe that the documentary evidence will show not only an awareness of the EBT scheme, but a detailed understanding of its illegality and the steps that needed to be taken to keep aspects of the way Rangers were using the scheme a secret.

    Additionally, your contention that MIH operated the scheme needs a bit of clarification. The scheme was administered by an individual who is an MIH employee. However, that individual was empowered to act for Rangers FC by the board of Rangers FC.
    To cast Rangers as a victim of this scam is absurd. How many points per season were gained by the extra salary or players afforded by the tax fraud?

  25. Jonathan says:

    RTC, a Hearts fan on a Hearts board claiming to work for the HMRC seems fairly confident of winning the case against Rangers. I don’t know about the ins and outs of the case but he makes it clear that HMRC are looking for a big scalp in the footballing world and they’ve firmly set their sights on Rangers. I’ll post a link once I find the O.P.

  26. Ian Ferguson says:

    What on a SHORT TERM CONTRACT?

  27. Boab says:

    It’s not about harming the case, it’s about identifying it. As I understand it the Tribunal have agreed to anonymity, they can hardly do that and at the same time allow news about it to get out.

    Just my understanding.

  28. Ian Ferguson says:

    Adam, Please explain what is drivel or paranoia?

    As I have already said EVERYTHING I have posted is, as far as I know FACTUAL & ACCURATTE.

    If I am wrong please explain where & WHY!

    If you can’t, do me a favour & post on the DR where “THEY’RE PARANOID” is the norm for the REPORTERS never mind the numpties who believe it.

    THE WINDS OF CHANGE ARE BLOWIN’ Your corrupt ways are going… It MAY TAKE A WHILE but you are being found out BIG TIME.

  29. Adam says:

    Your paranoid ramblings about officials handing cups and trophies to Rangers warrants no response. You say lack of action on songs has saved Rangers from closure, I therefore assume you believe all clubs in the SPL have been afforded the same pleasure given that every single club, without exception, sings naughty songs, although before anyone starts, i am well aware we are top of the pile in naughtiness. And i dont have a problem readily admitting that.

    As for what Rangers were doing being illegal. What factual evidence do you have of this ? If it is illegal, why is legal action not been taken. If the tribunal find in HMRC favour then worse case scenario, Rangers have been caught operating a loop-hole identified to them by so called Tax Experts who have clearly given them a bum steer.

    The only legal action that will come of it is one where Rangers take the tax advisors, and possibly MIH (watch this space) to Court.

  30. Boab says:

    Abusing the tax system is not a “loophole”, no matter what you may think.

    As I have said elsewhere good tax managers find loopholes and use them. The misuse of EBTs is an avoidance scheme, not a loophole.

    It’s quite simple really. Payments into, and out of, EBTs is not and never was intended to be used to fund contractual obligations. That would appear to be exactly what Rangers did, paid it’s staff via EBTs in order to avoid paying tax and by doing so avoid paying around 40% of what they should have paid.

    That is not a loophole, it is stealing tax and using it to finance your business. Well it is in the view of Her Majesty’s Revenue and Customs.

  31. Ian Ferguson says:

    Adam PLEASE respond with a factual denial,

    The SFA are so biased they are NOT fit for purpose, their decisions in favour of RFC have gone beyond the pale, this year the Disciplinary Committee excelled itself. Please LOGICALLY explain their decisions in favour of RFC.

    Have Officials not been found to be guilty of ” Honest mistakes” which have caused Celtic to lose League Titles & Dundee United a Cup? Have some not resigned over LIES? Don’t take my word go check it out.

    On the singing of songs Please DO NOT minimise it! I said the Gov, Police & Football Authorities have favoured RFC by their DENIAL & INACTION.

    RFC supporters have been found GUILTY of RACIST/FASCIST chants, again NO ACTION taken against them by the BIASED & FLAWED SFA & SPL… Who are NOT FIT FOR PURPOSE. It took UEFA to act against them & even then it has been half a dozen wrist slaps, so YES, if the SFA had been impartial & had done their job properly the dossier they would have presented to the enquiry along with the multi arrests by a police Force determined to stamp out RACISM would have closed Ibrox. Your support is not “NAUGHTY” it is RANCID.

    RFC have broken the LAW in their actions, HMRC are now tackling this, no charges have been made because it is a Civil case,

    RFC Board Members are CULPABLE, Sue MIH Why? Your BOARD approved the scheme, the RESPONSIBILITY rests on RFC. Tax Advisors? No chance their arses will be well covered.

    Do you know what?

    I think I have been quite LUCID & ACCURATE in my posts… MAYBE IT IS YOU WHO IS PARONOID..

    Maybe you have got off with replies NOT being PUBLISHED before so the Paranoi remark is the last one seen?

    OH THE TIMES THEY ARE A CHANGIN’

    If you are going to answer PLEASE give me a FACT.

  32. Ed H says:

    RTC, apologies if this has been resolved above. but the thread has become a bit confusing.

    Has the tribunal actually finished ?
    If it hasn’t when would it recommence ? Immediately or in several months ?

  33. peter lamb says:

    i think this is one of the problems with the media in not explaining the case properly. its not using the EBTs that is wrong its the misuse of EBTs that is wrong which is what HMRC claim rangers are doing, and then the common consensuses from rangers fans is that they have been using a loophole
    not breaking the law.
    as much as i believe they have been doing something which is wrong i cant help feeling that they are going to get away with it!!!

  34. tomtom says:

    In a nutshell is there, or can there be any possible scenario, whereby Rangers can claim that they were using EBT’s as anything other than as a tax avoidance scheme?

    If it walks like a duck etc!

  35. Boab says:

    That is exactky what they are claiming.

    However what they thought or believed is irrelevant, What advice they took and from whom is irrelevant. The simple question is this, did they pay the correct tax at the correct time. That is what this tribunal is considering.

    HMRC say no, hence the bill. Rangers disagree, hence the appeal.

    The panel will decide who is right. Their ruling will be based on the law and what Rangers did. Whether they thought they were behaving properly or not matters not one jot.

  36. peter lamb says:

    i suppose it would only matter if it was to go against rangers. then it would matter if they thought they where behaving properly as it would effect the penalty that would be added on top of the bill and interest!!?
    do you know if the interest will be decided in this FTT or will it be decided in the hearing to determine the penalty charge?

  37. Paul Mac says:

    Ignorance Adam, is not a defence that can be used in this situation. whether you knew or not, as a Director the buck stops with you.

    I remember attending a course, and part of that course covered Corportae manslaughter. taking a look around the assembled directors faces when it became apparent what their responsibilities as a director was and the legal cosequences they faced, if a member of staff was to die as a direct consequence of comapny negligence.

    There are those I am sure, who hold a directorship who do not fully understand the posoition and its legal responsibilities. Best they get to know dam quick.

    However with rangers it is now to late, the wheels are in motion, the roulette wheel is spinning, it will land on a number, but which one.

  38. Boab says:

    There is no decision on the interest, if there is back tax to be paid then interest also has to be paid. t is based on commercial rates over the period

  39. peter lamb says:

    the reason i ask about interest is that goldman and sachs got away without paying interest i know it was a different issue although still to do with EBTs.
    would it only be HMRC and their lawyers who would decide if they wanted rangers to pay the interest? ie rangers not able to appeal the amount of interest and if its has to be paid?

  40. Adam says:

    You are moving the thread to a whole new level of whitabootery and paranoia diatribe now Ian. SFA decisions in Rangers favour you say ???? Which ones.

    The one where they banned McGregor for 2 games for a petulant non contact kick whist allowing Ian Black off with worse all season (see v Jelavic x 2, v Hibs and v Celtic the other night)

    What about the decision not to give Diouf a 2 match Scottish Cup ban but fine him instead. hmmmm. Some would say they knew he wasnt going to be in Scotland next season to serve the Scottish Cup ban so they moved the goalposts and hit him in the pocket. If i was paranoid, i would be saying they had an agenda.

    But lets move onto the topic of giving penalties then changing your mind. hmmm. Well one referee got sacked for taking advice from his linesman, whereas another referee gave a penalty, then miracously within 10 seconds, changed his mind and booked a player for diving. And all this without speaking to a single soul.

    Remember one thing. The main culprit at Tannadice was the linesman. In his opinion, he saw it was NOT a penalty and he chose not to tell the referee. In fact rather than telling the referee, he ran and took up position quite happily allowing a team to win a penalty HE DID NOT THINK they deserved. What McDonald done after that is unforgiveable. He was guilty of trying to cover his officials ass, and he could not be trusted anymore. He had to go. And deservedly so.

    Celtic never lost the league due to honest mistakes. Celtic lost the league because when it mattered in certain games, see 3 draws at home during December and Inverness Caley, the team was not up for it. I go to both Ibrox and Cetic Park as a host for hospitality and I can 100% assure you that there is howls of derision at the officials performances from start to finish at both grounds. The trouble is SOME PEOPLE only remember the ones that go against them (See United and Broadfoot penalties) and forget the ones that go for them (see Cup Final and Stokes penalties)

    I admitted the songs were bad. I admitted we are the worst in the League. It doesnt excuse others. It doesnt excuse the BILE AND HATRED we witnessed and heard at Tynecastle the other night. All 90 minutes of it. This isnt a “Aye but youse do it as well” its more a “Before you point 5 fingers, make sure there isnt 3 pointing back” I was glad of the UEFA sanctions. I feel there is a wind of change now and i hope and pray we get rid of these songs for good. Dont class me or all Gers fans the same as the idiots, just as i wont group all Celtic fans as Terrorist supporting sectarian idiots on the strength of Wednesday night.

    You keep asking me for FACTS then you state “RFC have broken the LAW” – I presume you are aware that no results have been published. No decision has been reached. No action has been taken. Is this another Allan McGregor situation in that you are Guilty in SOME PEOPLES eyes no matter the truth or outcome. hmmmmmm.

    Your attacks are starting to sound a little desperate Ian. It is you who should stick to FACTS. Opinions on SFA and what MIGHT happen in a case are not FACTS. tsk.

  41. Boab says:

    Interest, at commercial rates, is simply repaying the amount due. I am not aware of any appeal procedure. I cannot even understand why there would be. If the tax is due from 10 years ago then paying interest is simply a way of getting the correct amount of tax back.

    I have no idea what the position was with Goldman Sachs, However a treasury select committee is calling for HMRC to release details in relation to this “deal” they reached with the bank.

  42. peter lamb says:

    i agree it makes sense that they should have to pay interest and i also hope HMRC are as aggressive as they can be. if its true that they want a corpse in the street to warn off others then would that not mean they will be trying to get the maximum interest and penalty? we can only hope but like i said before i cant help but think theyre going to get away with this!!

  43. DavyLaw says:

    Entirely predictable boak-inducing love-in with the media at the moment. Same people who couldn’t and can’t report the tax case properly. I think we’ll wait and see who is bought and sold over the next few months. No prizes for guessing what will decide that. Question remains, prompted by the title of this thread – why spend when you do not know the liability?

  44. DavyLaw says:

    Getting quite difficult to follow this now. Can we have a bit of clarity in terms of comments posted? Otherwise we’re all over the place. Thanks.

  45. Mike says:

    Maybe better to get another blog entry up RTC if you have the time, if not re-post this one and get the comments sorted out a bit better!

    I appreciate wordpress is a pain. Cheers

  46. foolmarks says:

    ..a couple of dumb questions:

    1. If players were getting “loans” from the EBTs, wouldn’t there be terms for paying these loans back?

    2. If it wasn’t RFC that acted as EBT trust administrators to approve the loan applications then who was?

  47. Gwared says:

    RTC,
    Given recent events, is it not about time for another blog to cheer us all up?.

  48. Gwared says:

    RTC,
    given recent events, is it not time for a wee thought provoking blog to cheer us all up.

  49. Gwared says:

    Sorry folks but the comments on my page are all over the place, how do I fix this?.

  50. Boab says:

    I believe these were “loans” in name only as that is the way money is taken out of the EBT. There doesn’t have to be an agreement on how they will be repaid, or any interest charged.

    Most likely professional trustees I would have thought.

    Out of interest here is the ruling of the Tribunal in the Aberdeen Asset Management case. It gives an idea of how these things work and the detail they go into. They even go into whether or not the witnesses were considered credible

    http://www.google.co.uk/url?sa=t&source=web&cd=9&sqi=2&ved=0CGQQFjAI&url=http%3A%2F%2Fwww.law-now.com%2Fcmck%2Fpdfs%2Fnonsecured%2Faberdeenasset.pdf&rct=j&q=ebt%20trustees&ei=l0LRTYvTF4nesgbszey4Cw&usg=AFQjCNH6JdHFnuMmNNL7-OVBgCrK_4rZbQ&cad=rja

    Section 6 outlines the scheme and how it was operated.

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