The Case: Q & A

With just a single day left of Rangers’ First Tier Tribunal (Tax) dealing with the Employee Benefits Trust scheme that has brought Rangers to the edge of insolvency, I notice a surge of posts from people asking basic questions about what is going on. My first advice for anyone trying to understand what Rangers have done would be to read the following blog posts:

With apologies to our old lags who will know most of what follows already, I will attempt to address some other commonly asked questions below:

How many tax cases are there?

Rangers have several outstanding tax issues currently. Most of the publicity has been focused on the “Big Case” dealing with Rangers’ use of a trust to pay employees’ salaries and bonuses without paying income tax or National Insurance. There is also the “Wee Case” which covers an innocent sounding Discounted Options scheme. This involved stuffing cash into the bank accounts of offshore companies and granting Rangers players options to buy shares in the firm. The players would end up with shares (for which they effectively paid very little) in a company whose only asset was the cash in the bank. The players could then could then help themselves to the money without paying UK taxes.

There are more tax issues?

Currently, the biggest other issue Rangers face in their tax affairs is simply failing to keep up with remittances on time. Every employer is required to submit the taxes deducted from employees’ salaries (and VAT receipts) promptly and on a set schedule. Rangers made the late payment of creditors, including HMRC, into an official policy before the takeover even occurred according to documents in my possession. Whyte seems to have embraced this policy of late payment as his own. We will later see how this policy will likely have artificially boosted Rangers’ cash and reported Net Debt in their 2011 Annual Report.

What are Rangers chances of winning the Big Tax Case?

Low, but not zero. Their chances are not zero simply because no legal procedure involves a certain outcome. However, the case against Rangers is overwhelming. A newspaper journalist, whose career has been built entirely upon relaying information that Rangers employees (past and present) want to see in the media, claims to have seen side-contracts effectively telling Rangers players that loans from the EBT do not have to be repaid. That would make a conclusive case against Rangers in its own right. However, it could be worse for Rangers. If documentation exists that would prove that Rangers’ executives knew that what the club was doing was illegal, that would be bad news. If any Rangers executives took “extraordinary steps” to try to disguise the true nature of the EBT scam, that would be bad news too.

How much could the Big Case cost Rangers?

The Martin Bain papers stated a figure of £49m. However, Bain’s legal representative may have mangled this issue. It looks to me that the Bain Papers only referenced the assessments for underpayment and not the penalty. The bills are for: underpaid PAYE; underpaid National Insurance; interest (compounding and going back 10 years); and a penalty. ( At Rangers’ request, the penalty is not part of the current tribunal. If Rangers lose the underlying case, the penalty assessment would be confirmed in a separate tribunal). The original assessments sent by HMRC were for amounts that assumed that contributions to the EBT were made post-tax. This argument stands virtually no chance of succeeding and the amounts paid to the trust will be viewed a pre-tax (i.e. gross salary) amounts. I introduced this issue in one of the responses to an early blog and it resulted in much confusion! Therefore, it is likely that the final tax bills due will be very close to £24m in underpayment and £12m in interest. The penalty amount, given the documentation trail demonstrating executive knowledge that their actions were illegal and steps taken to disguise the illegal nature of the payments, will likely be confirmed at about £12-18m.

When will we know the result?

There is no set schedule for the judges to post their findings. (It will be posted as an anonymised entry on the tribunals service website. Rangers will not be named. However, you can be sure that I will help decode anything that is not clear). It is probable that we will learn the outcome sometime in March 2012. A little earlier is possible, as is the answer coming much later. All of this assumes that the FTT does indeed conclude on schedule next week.

Is it just Rangers who have been doing this?

No, but Rangers have been especially egregious / stupid in their use of the EBT. I can kill two birds with one stone by explaining this in terms of how the rest of the Murray group are affected. The current case is an appeal by a number of subsidiaries of Murray International Holdings Ltd. All of these companies used a variation of a similar scheme to have their staff withdraw money tax-free from The Murray Group Management Limited Remuneration Trust. (Rangers also used another trust named for themselves, but abandoned it several years ago, presumably to reduce administration costs. It should be clear that the trusts are not owned by the companies who contribute cash to them. They could have been called the Mickey-Mouse Trust for all of the relevance of the name).

There were differences in how Murray group executives from other divisions used the trust and how money was dispersed to players and executives at Rangers. In the case of Sir David Murray, he would have had no need to have a contract with himself. So he could just send a fax to the trust administrators requesting a loan of, say £100,000, and they might say “No. Just the £90,000 this time, Sir David.” Murray would understand what was happening i.e. the trustees have to prove their independence from MIH and Murray himself. However, what footballer would agree to seemingly arbitrary payments? They would wonder if they were ever going to get paid in full and fear that someone will ask for these loans to be repaid. So, there would be a need for a side-contract explaining that this was really their real salary and to not worry about repayment. Interestingly, claims that they also received indemnification from Rangers about future tax bills could open another can of worms. A contract to engage in illegal behaviour is not enforceable. So depending upon the wording, players may find themselves engaged in a legal mess. However, all of that would be long after the dispute between HMRC and Rangers had been resolved. It is the employer who bears the responsibility for deducting and paying payroll taxes.

The point above is that MIH executives (especially Murray) may have been using the EBT within the limits established by the Dextra case i.e. HMRC failed to prove that the loans were disguised remuneration when there was no contract or promise of payment for any particular purpose. So Murray’s own very substantial withdrawals from the trust might be deemed legal while those of Rangers’ players and executives will likely be found to be illegal. This point opens an interesting question about the legal services for Rangers’ appeal.

The contract that sold Rangers to Craig Whyte explicitly states that Rangers do not have to contribute any money to the legal costs for the current tribunal. Rangers cannot communicate directly with HMRC on this case and Rangers have to accept the legal counsel appointed by the Murray group. A generous offering from Murray? Or more likely that Murray sees financial advantage in paying the legal costs for a business which he no longer owns? Most people have a hardwired tendency to want to find a middle-ground in any dispute, We all would like to be thought of as being reasonable. Tribunal judges are unlikely to be much different. Therefore, with the Rangers issue looking like a lost cause and the Murray group having a fighting chance of ducking a large part of their bills, there could be a tactical element in keeping Rangers as part of the wider Murray case. It provides the judges with a target for venting their righteous vengeance on behalf of the state and for them to demonstrate their fairness and balance by letting Murray off lighter than might otherwise have been the case had the Murray group gone into the latter stages alone. Whyte? Winning the tax case is unlikely to have ever been a central part of his plans.

So back to the question: Who else has been doing this? Is this just a test case?

EBTs became quite widespread in the 2000s. However, almost all of the usage was for executives operating without written contracts. The Rangers case provides little or no utility in collecting taxes from these firms. There are a number of other clubs in England who will have had similar arrangements, but none were into it for as long or for as much as Rangers. It will have been the scale of Rangers’ scam and their duplicity that has put the club in the cross-hairs. The claims that HMRC’s only interest in this case will be in setting a precedent and that they will just forget about enforcing any decision will be proven false in time. Likewise, the idea that after the decision, Hector and Whyte will gather for a sup on the Loving Cup and negotiate a sensible settlement like gentlemen. There is no post-FTT stage for negotiation. I am sure that Whyte will try. I would be absolutely certain that he has been trying to negotiate a deal in recent weeks. However, this case is too high profile for HMRC to make a humiliating climbdown now.

Whether insolvency results in HMRC collecting anything or whether Rangers bounce back stronger than ever will be irrelevant to the fact that should they lose the case, The Rangers Football Club plc will be in very serious trouble.

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.

3,213 Responses to The Case: Q & A

  1. Adam says:

    Spot on Hugh.

  2. Brenda says:

    I hear what the unpaid staff are saying is that hearsay or what??? 🙂

  3. Hugh McEwan says:

    tomtom says:
    25/11/2011 at 4:22 pm
    Mark Dickson says:
    25/11/2011 at 4:19 pm
    From Durrants comments about replacing players to be sold and Aluko signing on would it be reasonable to assume there is just about enough wonga to make it through to the January transfer window and that some deals are already in the pipeline that will raise enough ready cash to keep the good ship afloat at least until a FTT decision is made known? Wavetower then have a further 90 days (3 months) to pull the plug according to the take-over circular

    Surely once the decision is know HMRC will seek immediate payment.


    7 Days to pay, then immediate petition to wind up would be the norm.

  4. Adam says:

    My last response was to the insolvency statement btw.

  5. Paul Mac says:

    Depends Brenda? What are the allegedly unpaid staff…allegedly saying?

  6. StevieBC says:

    From the Evening Times;
    “From now until January we will be looking around in case anything tragic happens and we lose some of our star players,” said Durrant.
    Is this now RFC starting to actively manage the MSM stooges to prepare the way for the bad news to come ?

  7. Corsica says:

    Adam on 25/11/2011 at 4:37 pm said:

    Sorry Adam, a condition survey (which is what you seem to be referring to) would make little difference to value unless it showed significant defects, etc. Valuation here would really look at land values and the like to get a comparison (I won’t bore everyone with technical details) but your basic point is valid. If people are that interested, I will ask one of my guys to dig around and come back ASAP on realistic values historically since 1997.

  8. Lord Wobbly says:

    Vlad has valued the Hearts land at £25m and the players at £25m. FACT!

    So it must be true 😀

  9. Adam says:

    Lol wobbly. 🙂

  10. Brenda says:

    The alleged unpaid staff are allegedly saying they have not been paid!!! tweets on twitter and another source which for the moment has to be kept anonymous for reasons that will become clear at a later date 🙂

  11. abrahamtoast says:

    I am rather disturbed, as I fond myself agreeing with quite a lot which Adam has posted recently.

    He can be a sensible and valuable poster when he cuts down on the trolling 🙂

    However, it would appear “dave” is beyond redemption. Troll or idiot? I know what I think.

  12. abrahamtoast says:

    *find, not fond. Stupid fingers!!

  13. thesnooper says:

    Dave @ 4.56

    Dave to say a Adam has a company is hearsay. He also listed three possibility’s the other day to a statement i made. One was that i was telling lies, he then found the article which proved i wasn’t.

    The fact Adam is on here constantly tells me he doesn’t run a successful company as he stated. .. . but thats just hearsay.

    He certainly finds the time to be on here al the time defending all things Rangers and trying to dismiss other posters, a man on a mission you could say. It’s surprising that he gets the respect off some but that may be down to their good manners.

  14. StevieBC says:

    abrahamtoast says:
    25/11/2011 at 5:03 pm
    I am rather disturbed…
    Don’t worry, I think we’re all a bit disturbed to be spending so much time on this website ! 🙂

  15. Veritas says:

    Been away from this site for a week or so. When was the last time RTC posted – anything?

  16. andy says:

    StevieBC says:
    25/11/2011 at 4:57 pm
    From the Evening Times;
    “From now until January we will be looking around in case anything tragic happens and we lose some of our star players,” said Durrant.

    sounds like he is expecting the bus to crash on the way to a game

  17. Veritas says:

    Perhaps RTC could post ‘hello’ – just to let us know he is okay?

  18. jean says:

    Brenda says:
    25/11/2011 at 4:39 pm

    There’s a first! lollll 🙂

  19. Corsica says:

    Paul Mac says:

    25/11/2011 at 4:28 pm

    The value of Ibrox increase over th eyears seem appeared to match the debt increase at MIH…over the same period



    Curioser and curioser as Lewis Carroll might have said. Do you have figures to hand?

  20. Adam says:

    thesnooper says:
    25/11/2011 at 5:05 pm

    He certainly finds the time to be on here al the time defending all things Rangers and trying to dismiss other posters,

    You do yourself no favours by lying you know.

  21. thesnooper says:


  22. Veritas says:

    Catching up on recent posts and notice Adam is still being targeted for the ‘treatment’. Very sad. But indicative of the deep-seated bigotry that still prevails among many who follow the Old Firm. Without Adam, and others who rightfully question some ludicrous statements, this blog would merely be Pravda and serve no useful purpose. Other than to perpetuate the delusional dreams of those who can’t wait to see Rangers somehow disappear. Get real. It won’t happen. Only in your fantasies. Regardless of the outcome of the big tax case there will be a Rangers side playing at Ibrox for a long time yet. Rightly or wrongly.

  23. thesnooper says:

    Let’s just say his refusal to admit when he’s wrong and his manners when debating points leave alot to be desired, We’ll leave it at that and get back on track.

  24. Adam says:

    In the name of the wee man. 🙂

  25. timtim says:

    wtf does abstanciate mean ?
    apologies from a non millionaire with an outstanding phone bill

  26. Moi says:

    I lurk on quite a few sites (innocently) but only on here I am entertained and educated in equal measures by the usual crew and in the main the standard of posts is extremely high.

    One thing I have noticed though is that sometimes it’s good to have a pet troll for entertainment value. (@Dave, ffs google ‘their’) just don’t feed them too often!

    Adam, keep fighting your corner.

  27. Adam says:

    thesnooper says:
    25/11/2011 at 5:56 pm
    Let’s just say his refusal to admit when he’s wrong and his manners when debating points leave alot to be desired, We’ll leave it at that and get back on track.
    Probably best we do before we debate it then when someone else points out you are wrong, you agree with them i was right all along………just like last night. 🙂

  28. Adam says:

    🙂 timtim

  29. Moi says:

    timtim says:
    25/11/2011 at 6:18 pm
    wtf does abstanciate mean ?
    apologies from a non millionaire with an outstanding phone bill

    timtim, google is your friend mate.

  30. timtim says:


    Word not found in the Dictionary and Encyclopedia.

    is this hearsay or fact ?

  31. Adam says:

    timtim says:
    25/11/2011 at 6:31 pm

    Word not found in the Dictionary and Encyclopedia.

    is this hearsay or fact ?

    I think you are showing your pedudices here timtim. 😉

  32. Fritz Agrandoldteam says:

    Moi says:
    25/11/2011 at 6:18 pm

    Never throw (a) pet troll on a fire fight……….

  33. Adam says:

    You might be right timtim. Im away to stick a euromillions on to try and get rid of my debt now. 😉

  34. Moi says:

    Same as that Adam but when I win I’m gonna buy the ground next to Davey boys mansion and build a temple in honour of the articulate. 😉

  35. Veritas says:

    For ‘millionaire’ Dave – having loadsamoney is not something everyone craves. Style, class, intelligence, education and compassion are just some of the more endearing qualities considered preferable by many. And in ever-growing numbers – hence the popularity of the Occupy movement worldwide. Most millionaires I know are ruthless, conniving parasites bereft of saving graces. Craig Whyte, for example? These vulgarians produce no wealth and live off the labour of others. Not the type I’d want at my dinner parties…

  36. curious onlooker says:

    Dave has a street cleaning business in Peckham where his mates call him Trigger !

    Easy to get confused with Dave, ain´t it Trig !

  37. curious onlooker says:

    Veritas says:
    25/11/2011 at 5:25 pm
    Perhaps RTC could post ‘hello’ – just to let us know he is okay?
    It´s a bit like as a kid, you get let out for break at 10.20am expecting the bell to go at 10.35 but it´s now 8pm at night, dark, you cannae see the ball, your starving and can see a line of policemen with torches approaching.

    As I posted the other day the rumours of wee blue men carting off RTC in a flying saucer are being given the same credence as those that said Daniel Mistakovitch had controlled a ball with his first touch at todays training.

  38. StevieBC says:

    I think we must be suffering ‘blog fatigue’, in our elongated wait for RTC’s next Post.

    One suggestion I would make meantime is that the uploading of any personal/background information of a contributor is generally neither relevant nor helpful.

    The only personal information – IMO – which could be helpful is if a contributor wants to state he/she is a lawyer, accountant, surveyor, estate agent, or whatever – which is relevant to their Comments. However, others can still choose to agree with their Comment or not.

    My eyes start to glaze over when I see personal information in the Comments section – or am I being too sensitive ?

  39. Gwared says:

    You are bored like me, anyone know where RTC is? Trigger there and their are different! Nite.

  40. evens says:

    Veritas says:
    25/11/2011 at 5:47 pm
    Regardless of the outcome of the big tax case there will be a Rangers side playing at Ibrox for a long time yet.
    Just don’t tell anyone they’ll be playing in the Magner’s Celtic League. Guaranteed European football every season, mind. 🙂

  41. Brenda says:

    JEAN @ 5:29PM

    lol 🙂 WHERE IS RTC YES I’M SHOUTING haha off to partake in a few sherries play nice now 🙂

  42. Davythelotion says:

    Seems like the press are prepared for a sell-off at Crimbo. A player signs on and it costs him money? This is through the looking glass stuff!
    Why doesn’t every business operate on the ‘…take it aff ma neb!…’ approach to creditors?
    In any event the GEFMBB appears to be nearing his end game, no wonder Ally is giving the 2000 yard stare!

  43. Gwared says:

    I am in need of Employee’s please send you CV detailing how much you are prepared to pay!

  44. Veritas says:

    Has RTC left the building?

  45. Goosy says:

    Surely if some RFC players are being lined up for exit in Jan they wouldnt be risked for 90 mins prior to Xmas ?

    ( I exclude Broadfeet from this idea )

  46. thesnooper says:

    I think their friends in the media are dropping plenty hints to soften the blow for the brethren that Jelavic is away. . . . . .They will step this up in the coming weeks with the case being made for other strikers.

  47. Fritz Agrandoldteam says:

    “So, CW, I give Aberdeen £200,000, and you pay me £10,000 a month to play for Ra gers for six months?”

    “That’s right Sonny………….”

    Reminds me of this……..

  48. Lord Wobbly says:

    I was in Cargo on Fountainbridge (Edinburgh) tonight. They offer a cocktail called ‘Irish Car Bomb’.

    I’ll just let that sink in for a moment.


  49. Lord Wobbly says:

    Adam. You don’t need me to tell you to ignore Dave. I assume he’s been on the sauce. Most people on here will make their own thoughts clear. Some will want RFC to face armageddon, others (me) simply want them to pay a fair price. Some may even want them to escape scott free.

    Post away Adam. You will be challenged just as you challenge others. That’s what makes this blog the light in the darkness that it has become known for.

  50. Wallyjo says:

    FritzAgrandoldteam @12.00 am says:



    Now I understand what MBB means!

    Merchant Bloody Bankers!


    ( too many exclamation marks).

%d bloggers like this: