Rangers players may have to pick up bill for ex-owners’ tax scheme

Go to the profile of The Brief team
Jul 06, 2017
Recommend 0 Comment

The Glasgow football club’s former owners had used loans to employee benefit trusts to pay players

Jeff Holmes/PA

Former Rangers footballers could be hit with massive tax bills because of a Supreme Court ruling yesterday, lawyers predicted.

The country’s highest court backed arguments from HM Revenue and Customs in a dispute use of employee benefit trusts by the owners of the Glasgow club. Tax officials said that loans made for nine years until 2010 should have been treated as employee earnings subject to national insurance and PAYE contributions. The judges, led by the court’s president, Lord Neuberger of Abbotsbury, and including its deputy president, Baroness Hale of Richmond, agreed. 

However, lawyers pointed out that since the club went into liquidation in 2012 and is now under new ownership, HMRC might move the tax liability to the players. “If that is successful,” said Andrew Watters, a partner at the national law firm Irwin Mitchell, “some may struggle to pay large tax bills coming years after their high-paying playing days are over.”

Watters went on to predict that some of those players might “consider suing agents and advisers for the advice provided”.

More broadly, lawyers suggested that the ruling meant that companies using similar tax schemes will face court challenges, and the probability of large bills. 

Watters said the ruling was a potential “holy grail” for the tax authorities as it is now arguable that they will be allowed to assess a business’s legal structures and reclassify tax consequences as part of the attempt to crack down on avoidance schemes. “The question,” said the lawyer, “is what legal structures can be looked through. Rangers supporters will not be the only ones shouting that the rules of the game have been changed.”

Go to the profile of The Brief team

The Brief team

Articles by The Brief's team of reporters and daily guest columnists

No comments yet.