July 7 – This week’s Supreme Court ruling against Rangers football club could have a damaging knock-on effect, say experts, with scores of other clubs and players – Scottish and English – potentially forced to hand over millions of pounds of unpaid tax.
On Wednesday, The Supreme Court ruled in favour of HM Revenue and Customs (HMRC), Britain’s tax authority, in a long-running dispute that focussed on more than £47 million being paid to Rangers players, managers and directors between 2001 and 2010 in tax-free loans. HMRC argued successfully that the payments were earnings and should be taxable.
Instead of paying players a salary – which is subject to tax being paid – Rangers put millions of pounds into trusts known in the UK as Employee Benefit Trusts or EBTs which were then taken as tax-free loans.
Other clubs are reported to have used similar schemes but Britain’s tax authorities can now demand receipt of unpaid tax without going to court.
An HMRC spokesman told the BBC that more than the tax affairs of 67 players, 39 clubs and 13 agents are now being looked at “concerning a range of issues, including image rights abuse”.
David Richardson, director general of HMRC’s Customer Compliance Group, said: “The decision has wide-ranging implications for other avoidance cases and we encourage anyone who’s tried to avoid tax on their earnings to now agree with us the tax owed.”
Rangers won five league titles between the period concerned and although it is unlikely they would stripped of those triumphs, a raft of former Rangers players could face huge bills.
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