RANGERS FOOTBALL CLUB has won an appeal against a tax bill over its use of employee benefit trusts (EBTs) at the first-tier tribunal.
The corporate entity that formerly housed Rangers FC, now in liquidation, had the scheme in place between 2001 and 2010 to pay £47.65m to players and staff in tax-free loans.
The arrangement was challenged by HM Revenue & Customs, which said it was illegal, but Rangers disputed the bill and the tribunal has ruled the payments were loans that can be repaid.
The ruling, endorsed by two judges with one dissenting, said: "The majority view reflects the argument that the controversial monies received by the employees were not paid to them as their absolute entitlement.
"The legal effect of the trust/loan structure is sufficient to preclude this. Thus the payments are loans, not earnings, and so are recoverable from the employee or his estate."
HMRC, however, is understood to be considering an appeal, while liquidators BDO said it is reviewing the judgment closely.
A spokesman for HMRC said it was "disappointed to have lost at this stage of the court process".
He continued: "The decision was not unanimous and the diligence of HMRC investigators was acknowledged by the whole tribunal.
"HMRC is committed to tackling avoidance and it is right that we challenge the type of avoidance seen in this case."
In a statement, Murray International Holdings, which was majority shareholders of the oldco, said: "We are satisfied that the tax tribunal has now published its widely awaited decision and note the contents thereof.
"We are pleased with the judgment which leaves minimal tax liability and overwhelmingly supports the views collectively and consistently held by our advisors, legal counsel and MIH itself.
"This has been an exceptionally long, difficult and expensive process involving not just the tax tribunal but also significant efforts to resolve the matter with senior HMRC officials on a commercially sensible basis for all parties.
"We will therefore review the detailed content of the decision with our advisors and legal counsel to ascertain what action, if any, is now required by MIH."
BDO added: "The joint interim liquidators are reviewing the tribunal's decision closely so as to determine the impact on the liquidation of RFC 2012 Plc."
Sign up for Financial Director email alerts
Please enter your email below to receive your profile link
Search by job title, salary, or location - we only list senior financial roles
Financial Director has launched a new flagship one-day conference for senior finance professionals
Join Financial Director and Concur to discuss how the cloud and mobile is transforming the way companies manage employee expenses
One of the UK's most well-respected bosses talks about retail, governance, reputation, tax, his career - and that of CFOs – in a wide-ranging interview...
Send to a friend