Appeal success for old Rangers
The oldco Rangers secured one of their most unexpected, but ultimately hollow, victories after it was announced they had effectively won the "big tax case" that undermined the final years of Sir David Murray's reign.
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A First Tier Tax Tribunal, which heard the club's appeal over a bill for the use of Employee Benefit Trusts over 29 days and last sat in January, finally delivered a majority verdict that allowed the appeal in principle and declared that the assessments of Her Majesty's Revenue and Customs (HMRC) be "reduced substantially".
Two of the three judges decreed that only some of the payments made to players through EBTs were taxable but that many of them could be described as loans, as the club had argued.
The decision comes too late to save oldco Rangers from being wound up and does not directly affect the current Ibrox regime.
The club was relaunched as a new corporate entity in June when the original company was consigned to liquidation.
Former Rangers owner Craig Whyte had stated the liability could have been as high as £75million, including interest and penalties, for payments made from 2001-10.
And although no final figure was revealed in the 145-page verdict, Murray International Holdings (MIH), the former majority shareholders of the soon-to-be-liquidated club, declared themselves vindicated after being left with what they described as "minimal tax liability".
HMRC admitted they had lost the hearing but refused to give in yet.
In a statement, two tribunal judges agreed with the club's outline case.
They stated: "The majority view reflects the argument that the controversial monies received by the employees were not paid to them as their absolute entitlement.
"Thus the payments are loans, not earnings."
A key paragraph in the 145-page findings read: "It was conceded that advances in favour of certain players are taxable and liable to NIC (National Insurance Contributions), and we have found that, in certain other limited instances, there may be a similar liability.
"To that extent the assessments should stand. In these circumstances we expect that it is sufficient that we allow the appeal in principle.
"Parties can no doubt settle the sums due for the limited number of cases mentioned without further reference to the tribunal."
MIH, who were majority shareholders until Whyte's takeover in May 2011, declared in a statement: "We are pleased with the judgement which leaves minimal tax liability and overwhelmingly supports the views collectively and consistently held by our advisers, legal counsel and MIH itself."
HMRC can challenge the decision, which was supported by two of the judges, Kenneth Mure QC and Scott Rae, but opposed by the other, Dr Heidi Poon.
A statement read: "We are disappointed that we have lost this stage of the court process and we are considering an appeal.
"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."
The tax authority refused to comment on whether former Rangers players and staff members might be liable for taxable amounts.
Neil Patey, football finance expert at Ernst & Young, told Press Association Sport: "It would depend upon the individual circumstances of each player, what they've done on their tax returns.
"There is not a clear, uncomplicated route in terms of recovering money from the players. HMRC's primary (route) is to go after oldco for those monies."
MIH, who called for an investigation into the leaking of "sensitive information" surrounding the case, set up the trusts and the tribunal also considered payments to staff from four other companies controlled by Murray, although more than three-quarters of the £46.2million claimed by HMRC were the result of payments to Ibrox employees.
Although the result will have little effect on newco Rangers, it could impact on the Scottish Premier League investigation into undisclosed payments to players, which centres on EBTs.
One of the possible sanctions, should Rangers be found guilty, is the stripping of titles but a favourable tribunal verdict could put pressure on the independent commission to act leniently.
The three-man panel was due to begin hearing evidence last week but the case was postponed with no new date set.
A statement from the newco Rangers tonight read: "The judgment serves to further undermine the validity of the SPL commission into the use of EBTs.
"As we have said all along the SPL decision to press ahead with a commission was ill-timed and fundamentally misconceived."
Otherwise, the decision is only of major significance to Rangers fans in the way they view the financial collapse of the club.
While Murray's actions in setting up EBTs have been partially vindicated, many supporters will bemoan the fact he sold the club to Craig Whyte when it appears the tax liability might have been manageable.
Murray has claimed he was "duped" by Whyte, who bought the club for £1 in May 2011, paid off the £18million bank debt on the back of future season-ticket sales and failed to pay tax, a decision that led HMRC to force administration.