Rangers EBT kicked into touch

Source: HM Revenue & Customs | | 13/07/2017

The Supreme Court has ruled in favour of HMRC over a long running tax avoidance case against a former incarnation of Glasgow Rangers Football Club (now in liquidation). The case concerned a tax avoidance scheme under which the Club paid remuneration to their employees through a complex Employee Benefit Trusts and Sub-Trusts structure with a view to avoiding liability to Income Tax and Class 1 National Insurance contributions. This involved the payments of over £47m to players, managers and directors of the Football Club between 2001 and 2010.

HMRC has always argued that these payments were part of the employees’ earnings and were therefore liable to Class 1 National Insurance contributions and Income Tax. The long running case was first heard by the First-tier Tribunal (FTT) back in 2012. The FTT found in favour of Rangers and this decision was supported by the Upper Tribunal on first appeal by HMRC. However, HMRC’s subsequent further appeal to the Scottish Court of Session was allowed and this decision has now been upheld in a unanimous verdict by all five Supreme Court judges.

HMRC continues to attach schemes of this nature and are applauded for their efforts by the majority of British taxpayers.


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