Rangers Tax Case – Financial Impropriety and Football
Solictior Advocate John Carruthers of Oracle Law discusses the final decision by the Supreme Court on the long running Rangers Tax Case
The liquidation of Rangers has resulted in three criminal appeal court cases, two Court of Session cases, one of which was appealed and The Big Tax case in the Supreme Court. Excepting the Big Tax case, the demise of Rangers has generated a great deal of heat but very little light.
The Big Tax case warrants close consideration as it discusses a failed scheme the purpose of which was to avoid paying tax.
The Rangers tax avoidance scheme involved payment of around one half a footballers salary into a trust which then ‘lent’ the footballer that money on a non-repayable basis. No tax was paid by either the footballer or Rangers on the money which had been put into the trust.
HMRC argued that the payments to the trust were directly related to the employment of footballers and senior staff at the club.
The Supreme court agreed with HMRC’s analysis and unanimously found that when Rangers transferred money to the trust it should have paid PAYE and NI on the money. By avoiding payment of PAYE and NI Rangers could pay larger salaries to their players than they ordinarily would have been able to do.
The other cases involving the liquidation of Rangers were also published following the acquittal of Craig Whyte.
In the Court of Session, Charles Green sought to persuade the court that the current Rangers FC had indemnified him for any costs he may incur if he became involved in court proceedings which was related to his time at Rangers. Mr Green lost, appealed the decision and lost again. The court held that his indemnity did not extend to conduct which was not directly related to his activities as CEO of Rangers. The criminal charges which Mr Green faced were eventually dropped by the crown.
Withey and Greer, won their case in the appeal court on the basis the Crown had obtained details of their defence unlawfully and had used that information to their disadvantage. They argued the Crown were acting oppressively and the court agreed.
The Crown’s behaviour was once again examined in the case of Whitehouse & Clark. Here the Crown had stated false facts in support of a crown motion to extend the time within which they could serve an indictment on the accused. The Appeal court, whilst not condoning the Crown’s behaviour, allowed the extension of time on the basis that:
“The case concerns the high profile dismantling of Rangers and very serious charges of financial impropriety….”
In the Criminal appeal court Mr Whyte attempted to challenge the definition of fraud. He was unsuccessful but acquitted of all charges at trial.