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Rangers: And This Is Where The Story Really Begins

by Mark| Jul 28, 2017

On Wednesday, the Scottish Professional Football League (SPFL) Board announced, undercover of “legal advice from eminent Senior Counsel Gerry Moynihan,” that Rangers would get away with their unlawful use of “EBTs (Employee Benefit Trusts) and other schemes.” Which had been confirmed three weeks earlier by the UK Supreme Court (SC).

The SPFL had said they would “take time to examine the SC ‎judgement in detail and consider any implications for the SPFL.” But Moynihan’s advice was twenty months old, given in response to the November 2015 Court of Session ruling upheld by the SC. So, clearly (and wisely), the SPFL had already “examined” the issues. And no new ones emerged from the SC. So, why the three-week delay in publishing their examination results?

It was as if the board wanted club’s season-tickets sold before announcing a decision that would encourage fans to boycott them, as happened in 2012, when attempts were made to shoehorn post-liquidation Rangers into pre-liquidation Rangers’ then-Scottish Premier League (SPL) place. A cynical concept but all-too-typical of the tale of the Rangers Tax Case(s).

Dismally, it needs re-iterating that Rangers avoided £24m in tax over a ten-year period by wilfully misusing a tax avoidance scheme. And the UK’s tax authority, Her Majesty’s Revenue and Customs (HMRC), penalised Rangers £12m, a 50% penalty only imposed on those taking “deliberate” actions to conceal tax avoidance.

The narrative that Rangers did “nothing wrong” is, therefore, preposterous. Yet, infuriatingly, it is being pushed the hardest and by the most inappropriate people and institutions, for reasons which bring all involved into disrepute.

Scotland’s football authorities and football journalists actively want Rangers to go unpunished for demonstrable “cheating,” matching the heaviest-blinkered Rangers fans in denying that anything illegal even occurred. These denials’ credibility collapses even at the first glance at the November 2012 First-Tier Tax Tribunal (FTT) ruling. And Rangers “won” that one, albeit by a majority 2-1 verdict.

Football administrators and journalists have wilfully misused their positions of legislative authority and influence. Other sports would not be and have not been so lax. Dammit, other Scottish football clubs would not be and HAVE NOT BEEN treated so leniently. And other news media would not be and have not been so spineless/dishonest/both.

The “Rangers Tax Case” has always been about more than Rangers. As Alex Thomson of Channel 4 News noted “the judgment could mean many English football clubs could be liable for hefty tax bills.” And HMRC persisted with the case to assist their pursuit of dubious tax avoidance in other industries and sectors. Tales of Celtic-loving HMRC officials pushing anti-Rangers agenda through the tax system were merely ignorant self-importance.

Two taxation principles were involved, both considerably pre-dating Rangers’ travails. The first was that payments not “unreservedly at employees’ disposal” were non-taxable. The second was that taxable earnings were taxable earnings regardless. The first prioritised system over purpose. The second vice-versa. The system won out across the tribunal system. The purpose swept the board in the courts. And I can hear even the remotely tax-literate, wailing at such over-simplification. Sorry.

Rangers employees, nearly all players, received contributions from the catchily-entitled Murray Group Management Remuneration Trust (MGMRT), which were paid into individual “sub-trusts.” The players could only access these on request from scheme trustees…who never said no. Indeed, the MGMRT’s original trustees were hooked after requesting security be provided for these “loans.” Many players’ agents, perhaps protective of their proverbial “10%”, requested “side-letters” confirming their clients’ sub-trust contributions, which arguably resembled side “contracts.”

However, as the SC noted, “(no) part of the transaction, which comprised the tax avoidance scheme, was a sham” (unlike the “film investment companies” used by many individual football people, including Celtic CEO Peter Lawwell, which sparked wet dreams at the Daily Record of a “Celtic Tax Case” last October).

So, while the sub-trust contributions could only have been for playing football (Rangers weren’t doling out money willy-nilly…well…not in this context), they did not “attract” tax because they were not, technically, “unreservedly” at players’ “disposal.” That trustees never said no wasn’t an issue because, the SC judgment also noted, “the elements of the transaction were all genuine and had legal effect.”

The SC judgment’s words here kick-started the “we did nothing illegal” school of thought (if thought isn’t too grand a term) currently all the rage among Rangers fans. However, the transactions’ legality and authenticity were ”not the point.” And all five SC judges concurred with HMRC’s counterpoint.

HMRC contended that the sub-trust contributions could only have been for playing football (Rangers weren’t doling out money willy-nilly…see above…). And, as the Court of Session’s summary of their ruling stated, the contributions“thus had been earned by the employee,” making the scheme “a mere redirection of earnings which did not remove the liability of employees to income tax.”

“That accords with common sense,” Judge Lord Drummond Young said last November. The SC insisted on “a purposive approach” where the overall “purpose” of the scheme outweighs all other considerations. And they concluded that “the risk that the trustee might not loan players their sub-trust funds “does not alter” the fact that the funds “were earnings in the first place.”

Between 1999 and 2002, Rangers operated a “Discount Options Scheme” covering three players; Craig Moore, Dutch international Ronald De Boer and then club record signing Tore Andre Flo (£12m for a poor man’s Peter Crouch. No wonder they went bust). The scheme was unlawful and HMRC assessed that Rangers owed £2.8m, plus £1.4m in penalties.

The £2.8m became part of the concurrent Rangers sale negotiations between vast-majority shareholder David Murray and Motherwell-born “billionaire” Craig Whyte. It was consistently labelled a “tax liability” during the recent trial of not-actually-a-billionaire Whyte. This “Wee Tax Case” (WTC) is, however, a separate saga, albeit one to which we will return. The “Big Tax Case” (BTC) is where the story really starts.

The MGMRT was established in April 2002, originally intended to benefit senior executives but soon expanded across Murray Group companies, including Rangers. Eighty-one Rangers employees participated. Rangers employees giving evidence to the FTT studiously avoided labelling it a tax avoidance scheme. The SC was less coy.

The MGMRT, the FTT ruling stated, “enabled (Rangers) to attract players who would not otherwise have been obtainable.” Although, in a March 2012 interview broadcast during Mark Daly’s May 2012 “BBC Scotland Investigates” documentary “The Men Who Sold the Jerseys,” Murray called it “non-contractual and discretionary,” adding that “we believe we worked the rules,” which sounded shiftier than intended. This “work” prevented disclosure to tax and football authorities. And this is where the story really starts…

HMRC began investigating the MGMRT on 24thJanuary 2004. However, “it was not until April 2008 when sufficient information became available” and “not through (Rangers’) disclosure,” which delayed assessments of tax due until 21st April 2010, thanks partly to “a lack of candour and co-operation” from Murray Group Tax and Pensions advisor Ian MacMillan.

HMRC’s counsel Roderick Thomson QC told the FTT that “there had been concealment from HMRC of many relevant documents. In footballer employment files volunteered to HMRC, side-letters had been removed apparently. In files seized unexpectedly from the club, side-letters were present…Mr MacMillan and Rangers” were not “forthcoming in providing all relevant documentation.”

As “seized unexpectedly” suggests, the side-letters were discovered by chance, and this is where the story really starts, by City of London Police, during their 2007 enquiries into Newcastle United transfers, including lumbering French international centre-back Jean-Alain Boumsong’s £8m Tyneside arrival in January 2005’s transfer window

Fans with elephantine memories may recall Boumsong’s struggles with non-league Yeading in the FA Cup. Eight months previously, Boumsong had been a “free” transfer, shortly after leaving French club Auxerre. Amid stories of Liverpool interest, Boumsong joined…Rangers.

Apropos of nothing whatsoever, Rangers ex-supremo Graeme Souness was Boumsong’s Newcastle boss. Souness received a £30,000 EBT payment in June 2001, ten years after leaving Rangers but five weeks after signing Turkish international Tugay for his then-club Blackburn Rovers from…Rangers. Souness later claimed his EBT was for “doing work for Rangers.” By the way.

In her dissenting opinion, tribunal member Dr Heidi Poon referenced non-disclosure of “key documents such as side-letters, calculations of figures of contributions, e-mails and memoranda related directly to the Trust’s operation…despite repeated requests and statutory demands for information.” She detected “hostility” from MacMillan.

And she added: “As a former inspector of taxes and with his professional knowledge as a chartered tax adviser, it is judicious to infer that (MacMillan’s) attitude and non-disclosure…did not spring from a lack of understanding of what was being requested but was informed by a wish to withhold documents which might implicate the operation of the Trust falling outwith legitimate scope.” When the FTT labelled MacMillan “an incredible witness,” it was not a eulogy.

Rangers similarly withheld key evidence to football authorities, who would only have known of the MGMRT through the most generic reference in the Club’s annual accounts to it as “established to provide incentives to certain employees and other service providers, with annual “contributions to employee trusts” filed under “staff costs” but not further sub-divided.

Responsible for THIS non-disclosure was Rangers’ head of football administration Andrew Dickson, who joined the Scottish FA’s Regulatory Advisory Group in July 2015. Doncaster was “delighted” that Dickson “got the recognition…after many years in different roles at Rangers.” File under “WTF?” Especially after reading transcripts of his FTT “performance.” You can almost hear him squirming as he “explains” how the one annual Champions League bonus payments schedule paid through the MGMRT just HAPPENED to be the one not disclosed to the SPL.

The footballing non-disclosures were the subject of an “independent” SPL commission, chaired by Lord William Nimmo-Smith, whose findings remain a major source of angst-ridden contention. A whole article on that soon.

HMRC eventually assessed that Rangers owed £24m tax, plus £12m penalties for scheme misuse. Rangers appealed their £24m assessment to the FTT, who declared this liability “substantially reduced.” An “Upper-Tier Tax Tribunal” (UTT) largely upheld this ruling in July 2014. However, HMRC victoriously appealed to Scotland’s Court of Session. And Rangers’ liquidators, BDO, unsuccessfully appealed that decision to the SC.

Rangers had requested a separate penalty appeals process, which could re-introduce FTTs to our story (“Hooray,” said…nobody). BDO have not yet appealed, although Rangers creditors, whose interests they represent, would benefit financially from appeal success, especially important given the crushing financial impact of HMRC’s success.

So, Rangers emerged from the “BTC” as guilty as predicted by a select few non-mainstream journalists in 2010. Yet they remain unpunished, for reasons which make little initial sense. And this is where the story REALLY starts…in my next article.

Fanzzzzz… The most, ahem, ‘passionate’ Rangers supporters have leapt headlong to their old club’s defence. This is an instinctive reaction for any club’s supporters until facts overtake instincts. However, a fanbase underpinned by a supremacist concept such as “we are the people,” has struggled to overcome these instincts. And for football authorities and news media to follow suit is unforgivable.

Fans have argued, with varying articulacy, reason and regard for reality, that Rangers did nothing “illegal.” Ibrox Noise website contributor Greg’s main takeaways were “EBTs are not illegal. They are not even immoral. No rules were broken.” Others might as effectively have screamed “Wibble!!” and pondered the striking sartorial similarities between Orange Order marches and Laurel and Hardy conventions.

The Gersnet website offered an intelligently “simplified” scheme precis, claiming it’s “operation” was “fully legal.” And they went peak smartarse with: “In 2010, despite the schemes appearing in Rangers’ accounts throughout the previous decade, HMRC decided to investigate the Murray Group’s use of such Trusts.” Well…no. HMRC ENDED their, six-year, investigation in 2010.

Had they started in 2010, current Rangers directors Paul Murray and Dave King could plead ignorance of the issues with far more confidence than if they started in 2004. Although perish the thought that the “In 2010, HMRC decided…” line is designed to divert focus from Murray and Kings’ adjacency to the whole tax farrago.

Accusations of “tax evasion” have touched many raw Rangers nerves. “Tax evasion, really?” tweeted an indignant “Scoob” to, of all people, the “Rangers Tax Case” (RTC) blogger. “Supreme Court judgement, section 1, paragraph 1, line 1: ‘This appeal concerns a tax avoidance scheme.’ Why lie? There is absolutely no mention at all in the whole document of “Tax Evasion.” Is it any wonder Rangers fans have questioned your motives?” The SC were not ruling on “tax evasion.” But…hey…

RTC’s response to such zoomery was heart-warmingly dismissive: “OK. I’ll ignore the reasons given by the man who decided to set up EBTs at Rangers and go with your view,” he sighed when Daily Record Rangers blogger James Black suggested Rangers’ EBTs were not designed for sporting advantage. “Only a moron could think saving £40m in tax on player wages didn’t affect who signed.”

Indeed, sporting advantage dominated discussions of whether sporting sanctions should apply. Yet “sporting advantages” are not standard criteria for such sanctions. For example, Legia Warsaw were expelled from 2014’s Champions League for fielding an ineligible player in the final minutes of a 6-1 aggregate victory. Not even the most rabid Ranger would say Legia obtained sporting advantage from substitute Bartoz Bereszynski’s cameo, especially as the reprieved team were…Celtic.

Responding to accusations that Rangers’ tax policy was “financial doping,” fans cited all the clubs who ran at financial losses in the 2000s? Except…Rangers indulged in this too. It was precisely why they saved a seven-figure annual sum in taxes and STILL went bust, the financial dopes.

Rangers “official” supporters’ organisation, Club 1872, “remain concerned that the SPFL board may attempt to act on behalf of Celtic in this matter. We are also aware that historically the SPFL lawyer, Rod McKenzie has taken an extremely hostile attitude towards Rangers which we do not believe is founded in his legal opinions. (If) the SPFL decide to act for the benefit of Celtic, then…Club 1872, Rangers and the wider Rangers support, will use every legal means necessary to challenge those who promote, support or facilitate such a course of action.”

I think the word you are looking for is…”anyway…”

The media Scotland’s football press has bog standards to live down to. Remarkably, on this subject, they have offered informative, considered analysis of the issues and…ha, no. It’s been the same old cods from the same old wallopers, with the same old “Exhibit A,” Derek bloody Johnstone.

Anyone expecting tuppence worth from the Glasgow Evening Times columnist and Rangers ex-striker was due a refund. “A lot of people,” he opined “are asking whether these players would have come to Rangers if it hadn’t been for their EBT payments? That is a massive question.”

Massive, but irrelevant. As Murray admitted, Rangers could not have even asked some players to join without the scheme operating unlawfully. Yet, as if his comprehensive cluelessness needed reassertion, Johnstone insisted they would “still have come” as “they were still getting big money.” Yes, but not as big…oh never mind.

The Guardian’s Ewan Murray, sounding more like the Golf correspondent he is than ever before, couldn’t see “the value of title-stripping. It’s done. Do you nullify all the games and re-award the points/leagues?” Well…no. But thanks for asking.

“Stripping Rangers’ titles will achieve little,” ran the headline to Alan Patullo’s Scotsman piece. “More than a whiff of dubiety will forever cling” to the relevant titles, he claimed, adding that “there is barely need for an asterisk to identify them in the history books (as) they will be judged differently in any case” and, brace yourselves, “Rangers supporters know it.” He has BEEN to Glasgow, right?

The Herald Group’s Michael Grant, however, produced the most factually inept attempt to push the party line. He wrote in the Times of “a few inconvenient facts which take the steam out of a ‘strip the titles’ campaign which has rumbled away in the background waiting for the catalyst of this final decision.” This campaign was at least part-driven, he claimed, by “insatiable tribal animosity.”

But he ignored these “facts,” whatever they were, preferring all-embracing disingenuousness. “EBTs were not illegal when Rangers used them.” The verdict did not “imply any illegality on David Murray or Rangers’ part.” And “no-one faces criminal charges for EBTs.” The clear distinction between illegality and criminality must have momentarily slipped his mind.

Grant reduced “the saga” to “a dispute between oldco and HMRC about whether tax should have been paid on the EBT ‘loans.’” He insisted “EBTs did not break any SFA or SPL rules when Rangers used them.” And he concluded that “Rangers funnelling millions through a once widespread but now discredited tax avoidance scheme cannot be classed alongside match-fixing, bribing officials or opponents or systemic performance-enhancing drug use.”

The RTC blogger begged to differ. “Your EBT story today is just inaccurate. Did you bother to get input from anyone who knows anything about this subject? Free lessons. RFC’s use of EBTs was illegal when RFC used them. RFC’s use of secret side-letters to implement EBTs was a breach of SFA and SPL rules. Why did you not fact check?”

There were journalistic lights in this factual darkness. Again, fairly usual suspects: Graham Speirs counter-pointing Grant’s rubbish in the Times and Martin Hannan counselling against SFA arrogance in the National. But RTC’s conclusion is inescapably correct: “I once hoped that exposing Rangers’ tax scandal would purge the corruption and selective ignorance from Scotland’s mainstream media. Forlorn hope.”

Dave King Dave King lied. Hey…I was shocked too.

In 2012: “With regard to EBTs, I was on the board so I have to take some responsibility. I follow the logic of the argument that if we lose the tax case then we probably gained some competitive advantage.” Last week: “Whether the scheme was in place or not, or whether it survived tax scrutiny or not, made no difference whatsoever to the playing squad of the Club during that period and hence had no impact on the performance on the pitch. We won all our titles fair and square.”

“I follow the logic” was standard King deceit, making something insignificant sound significant. But it was still a stretch to the 2017 guff, which immediately followed standard King lying: “The Murray Group tax scheme helped David Murray reduce his overall investment into Oldco while simultaneously reducing any reliance on increased third-party bank finance. The benefit went exclusively to David Murray and the Murray Group.”

You sometimes fear that he really believes this mendacity as much as the gullible hacks nodding in time to it as they swallow it whole for publication. It is just as well for him that the nodding-dogs can’t remember his lies because he surely can’t keep on top of all of them. And the nonsense continued.

“We are deliberately and transparently spending beyond our income. While I am chairman, Rangers’ overspending will always be on a sustainable and robust basis that safeguards the future of our Club.” More “soft” directors’ loans, then, from patently “soft” directors. Financial doping, anyone?

Scotland’s FA (F*** All) When faced with confirmation of the nature and scale of a member club’s wrongdoing, FAs would ordinarily “clarify (its) implications from a football regulatory perspective.” And in complex cases, they would ordinarily seek legal counsel as to whether such wrongdoing was “a breach of…disciplinary rules.”

These are direct lifts from the SFA’s response to the SC judgment. Twelve years of what HMRC have penalised as tax evasion would breach any robust football administration rules. Yet the SFA only sought advice on whether it “could imply that” rules had been breached. And “Senior Counsel” counselled that they had “a very limited chance of succeeding in relation to any complaint regarding this matter and that…any sanctions available to a Judicial Panel would also be limited in their scope.” So, they…gave up, “(determining) that no further disciplinary action should be taken.”

This was a stunning admission of impotence, a curious reluctance to stand up for their own rules…and a major story for any proper journ…you know the rest.

The explanation may lie in one of 2012’s many shameful episodes. On July 18th, the Daily Record’s Keith McLeod revealed “Football chiefs secret plan to strip Rangers of nine trophies over EBT tax dodge.” The proposal to divest Rangers of five league titles and four Scottish Cups came from an early draft of, and the first widespread public reference to, what eventually became known as the “five-way agreement,” which allowed a new Rangers into senior club football while the old one languished in liquidation.

In contrast to the “bombshell document seen by the Record, drafted after talks between the SFA, SPL, SFL and Sevco (Rangers) representatives,” the eventual five-way agreement, of which there are many publicly-leaked drafts, allegedly includes legal guarantees that Rangers titles were safe, however Rangers’ tax scheming was legally viewed.

This makes sense for the current club. It isn’t culpable for any tax “problems” (yet) and there are no calls for sanctions against them. But Scotland’s football authorities regard pre- and post-liquidation Rangers as “the same club.” The SPL even wanted the “same club” in the same league in 2012 despite liquidation, fearful of the impact of Rangers’ absence on their financial model. The current authorities seem as fearful of acknowledging the finality of corporate death and the fact that, as proper football journalist David Conn noted recently, “clubs are commercial companies with shareholders.”

So, their craven insistence that the “club survived liquidation,” even with no physical, let alone legal, manifestation of that club (constitution, committee, membership etc…), means title-stripping would break their five-way concordat. Hence their “very limited chance of” APPLYING…THEIR…OWN…RULES.

Like 2012, then, supporters have become prime rule-enforcers, a situation so ridiculous that all significant Scottish football administrators should resign immediately.

Judicial review calls are increasing in number and intensity, turbo-charged by Wednesday’s wacky SPFL “wisdom.” And Scotland’s football authorities and football media are reaching peak wibble, attempting to justify their legislative inaction by openly lying about key issues. If theythink lines are being drawn under Rangers’ cheating, they might be more deluded and off-the-story than ever.

And this is where the story REALLY starts.

Such is the nature of this story that we already know that we have amendments to make to it. These will follow next week.

Who writes this fucking shite? Mark??

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Pasting that article isn't necessary. Take note of who he is and who he's writing for (in this case I imagine some irrelevant no-mark blog). Then, send it to Club 1872.

It is a complete waste of time reading past the first few lines. 

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It's a blog that's two hundred percent a load of "baws".

SPL had no rules against legal tax avoidance or EBTs from 2001-2010 end of story. Rangers did not break any rules cause there were no rules against what the club did.

What these clowns are demanding is that the SPFL bring in new rules in 2017 and apply them retrospectively back 16 years ago?  That's like the government changing the speed limit to 25mph in built up areas starting tomorrow then going out and arresting people who drove 30mphs in 1975 that's the kind of law Nazi Germany would have been proud of.

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27 minutes ago, Orange and Blue said:

Rangers: And This Is Where The Story Really Begins

by Mark| Jul 28, 2017

On Wednesday, the Scottish Professional Football League (SPFL) Board announced, undercover of “legal advice from eminent Senior Counsel Gerry Moynihan,” that Rangers would get away with their unlawful use of “EBTs (Employee Benefit Trusts) and other schemes.” Which had been confirmed three weeks earlier by the UK Supreme Court (SC).

The SPFL had said they would “take time to examine the SC ‎judgement in detail and consider any implications for the SPFL.” But Moynihan’s advice was twenty months old, given in response to the November 2015 Court of Session ruling upheld by the SC. So, clearly (and wisely), the SPFL had already “examined” the issues. And no new ones emerged from the SC. So, why the three-week delay in publishing their examination results?

It was as if the board wanted club’s season-tickets sold before announcing a decision that would encourage fans to boycott them, as happened in 2012, when attempts were made to shoehorn post-liquidation Rangers into pre-liquidation Rangers’ then-Scottish Premier League (SPL) place. A cynical concept but all-too-typical of the tale of the Rangers Tax Case(s).

Dismally, it needs re-iterating that Rangers avoided £24m in tax over a ten-year period by wilfully misusing a tax avoidance scheme. And the UK’s tax authority, Her Majesty’s Revenue and Customs (HMRC), penalised Rangers £12m, a 50% penalty only imposed on those taking “deliberate” actions to conceal tax avoidance.

The narrative that Rangers did “nothing wrong” is, therefore, preposterous. Yet, infuriatingly, it is being pushed the hardest and by the most inappropriate people and institutions, for reasons which bring all involved into disrepute.

Scotland’s football authorities and football journalists actively want Rangers to go unpunished for demonstrable “cheating,” matching the heaviest-blinkered Rangers fans in denying that anything illegal even occurred. These denials’ credibility collapses even at the first glance at the November 2012 First-Tier Tax Tribunal (FTT) ruling. And Rangers “won” that one, albeit by a majority 2-1 verdict.

Football administrators and journalists have wilfully misused their positions of legislative authority and influence. Other sports would not be and have not been so lax. Dammit, other Scottish football clubs would not be and HAVE NOT BEEN treated so leniently. And other news media would not be and have not been so spineless/dishonest/both.

The “Rangers Tax Case” has always been about more than Rangers. As Alex Thomson of Channel 4 News noted “the judgment could mean many English football clubs could be liable for hefty tax bills.” And HMRC persisted with the case to assist their pursuit of dubious tax avoidance in other industries and sectors. Tales of Celtic-loving HMRC officials pushing anti-Rangers agenda through the tax system were merely ignorant self-importance.

Two taxation principles were involved, both considerably pre-dating Rangers’ travails. The first was that payments not “unreservedly at employees’ disposal” were non-taxable. The second was that taxable earnings were taxable earnings regardless. The first prioritised system over purpose. The second vice-versa. The system won out across the tribunal system. The purpose swept the board in the courts. And I can hear even the remotely tax-literate, wailing at such over-simplification. Sorry.

Rangers employees, nearly all players, received contributions from the catchily-entitled Murray Group Management Remuneration Trust (MGMRT), which were paid into individual “sub-trusts.” The players could only access these on request from scheme trustees…who never said no. Indeed, the MGMRT’s original trustees were hooked after requesting security be provided for these “loans.” Many players’ agents, perhaps protective of their proverbial “10%”, requested “side-letters” confirming their clients’ sub-trust contributions, which arguably resembled side “contracts.”

However, as the SC noted, “(no) part of the transaction, which comprised the tax avoidance scheme, was a sham” (unlike the “film investment companies” used by many individual football people, including Celtic CEO Peter Lawwell, which sparked wet dreams at the Daily Record of a “Celtic Tax Case” last October).

So, while the sub-trust contributions could only have been for playing football (Rangers weren’t doling out money willy-nilly…well…not in this context), they did not “attract” tax because they were not, technically, “unreservedly” at players’ “disposal.” That trustees never said no wasn’t an issue because, the SC judgment also noted, “the elements of the transaction were all genuine and had legal effect.”

The SC judgment’s words here kick-started the “we did nothing illegal” school of thought (if thought isn’t too grand a term) currently all the rage among Rangers fans. However, the transactions’ legality and authenticity were ”not the point.” And all five SC judges concurred with HMRC’s counterpoint.

HMRC contended that the sub-trust contributions could only have been for playing football (Rangers weren’t doling out money willy-nilly…see above…). And, as the Court of Session’s summary of their ruling stated, the contributions“thus had been earned by the employee,” making the scheme “a mere redirection of earnings which did not remove the liability of employees to income tax.”

“That accords with common sense,” Judge Lord Drummond Young said last November. The SC insisted on “a purposive approach” where the overall “purpose” of the scheme outweighs all other considerations. And they concluded that “the risk that the trustee might not loan players their sub-trust funds “does not alter” the fact that the funds “were earnings in the first place.”

Between 1999 and 2002, Rangers operated a “Discount Options Scheme” covering three players; Craig Moore, Dutch international Ronald De Boer and then club record signing Tore Andre Flo (£12m for a poor man’s Peter Crouch. No wonder they went bust). The scheme was unlawful and HMRC assessed that Rangers owed £2.8m, plus £1.4m in penalties.

The £2.8m became part of the concurrent Rangers sale negotiations between vast-majority shareholder David Murray and Motherwell-born “billionaire” Craig Whyte. It was consistently labelled a “tax liability” during the recent trial of not-actually-a-billionaire Whyte. This “Wee Tax Case” (WTC) is, however, a separate saga, albeit one to which we will return. The “Big Tax Case” (BTC) is where the story really starts.

The MGMRT was established in April 2002, originally intended to benefit senior executives but soon expanded across Murray Group companies, including Rangers. Eighty-one Rangers employees participated. Rangers employees giving evidence to the FTT studiously avoided labelling it a tax avoidance scheme. The SC was less coy.

The MGMRT, the FTT ruling stated, “enabled (Rangers) to attract players who would not otherwise have been obtainable.” Although, in a March 2012 interview broadcast during Mark Daly’s May 2012 “BBC Scotland Investigates” documentary “The Men Who Sold the Jerseys,” Murray called it “non-contractual and discretionary,” adding that “we believe we worked the rules,” which sounded shiftier than intended. This “work” prevented disclosure to tax and football authorities. And this is where the story really starts…

HMRC began investigating the MGMRT on 24thJanuary 2004. However, “it was not until April 2008 when sufficient information became available” and “not through (Rangers’) disclosure,” which delayed assessments of tax due until 21st April 2010, thanks partly to “a lack of candour and co-operation” from Murray Group Tax and Pensions advisor Ian MacMillan.

HMRC’s counsel Roderick Thomson QC told the FTT that “there had been concealment from HMRC of many relevant documents. In footballer employment files volunteered to HMRC, side-letters had been removed apparently. In files seized unexpectedly from the club, side-letters were present…Mr MacMillan and Rangers” were not “forthcoming in providing all relevant documentation.”

As “seized unexpectedly” suggests, the side-letters were discovered by chance, and this is where the story really starts, by City of London Police, during their 2007 enquiries into Newcastle United transfers, including lumbering French international centre-back Jean-Alain Boumsong’s £8m Tyneside arrival in January 2005’s transfer window

Fans with elephantine memories may recall Boumsong’s struggles with non-league Yeading in the FA Cup. Eight months previously, Boumsong had been a “free” transfer, shortly after leaving French club Auxerre. Amid stories of Liverpool interest, Boumsong joined…Rangers.

Apropos of nothing whatsoever, Rangers ex-supremo Graeme Souness was Boumsong’s Newcastle boss. Souness received a £30,000 EBT payment in June 2001, ten years after leaving Rangers but five weeks after signing Turkish international Tugay for his then-club Blackburn Rovers from…Rangers. Souness later claimed his EBT was for “doing work for Rangers.” By the way.

In her dissenting opinion, tribunal member Dr Heidi Poon referenced non-disclosure of “key documents such as side-letters, calculations of figures of contributions, e-mails and memoranda related directly to the Trust’s operation…despite repeated requests and statutory demands for information.” She detected “hostility” from MacMillan.

And she added: “As a former inspector of taxes and with his professional knowledge as a chartered tax adviser, it is judicious to infer that (MacMillan’s) attitude and non-disclosure…did not spring from a lack of understanding of what was being requested but was informed by a wish to withhold documents which might implicate the operation of the Trust falling outwith legitimate scope.” When the FTT labelled MacMillan “an incredible witness,” it was not a eulogy.

Rangers similarly withheld key evidence to football authorities, who would only have known of the MGMRT through the most generic reference in the Club’s annual accounts to it as “established to provide incentives to certain employees and other service providers, with annual “contributions to employee trusts” filed under “staff costs” but not further sub-divided.

Responsible for THIS non-disclosure was Rangers’ head of football administration Andrew Dickson, who joined the Scottish FA’s Regulatory Advisory Group in July 2015. Doncaster was “delighted” that Dickson “got the recognition…after many years in different roles at Rangers.” File under “WTF?” Especially after reading transcripts of his FTT “performance.” You can almost hear him squirming as he “explains” how the one annual Champions League bonus payments schedule paid through the MGMRT just HAPPENED to be the one not disclosed to the SPL.

The footballing non-disclosures were the subject of an “independent” SPL commission, chaired by Lord William Nimmo-Smith, whose findings remain a major source of angst-ridden contention. A whole article on that soon.

HMRC eventually assessed that Rangers owed £24m tax, plus £12m penalties for scheme misuse. Rangers appealed their £24m assessment to the FTT, who declared this liability “substantially reduced.” An “Upper-Tier Tax Tribunal” (UTT) largely upheld this ruling in July 2014. However, HMRC victoriously appealed to Scotland’s Court of Session. And Rangers’ liquidators, BDO, unsuccessfully appealed that decision to the SC.

Rangers had requested a separate penalty appeals process, which could re-introduce FTTs to our story (“Hooray,” said…nobody). BDO have not yet appealed, although Rangers creditors, whose interests they represent, would benefit financially from appeal success, especially important given the crushing financial impact of HMRC’s success.

So, Rangers emerged from the “BTC” as guilty as predicted by a select few non-mainstream journalists in 2010. Yet they remain unpunished, for reasons which make little initial sense. And this is where the story REALLY starts…in my next article.

Fanzzzzz… The most, ahem, ‘passionate’ Rangers supporters have leapt headlong to their old club’s defence. This is an instinctive reaction for any club’s supporters until facts overtake instincts. However, a fanbase underpinned by a supremacist concept such as “we are the people,” has struggled to overcome these instincts. And for football authorities and news media to follow suit is unforgivable.

Fans have argued, with varying articulacy, reason and regard for reality, that Rangers did nothing “illegal.” Ibrox Noise website contributor Greg’s main takeaways were “EBTs are not illegal. They are not even immoral. No rules were broken.” Others might as effectively have screamed “Wibble!!” and pondered the striking sartorial similarities between Orange Order marches and Laurel and Hardy conventions.

The Gersnet website offered an intelligently “simplified” scheme precis, claiming it’s “operation” was “fully legal.” And they went peak smartarse with: “In 2010, despite the schemes appearing in Rangers’ accounts throughout the previous decade, HMRC decided to investigate the Murray Group’s use of such Trusts.” Well…no. HMRC ENDED their, six-year, investigation in 2010.

Had they started in 2010, current Rangers directors Paul Murray and Dave King could plead ignorance of the issues with far more confidence than if they started in 2004. Although perish the thought that the “In 2010, HMRC decided…” line is designed to divert focus from Murray and Kings’ adjacency to the whole tax farrago.

Accusations of “tax evasion” have touched many raw Rangers nerves. “Tax evasion, really?” tweeted an indignant “Scoob” to, of all people, the “Rangers Tax Case” (RTC) blogger. “Supreme Court judgement, section 1, paragraph 1, line 1: ‘This appeal concerns a tax avoidance scheme.’ Why lie? There is absolutely no mention at all in the whole document of “Tax Evasion.” Is it any wonder Rangers fans have questioned your motives?” The SC were not ruling on “tax evasion.” But…hey…

RTC’s response to such zoomery was heart-warmingly dismissive: “OK. I’ll ignore the reasons given by the man who decided to set up EBTs at Rangers and go with your view,” he sighed when Daily Record Rangers blogger James Black suggested Rangers’ EBTs were not designed for sporting advantage. “Only a moron could think saving £40m in tax on player wages didn’t affect who signed.”

Indeed, sporting advantage dominated discussions of whether sporting sanctions should apply. Yet “sporting advantages” are not standard criteria for such sanctions. For example, Legia Warsaw were expelled from 2014’s Champions League for fielding an ineligible player in the final minutes of a 6-1 aggregate victory. Not even the most rabid Ranger would say Legia obtained sporting advantage from substitute Bartoz Bereszynski’s cameo, especially as the reprieved team were…Celtic.

Responding to accusations that Rangers’ tax policy was “financial doping,” fans cited all the clubs who ran at financial losses in the 2000s? Except…Rangers indulged in this too. It was precisely why they saved a seven-figure annual sum in taxes and STILL went bust, the financial dopes.

Rangers “official” supporters’ organisation, Club 1872, “remain concerned that the SPFL board may attempt to act on behalf of Celtic in this matter. We are also aware that historically the SPFL lawyer, Rod McKenzie has taken an extremely hostile attitude towards Rangers which we do not believe is founded in his legal opinions. (If) the SPFL decide to act for the benefit of Celtic, then…Club 1872, Rangers and the wider Rangers support, will use every legal means necessary to challenge those who promote, support or facilitate such a course of action.”

I think the word you are looking for is…”anyway…”

The media Scotland’s football press has bog standards to live down to. Remarkably, on this subject, they have offered informative, considered analysis of the issues and…ha, no. It’s been the same old cods from the same old wallopers, with the same old “Exhibit A,” Derek bloody Johnstone.

Anyone expecting tuppence worth from the Glasgow Evening Times columnist and Rangers ex-striker was due a refund. “A lot of people,” he opined “are asking whether these players would have come to Rangers if it hadn’t been for their EBT payments? That is a massive question.”

Massive, but irrelevant. As Murray admitted, Rangers could not have even asked some players to join without the scheme operating unlawfully. Yet, as if his comprehensive cluelessness needed reassertion, Johnstone insisted they would “still have come” as “they were still getting big money.” Yes, but not as big…oh never mind.

The Guardian’s Ewan Murray, sounding more like the Golf correspondent he is than ever before, couldn’t see “the value of title-stripping. It’s done. Do you nullify all the games and re-award the points/leagues?” Well…no. But thanks for asking.

“Stripping Rangers’ titles will achieve little,” ran the headline to Alan Patullo’s Scotsman piece. “More than a whiff of dubiety will forever cling” to the relevant titles, he claimed, adding that “there is barely need for an asterisk to identify them in the history books (as) they will be judged differently in any case” and, brace yourselves, “Rangers supporters know it.” He has BEEN to Glasgow, right?

The Herald Group’s Michael Grant, however, produced the most factually inept attempt to push the party line. He wrote in the Times of “a few inconvenient facts which take the steam out of a ‘strip the titles’ campaign which has rumbled away in the background waiting for the catalyst of this final decision.” This campaign was at least part-driven, he claimed, by “insatiable tribal animosity.”

But he ignored these “facts,” whatever they were, preferring all-embracing disingenuousness. “EBTs were not illegal when Rangers used them.” The verdict did not “imply any illegality on David Murray or Rangers’ part.” And “no-one faces criminal charges for EBTs.” The clear distinction between illegality and criminality must have momentarily slipped his mind.

Grant reduced “the saga” to “a dispute between oldco and HMRC about whether tax should have been paid on the EBT ‘loans.’” He insisted “EBTs did not break any SFA or SPL rules when Rangers used them.” And he concluded that “Rangers funnelling millions through a once widespread but now discredited tax avoidance scheme cannot be classed alongside match-fixing, bribing officials or opponents or systemic performance-enhancing drug use.”

The RTC blogger begged to differ. “Your EBT story today is just inaccurate. Did you bother to get input from anyone who knows anything about this subject? Free lessons. RFC’s use of EBTs was illegal when RFC used them. RFC’s use of secret side-letters to implement EBTs was a breach of SFA and SPL rules. Why did you not fact check?”

There were journalistic lights in this factual darkness. Again, fairly usual suspects: Graham Speirs counter-pointing Grant’s rubbish in the Times and Martin Hannan counselling against SFA arrogance in the National. But RTC’s conclusion is inescapably correct: “I once hoped that exposing Rangers’ tax scandal would purge the corruption and selective ignorance from Scotland’s mainstream media. Forlorn hope.”

Dave King Dave King lied. Hey…I was shocked too.

In 2012: “With regard to EBTs, I was on the board so I have to take some responsibility. I follow the logic of the argument that if we lose the tax case then we probably gained some competitive advantage.” Last week: “Whether the scheme was in place or not, or whether it survived tax scrutiny or not, made no difference whatsoever to the playing squad of the Club during that period and hence had no impact on the performance on the pitch. We won all our titles fair and square.”

“I follow the logic” was standard King deceit, making something insignificant sound significant. But it was still a stretch to the 2017 guff, which immediately followed standard King lying: “The Murray Group tax scheme helped David Murray reduce his overall investment into Oldco while simultaneously reducing any reliance on increased third-party bank finance. The benefit went exclusively to David Murray and the Murray Group.”

You sometimes fear that he really believes this mendacity as much as the gullible hacks nodding in time to it as they swallow it whole for publication. It is just as well for him that the nodding-dogs can’t remember his lies because he surely can’t keep on top of all of them. And the nonsense continued.

“We are deliberately and transparently spending beyond our income. While I am chairman, Rangers’ overspending will always be on a sustainable and robust basis that safeguards the future of our Club.” More “soft” directors’ loans, then, from patently “soft” directors. Financial doping, anyone?

Scotland’s FA (F*** All) When faced with confirmation of the nature and scale of a member club’s wrongdoing, FAs would ordinarily “clarify (its) implications from a football regulatory perspective.” And in complex cases, they would ordinarily seek legal counsel as to whether such wrongdoing was “a breach of…disciplinary rules.”

These are direct lifts from the SFA’s response to the SC judgment. Twelve years of what HMRC have penalised as tax evasion would breach any robust football administration rules. Yet the SFA only sought advice on whether it “could imply that” rules had been breached. And “Senior Counsel” counselled that they had “a very limited chance of succeeding in relation to any complaint regarding this matter and that…any sanctions available to a Judicial Panel would also be limited in their scope.” So, they…gave up, “(determining) that no further disciplinary action should be taken.”

This was a stunning admission of impotence, a curious reluctance to stand up for their own rules…and a major story for any proper journ…you know the rest.

The explanation may lie in one of 2012’s many shameful episodes. On July 18th, the Daily Record’s Keith McLeod revealed “Football chiefs secret plan to strip Rangers of nine trophies over EBT tax dodge.” The proposal to divest Rangers of five league titles and four Scottish Cups came from an early draft of, and the first widespread public reference to, what eventually became known as the “five-way agreement,” which allowed a new Rangers into senior club football while the old one languished in liquidation.

In contrast to the “bombshell document seen by the Record, drafted after talks between the SFA, SPL, SFL and Sevco (Rangers) representatives,” the eventual five-way agreement, of which there are many publicly-leaked drafts, allegedly includes legal guarantees that Rangers titles were safe, however Rangers’ tax scheming was legally viewed.

This makes sense for the current club. It isn’t culpable for any tax “problems” (yet) and there are no calls for sanctions against them. But Scotland’s football authorities regard pre- and post-liquidation Rangers as “the same club.” The SPL even wanted the “same club” in the same league in 2012 despite liquidation, fearful of the impact of Rangers’ absence on their financial model. The current authorities seem as fearful of acknowledging the finality of corporate death and the fact that, as proper football journalist David Conn noted recently, “clubs are commercial companies with shareholders.”

So, their craven insistence that the “club survived liquidation,” even with no physical, let alone legal, manifestation of that club (constitution, committee, membership etc…), means title-stripping would break their five-way concordat. Hence their “very limited chance of” APPLYING…THEIR…OWN…RULES.

Like 2012, then, supporters have become prime rule-enforcers, a situation so ridiculous that all significant Scottish football administrators should resign immediately.

Judicial review calls are increasing in number and intensity, turbo-charged by Wednesday’s wacky SPFL “wisdom.” And Scotland’s football authorities and football media are reaching peak wibble, attempting to justify their legislative inaction by openly lying about key issues. If theythink lines are being drawn under Rangers’ cheating, they might be more deluded and off-the-story than ever.

And this is where the story REALLY starts.

Such is the nature of this story that we already know that we have amendments to make to it. These will follow next week.

Who writes this fucking shite? Mark??

berneydidnotread.gif?1318992465

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lost the will to live after second paragraph.

 

Fuck them lets go for it this year and then we will see some real howling at the moon. George square will be full of them with their wee candles on the first night of a full moon after 55 is delivered.

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Wasn't halfway through and was fed up reading shite, then came across the nugget 'this is where the story starts'. No, that's where I finished thinking..... image.gif.bed7a45b9765e378aa8b52d74422bafd.gif

but here's where the story really starts, 'Mark, you're a dick and an obsessed mhanky bastard". I suggest you move on with your life. 

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