Who Benefited From The Ebt?

[don logan 8,075]

Can anyone clarify for me who actually benefitted from the EBT?

Was it the players that participated in the scheme who gained from a higher nett take home pay from their gross earnings?

Was it the club who met the players take home expectations (based on their gross less standard tax rates)but paid less to HMRC by utilising the EBT?

Or did both club and player benefit by "sharing" the savings made?

[bluepeter 5,627]

The club.

[TheLawMan 6,240]

Both

[Sheikh Salim 215]

[thebooler 4,509]

Come November, the tax man?

[Chuck_Fickens 425]

The fans.

[linfield1690 4,249]

The BBC

[forlanssister 157]

The club.

That remains to be seen.

[pcbear 10,924]

Can anyone clarify for me who actually benefitted from the EBT?

Was it the players that participated in the scheme who gained from a higher nett take home pay from their gross earnings?

Was it the club who met the players take home expectations (based on their gross less standard tax rates)but paid less to HMRC by utilising the EBT?

Or did both club and player benefit by "sharing" the savings made?

A question that i've asked as well only to be furnished with throwaway quips, with nothing that resembles an answer, the sums of money involved are pretty stunning and if Rangers were playing the system every other major club must have been doing exactly the same i would have thought.

Good post mate i await replies from the posters who supposedly know about this, anyone give it to us in laymans terms? years,players etc.

[IbroxBurnzy 484]

A question that i've asked as well only to be furnished with throwaway quips, with nothing that resembles an answer, the sums of money involved are pretty stunning and if Rangers were playing the system every other major club must have been doing exactly the same i would have thought.

Good post mate i await replies from the posters who supposedly know about this, anyone give it to us in laymans terms? years,players etc.

Still waiting???

[TheLawMan 6,240]

It started out as tax consultants speaking to the club giving them a scheme that would save the club paying a portion of tax to HMRC.

Not only does the employer not pay tax, but the employee also saves tax and quite a bit of it.

So in short both the club and the player end up with more money in the bank than what they would under a normal UK tax paying employment contract.

[Sicknote 26]

It's my understanding that the details of payments are not in the public domain.

[don logan 8,075]

It started out as tax consultants speaking to the club giving them a scheme that would save the club paying a portion of tax to HMRC.

Not only does the employer not pay tax, but the employee also saves tax and quite a bit of it.

So in short both the club and the player end up with more money in the bank than what they would under a normal UK tax paying employment contract.

That makes sense. What I wonder is, was the extra guaranteed take home integral to us signing certain players, or was it just greed fuelled by SDM's inability to resist the chance of a perceived fast buck? A necessary component in team building or a potential folly? Fuck, I think that's a rhetorical question

[TheLawMan 6,240]

That makes sense. What I wonder is, was the extra guaranteed take home integral to us signing certain players, or was it just greed fuelled by SDM's inability to resist the chance of a perceived fast buck? A necessary component in team building or a potential folly? Fuck, I think that's a rhetorical question

You have to bare in mind that back in the day, and even still to this day, tax advisors exist with the sole aim of finding loop holes in the system to save companies money.

Ive sat on a few Boards where EBT's or their ilk have been put forward by advisors and on each occasion for various reasons, we knocked them back. The likelihood is that in the beginning, they thought it would be good to save up to £1m a year then as time went by, with auditors signing off accounts and no questions being raised by the tax man, then use of them got greater and greater as the Board got more confident in them.

I think thats when they would have used them as a "hook" to get certain players on board with us, taking the scheme out of control to its height in 2006 when we plunged £9m through the scheme.

[bluepeter 5,627]

It started out as tax consultants speaking to the club giving them a scheme that would save the club paying a portion of tax to HMRC.

Not only does the employer not pay tax, but the employee also saves tax and quite a bit of it.

So in short both the club and the player end up with more money in the bank than what they would under a normal UK tax paying employment contract.

As a footballer, they would have looked at how much take-home pay was on offer. How that was paid or who paid tax on it wouldn't have bothered them at all. If the EBTs weren't in place, we would have had to give them a larger top-line so that they got the same take-home pay. This would have cost Rangers money, not the player. I can only see the club gaining, not the player. He simply wouldn't have accepted a lower take-home pay.

Of course, that is all wrong because it assumes the EBTs were used as a form of wages, which as we all know is illegal tax evasion and would result in a case being brought against Rangers (not the players) for the unpaid tax. The EBTs were simply loans. Interest-free, repayment-free loans.

[TheLawMan 6,240]

As a footballer, they would have looked at how much take-home pay was on offer. How that was paid or who paid tax on it wouldn't have bothered them at all. If the EBTs weren't in place, we would have had to give them a larger top-line so that they got the same take-home pay. This would have cost Rangers money, not the player. I can only see the club gaining, not the player. He simply wouldn't have accepted a lower take-home pay.

Of course, that is all wrong because it assumes the EBTs were used as a form of wages, which as we all know is illegal tax evasion and would result in a case being brought against Rangers (not the players) for the unpaid tax. The EBTs were simply loans. Interest-free, repayment-free loans.

Its inconceivable that the players wouldn't benefit from it. When players wee approached to sign for Rangers, the scheme would have to be explained to them in detail otherwise why would players move to another company and not agree to a normal salaried position. Part of that explanation as to "why they should do it" would be that they get to keep more of the money.

If it was going to work out that they just got the same money no matter what, then players would have simply said, "Nah, i would prefer you just pay me normally by giving me a higher basic"

Would you move your job right now to a position that doesnt give you a contracted Salary for the same amount of take home money ???

[bluepeter 5,627]

Its inconceivable that the players wouldn't benefit from it. When players wee approached to sign for Rangers, the scheme would have to be explained to them in detail otherwise why would players move to another company and not agree to a normal salaried position. Part of that explanation as to "why they should do it" would be that they get to keep more of the money.

If it was going to work out that they just got the same money no matter what, then players would have simply said, "Nah, i would prefer you just pay me normally by giving me a higher basic"

Would you move your job right now to a position that doesnt give you a contracted Salary for the same amount of take home money ???

Say, for the sake of the argument, a player is told "we are going to give you £20,000pw but £5,000 of that will be in the form of a repayment-free loan as that's how we pay wages" and the move is one a player wants to make, he may very well accept it. To answer your last question, if a company offered me a job with the same contracted salary as I'm on with an additional repayment-free loan to top up my salary I'd take it, if the job was right. I would expect (almost, if not) every player we signed and paid using an EBT was on more wages (take-home) at Rangers than they were at the club they signed from.

The players are only concerned about take-home pay, and they would have been told what that was going to be before they signed. To give them the same take-home pay, Rangers can either:

1 - Use an EBT so that the player gets £X and Rangers pay less tax; or

2 - Not use an EBT, give the player a higher top line salary and pay more tax.

Rangers win out of this, as far as I can see. The player gets the same take-home pay regardless.

[TheLawMan 6,240]

Say, for the sake of the argument, a player is told "we are going to give you £20,000pw but £5,000 of that will be in the form of a repayment-free loan as that's how we pay wages" and the move is one a player wants to make, he may very well accept it. To answer your last question, if a company offered me a job with the same contracted salary as I'm on with an additional repayment-free loan to top up my salary I'd take it, if the job was right. I would expect (almost, if not) every player we signed and paid using an EBT was on more wages (take-home) at Rangers than they were at the club they signed from.

The players are only concerned about take-home pay, and they would have been told what that was going to be before they signed. To give them the same take-home pay, Rangers can either:

1 - Use an EBT so that the player gets £X and Rangers pay less tax; or

2 - Not use an EBT, give the player a higher top line salary and pay more tax.

Rangers win out of this, as far as I can see. The player gets the same take-home pay regardless.

But if you were offered 2 jobs by 2 employers.

1) Straight forward salaried position written down contract £40k per week giving you £20k per week Take Home

2) No contract(this is an important aspect of EBT) but a promise of a repayment free loan of £20k per week Take Home

Which would you take ?

I remain unconvinced. In order to sell this scheme to a player and his agent, remember the payments were UNCONTRACTABLE, the player would need to be benefiting somehow, as otherwise, he simply wouldnt accept it.

[Imodium 411]

If we win the case would we be able to seek damages from HMRC?

[bluepeter 5,627]

But if you were offered 2 jobs by 2 employers.

1) Straight forward salaried position written down contract £40k per week giving you £20k per week Take Home

2) No contract(this is an important aspect of EBT) but a promise of a repayment free loan of £20k per week Take Home

Which would you take ?

I remain unconvinced. In order to sell this scheme to a player and his agent, remember the payments were UNCONTRACTABLE, the player would need to be benefiting somehow, as otherwise, he simply wouldnt accept it.

Option 2 is completely unrealistic, imo. It would surely have consisted of the player having a contracted wage, topped up by EBT. The important aspect of EBT is it should not be used as wages, so to have your entire "salary" paid in this way would raise far more eyebrows than it did.

If you were offered two jobs by two employers:

1) Straight forward salaried position written down contract £40k per week giving you £20k per week take home

2) Contract for £40k per week giving £20k take home, plus promise of repayment free loan of £10k per week.

Which would you take?

[TheLawMan 6,240]

Option 2 is completely unrealistic, imo. It would surely have consisted of the player having a contracted wage, topped up by EBT. The important aspect of EBT is it should not be used as wages, so to have your entire "salary" paid in this way would raise far more eyebrows than it did.

If you were offered two jobs by two employers:

1) Straight forward salaried position written down contract £40k per week giving you £20k per week take home

2) Contract for £40k per week giving £20k take home, plus promise of repayment free loan of £10k per week.

Which would you take?

I would take 2) as it was "BENEFITTING" me

Which is my point.

[bluepeter 5,627]

I would take 2) as it was "BENEFITTING" me

Which is my point.

The OP:

Can anyone clarify for me who actually benefitted from the EBT?

Was it the players that participated in the scheme who gained from a higher nett take home pay from their gross earnings?

Was it the club who met the players take home expectations (based on their gross less standard tax rates)but paid less to HMRC by utilising the EBT?

Or did both club and player benefit by "sharing" the savings made?

In those terms, I'd say the club. You can argue that a player benefits from being offered a higher wage, but that's obvious and true for any job, EBT or not. The benefit from the EBT was that Rangers could offer higher 'wages' to players but save large amounts of money on tax.

Of course the players benefit by having an increased wage, but they could command that wage EBT or not.

[TheLawMan 6,240]

The OP:

In those terms, I'd say the club. You can argue that a player benefits from being offered a higher wage, but that's obvious and true for any job, EBT or not. The benefit from the EBT was that Rangers could offer higher 'wages' to players but save large amounts of money on tax.

Of course the players benefit by having an increased wage, but they could command that wage EBT or not.

Yeah, BUT, if they could command that wage on a traditional contractual basis, why would they opt for a scheme where there is NO contract, NO guarantee and NO paperwork.

I cannot get my head around why a player would take a risk without a reward.

[Misteral 2,932]

But the players were not offered the higher wage on a contractual basis and/or could not demand them. Simply put it would be something like: No scheme you get 30K contract. With scheme you get 20K contract +20K scheme. With a take it or leave it approach by the club. After being convinced it was a legal scheme (and it may well have been anyway, we'll find out soon) the player takes option B, of course!

[bluepeter 5,627]

Yeah, BUT, if they could command that wage on a traditional contractual basis, why would they opt for a scheme where there is NO contract, NO guarantee and NO paperwork.

I cannot get my head around why a player would take a risk without a reward.

Because they wanted to play for The Rangers