Tax Avoidance Or Tax Evasion

[TheLawMan 6,240]

With all the talk and furore around EBTs, cheating and Lord Nimmo Smiths decision of no sporting advantage I thought I would clarify a few things.

The simple difference between evasion and avoidance is that one is legal and the other is not. It is perfectly legal and acceptable to avoid tax by using one of the many loopholes in order to reduce your tax liability. Most, if not all, companies seek advice before doing so, however they dont always get it right.

Evasion on the other hand is illegal. This is where a company deliberately hides something, misappropriates their figures, undercuts income or over states expenses with the intention of misleading HMRC to reduce their tax liability. Or to put it another way. They CHEAT.

Now that we know the difference between the two, lets look at Rangers EBT situation. First thing first, the club took appropriate advice from, what was at the time, a so called expert. They also took legal advice on them. EBTs back in 2000 were very popular and widely used. I myself, was involved with 2 companies who looked at them but decided not to go down that road. As a Board member of both companies, I voted against them and was happy that we didnt implement them in light of the changes made by HMRC in later years.

The next and very important aspect to consider in the Rangers situation was disclosures. As above, evasion is when you hide something deliberately which is simply not the case here. The EBTs were disclosed to HMRC from day one. They appeared in every set of audited accounts and were in plain sight for everyone to see. Rangers were not trying to hide anything. We were not evading tax.

The EBT case has now been heard 3 times. HMRC have never in any of the cases asked the numerous judges to consider evasion. They have never suggested the club were evading tax. HMRC case and claim is that the scheme didnt meet the required standards of a compliant EBT scheme and as a result, they want additional tax to be paid. They have not asked for anyone to be charged, arrested or fined as a result of evasion, which would be the case if they felt the club had deliberately misled or evaded tax.

In all the summaries and findings, not one judge has suggested evasion, even when dissenting from decision that the scheme was ok.

To summarise all of the above, irrespective of the final outcome, there is no suggestion or charge that Rangers have done anything illegal. The final result may be that we got it wrong, but it will never be illegal.

This is a very important distinction when you consider the reason why some fans are asking for a new inquiry. The rabble rousers out there are pointing to a particular sentence in Lord Nimmo Smiths verdict as a key point for a new inquiry. LNS stated: "Accordingly we proceed on the basis that the EBT arrangements were lawful"

This, they state, is now defunct due to the latest verdict, prior to any appeal, however they are completely wrong on the basis of above. As outlined, irrespective of the final outcome, EBT arrangements are lawful. They are not illegal. No-one, anywhere int he UK, has been arrested or charged for operating EBT schemes, even when found to be doing so in an incorrect manner. The statement made by LNS still stands and will stand after any final appeal, upheld or not.

Interestingly enough, there was another lawful tax avoidance scheme used by various football clubs around the UK. This involved them bringing in tax experts to help their staff avoid tax by placing their money in Film schemes. These schemes were used by clubs to attract players to the club as they were able to explain to the players before they signed how they would make more money by joining these schemes. Like the EBT's, HMRC changed the rules and are now going back the way to get more tax paid. Nobody will be charged and nobody will be arrested. They were lawful schemes that avoided tax. They are not illegal. They were used by certain clubs to help them attract players. This was not cheating.

In the interest of balance and to highlight the difference between legal and not legal, I thought it best to give a hypothetical example of tax evasion.

Lets say you ran a football club and had anything between 40,000 and 60,000 fans coming through the turnstiles each week. Lets say, hypothetically speaking, you rigged the counters at the turnstiles to ensure that when you reported the official attendance, you state it is only 25,000 to 45,000. In doing this, you bring in 15,000 x £10 per head, hide the income from the accounts, filter it in elsewhere and avoid paying tax on £150k every second week. This is TAX EVASION. This is illegal. This is cheating.

Now imagine, you did this constantly for 10 years to the point where your own fans, the media pundits and the press used to laugh and joke about it, whilst winning leagues and cups. This is cheating.

Im old enough to remember the above allegedly happening somewhere in Scottish Football. I cant think who it was, though I am pretty sure the hypocrisy is looming large on it.

[Hoosier Ranger 1,554]

Was that from the RST or SOS?

[Bears r us 30,998]

I just posted the bit below a few minutes ago in your thread in the B & F.

I might be in a minority of one, but this is one thread I would like to see in the BEARS DEN.

[TheLawMan 6,240]

I just posted the bit below a few minutes ago in your thread in the B & F.

I might be in a minority of one, but this is one thread I would like to see in the BEARS DEN.

. That was why I done it.

[TheLawMan 6,240]

Was that from the RST or SOS?

Just from little ole me am afraid HR.

[Bears r us 30,998]

. That was why I done it.

I did wonder, but did not want to be so presumptuous.

[Hoosier Ranger 1,554]

Just from little ole me am afraid HR.

Excellent stuff TLM....excellent stuff.

[Big Al 55 9,311]

I'll have tax avoidance please

[dummiesoot 16,115]

Well done law man

[gmcf 34,645]

Excellent stuff TLM

[eejay the dj 31,964]

With all the talk and furore around EBTs, cheating and Lord Nimmo Smiths decision of no sporting advantage I thought I would clarify a few things.

The simple difference between evasion and avoidance is that one is legal and the other is not. It is perfectly legal and acceptable to avoid tax by using one of the many loopholes in order to reduce your tax liability. Most, if not all, companies seek advice before doing so, however they dont always get it right.

Evasion on the other hand is illegal. This is where a company deliberately hides something, misappropriates their figures, undercuts income or over states expenses with the intention of misleading HMRC to reduce their tax liability. Or to put it another way. They CHEAT.

Now that we know the difference between the two, lets look at Rangers EBT situation. First thing first, the club took appropriate advice from, what was at the time, a so called expert. They also took legal advice on them. EBTs back in 2000 were very popular and widely used. I myself, was involved with 2 companies who looked at them but decided not to go down that road. As a Board member of both companies, I voted against them and was happy that we didnt implement them in light of the changes made by HMRC in later years.

The next and very important aspect to consider in the Rangers situation was disclosures. As above, evasion is when you hide something deliberately which is simply not the case here. The EBTs were disclosed to HMRC from day one. They appeared in every set of audited accounts and were in plain sight for everyone to see. Rangers were not trying to hide anything. We were not evading tax.

The EBT case has now been heard 3 times. HMRC have never in any of the cases asked the numerous judges to consider evasion. They have never suggested the club were evading tax. HMRC case and claim is that the scheme didnt meet the required standards of a compliant EBT scheme and as a result, they want additional tax to be paid. They have not asked for anyone to be charged, arrested or fined as a result of evasion, which would be the case if they felt the club had deliberately misled or evaded tax.

In all the summaries and findings, not one judge has suggested evasion, even when dissenting from decision that the scheme was ok.

To summarise all of the above, irrespective of the final outcome, there is no suggestion or charge that Rangers have done anything illegal. The final result may be that we got it wrong, but it will never be illegal.

This is a very important distinction when you consider the reason why some fans are asking for a new inquiry. The rabble rousers out there are pointing to a particular sentence in Lord Nimmo Smiths verdict as a key point for a new inquiry. LNS stated: "Accordingly we proceed on the basis that the EBT arrangements were lawful"

This, they state, is now defunct due to the latest verdict, prior to any appeal, however they are completely wrong on the basis of above. As outlined, irrespective of the final outcome, EBT arrangements are lawful. They are not illegal. No-one, anywhere int he UK, has been arrested or charged for operating EBT schemes, even when found to be doing so in an incorrect manner. The statement made by LNS still stands and will stand after any final appeal, upheld or not.

Interestingly enough, there was another lawful tax avoidance scheme used by various football clubs around the UK. This involved them bringing in tax experts to help their staff avoid tax by placing their money in Film schemes. These schemes were used by clubs to attract players to the club as they were able to explain to the players before they signed how they would make more money by joining these schemes. Like the EBT's, HMRC changed the rules and are now going back the way to get more tax paid. Nobody will be charged and nobody will be arrested. They were lawful schemes that avoided tax. They are not illegal. They were used by certain clubs to help them attract players. This was not cheating.

In the interest of balance and to highlight the difference between legal and not legal, I thought it best to give a hypothetical example of tax evasion.

Lets say you ran a football club and had anything between 40,000 and 60,000 fans coming through the turnstiles each week. Lets say, hypothetically speaking, you rigged the counters at the turnstiles to ensure that when you reported the official attendance, you state it is only 25,000 to 45,000. In doing this, you bring in 15,000 x £10 per head, hide the income from the accounts, filter it in elsewhere and avoid paying tax on £150k every second week. This is TAX EVASION. This is illegal. This is cheating.

Now imagine, you did this constantly for 10 years to the point where your own fans, the media pundits and the press used to laugh and joke about it, whilst winning leagues and cups. This is cheating.

Im old enough to remember the above allegedly happening somewhere in Scottish Football. I cant think who it was, though I am pretty sure the hypocrisy is looming large on it.

LM Excellent post mate .You almost sound hard core with that one tonight

[siddiqi_drinker 14,635]

Excellent article which 100% deserves to be in the BD. Makes one wonder why the courageous investigate journalists that Scotland is famous for could not pen such a piece.

[offshoreworker 204]

might have done the wrong thing lads but put it on twitter f/b as well

for all the bears to think what they they think ??? watp

[siddiqi_drinker 14,635]

might have done the wrong thing lads but put it on twitter f/b as well

for all the bears to think what they they think ??? watp

Put it on the DR ND the Scotsman as well should upset a few bead rattlers

[offshoreworker 204]

Put it on the DR ND the Scotsman as well should upset a few bead rattlers

[Heshootshescores 1,905]

Superb post.

[there'sonlyoneamoruso 1,724]

Excellent stuff. Send it to the Scottish media outlets.

[Bears r us 30,998]

Excellent stuff. Send it to the Scottish media outlets.

[kaiser1041 9,088]

Really good read well played op

[Misteral 2,932]

An excellent post, OP though I seem to remember that the initial case was that the scheme was administered in the wrong way rather than HMRC arguing it was an illegal scheme. Maybe this is just semantics or my memory is a bit fuzzy.

[TheLawMan 6,240]

An excellent post, OP though I seem to remember that the initial case was that the scheme was administered in the wrong way rather than HMRC arguing it was an illegal scheme. Maybe this is just semantics or my memory is a bit fuzzy.

Not fuzzy. Pretty much spot on. The case is listed as Tax Avoidance on the court papers. Had the scheme been administered correctly, HMRC would have had less of a case. There argument has pretty much been that from day one.

[Mazy74 57]

Well said LawMan !

[legalbeagle 3,734]

Trying to get those who wilfully wish to misunderstand to get the truth is an uphill struggle. And for some reason Scottish football authorities have been scared of the baying mob for too long to remember what it is like to be precise and just follow their own rules.

[kelvd1873 7,397]

Fantastic, explains everything in plain English!!

Can we have this first post archived Admin for use of the forum members whenever the needs arises?

[Gazza1212 1,212]

With regards to the op and given the countless hours of video that clearly captured the full stands throughout the decade in question, I wouldn't have thought it too difficult to have experts in such fields to Analize the "evidence" and give a clearer indication of the true attendance figures then compare them with those submitted at the time.

As correctly stated this was treated as something of a joke back in the day. I'd be willing to wager a small bet though that should anybody be prepared to make a real fist of any such investigation then nobody would be laughing anymore.

Just a word of caution though, although the club in question were by far the worst offenders at the time Id be very surprised if they were alone in smudging the truth.