HMRC launch appeal against Rangers EBT ruling

Published on 04/02/2013 15:47

HM Revenue and Customs (HMRC) has appealed against the tax tribunal that ruled in favour of Rangers Football Club’s use of Employee Benefit Trusts (EBTs).

HMRC claimed that the scheme, used between 2001 and 2010 to make nearly £50 million in payments to both players and staff in the form of loans exempt from tax, was illegal.

Rangers disputed the claim and a First Tier Tax Tribunal (FTT) ruled that the EBT scheme was not in breach of tax law, and the case will now be heard at a Second Tier Tax Tribunal (STT).

HMRC confirmed that it had been granted leave to appeal the FTT tribunal decision and that an appeal had been filed.

Should the dispute fail to be settled at the STT tribunal, the case could go all the way to the Supreme Court, in a process that could end up lasting for several years.

Rangers implemented the use of EBTs under the stewardship of Sir David Murray, who sold the club for £1 to Craig Whyte in 2011, during the dispute surrounding the tax liability.

Rangers entered administration in February of last year, having been forced by the HMRC over non-payment of tax amounting to around £14 million, whilst under the control of Mr Whyte.

Proposals for a creditors agreement allowing the club to continue were rejected by HMRC, before the administrators Duff and Phelps - appointed by Craig Whyte with the club £124 million in debt - sold the assets for £5.5 million, to a consortium led by Charles Green.