THE biggest date on Rangers’ calendar this week is not necessarily Saturday’s powderkeg Scottish Cup fifth-round encounter against Dundee United at Tannadice.
It may be on Tuesday when the much-delayed independent commission, set up to rule on whether the “oldco” Ibrox club were guilty of improperly registering players between 2001 and 2011, finally begins.
The contentious issue has become known as the “EBT case” and relates to the fact that the Employee Benefit Trusts operated by the club resulted in players being given “side letters”, which some have termed second contracts, detailing sums paid into players’ EBTS for bonuses and appearances.
If it is judged that these side letters referred to payments that were not disclosed to the authorities, one of the 18 sanctions available to the commission, set up by the Scottish Premier League, is voiding the registrations of the players involved. A consequence of that would be all results achieved with these players being scrubbed, which could mean Rangers being stripped of the five titles they won during the period under scrutiny.
Rangers manager Ally McCoist, in common with his club, who have refused to co-operate with what they perceive as a witch-hunt, believes the commission should have been disbanded once a tax tribunal appeal found in the club’s favour in November. Then, the sums not detailed in the players’ (and others’) SPL contracts were adjudged to be non-discretionary loans not liable for tax and national insurance.
The fact the commission is still going ahead suggests to McCoist that there are dark forces at work. “My own opinion is that I’m a wee bit disappointed [it is going ahead]. I think it has been driven by individuals with their own agenda, to be quite honest with you,” said McCoist, who refused to name names because he “could start a lot of trouble” if he did. Let’s face it, the names of SPL chief executive Neil Doncaster and Celtic chief executive Peter Lawwell would surely not be far from his lips if he had trouble in mind.
“That’s only my own opinion on it, how I feel about it, and I just hope that common sense will prevail,” added McCoist. “Certainly the title stripping is a non-starter for me and a non-starter for our football club and indeed our supporters. So we’ll just have to wait and see what happens. I’m becoming immune to worst possible outcomes. I would react to it hopefully in positive manner. I might not be happy with it but you’d have to react to whatever judgment was made, and take a stance on it. We would certainly do that. It might be positive, you never know, and it might not suit us. A decision will be made and we’ll have to react to it.”
The case will be heard by a three-man panel headed by Lord Nimmo Smith, who will be joined by fellow QCs Nicholas Stewart and Charles Flint. They will rule on whether Rangers were in breach of SPL rules that state all payments relating to player activities must be set out on the contracts lodged with the football governing body.
Originally due to take place last year, the hearings were delayed by a car crash involving Harper MacLeod lawyer Rod McKenzie, who had gathered the evidence. Now a complicated matter has become all the more muddied by the tax tribunal appeal ruling in November over a £48 million demand from Her Majesty’s Revenue and Customs for underpayment of taxes by Rangers.
Five players were decreed to have been liable to tax in relation to EBTs – they were forwarded monies when not receiving their loans in time – but it has been claimed these sums were detailed in the contracts lodged with the SPL.
For those such as former Rangers owner David Murray, who introduced the EBT scheme, the HMRC appeal verdict exonerated the club over any accusations of football rule-breaking. “The SPL rules variously required disclosure of all contract of service matters and all payments from a club to a player,” he said in November. “It would now appear that these are to be rewritten to incorporate non-contractual loans from independent third-parties and other non-contractual matters.”
Not necessarily a helpful intervention, since payments to players from, or via, third parties (which in this case were the Trusts that the Murray Group paid in to for players to then apply for loans from) are also forbidden under football rules.
Just one more added complication for the independent commission. In the tax tribunal’s 145-page ruling, one judge, Heidi Poon, took the view that the loans had “no commercial reality” and that they therefore were salary payments, designed to be shielded from tax.
The tribunal, which described the EBT scheme as a form of “aggressive tax avoidance”, also highlighted a number of anomalies. One was that Rangers applied for insurance on an injured player on the basis of what his salary and his loan benefits amounted to, combined.
No-one seriously believes that Rangers only provided loans to players for bonuses and appearance money. At the tax tribunal, players themselves stated they viewed EBTs as part of their salary and that they would not have signed for the club otherwise.
What Rangers did successfully was create the necessary paper trail to take advantage of a since-closed loophole and abide by tax legislation. Football legislation is not necessarily the same.
It would be no perversion of the facts if Lord Nimmo Smith and his panel took the same view as that expressed by Poon.
There is very recent precedent for football following a different path from law. John Terry was cleared of racially abusing Anton Ferdinand in the courts but was then given a four-match ban for the offence by the English FA.
The likelihood is an outcome that brings a wrist-slap for Rangers, so avoiding any real furore.
Whatever the outcome of the independent commission set up by the SPL, McCoist will see it the context of the past year.
“Since Valentine’s day last February [when the old club went into administration],” he said. “It has simply been unbelievable what has happened.
“If someone had handed you a blank sheet of paper and a pen there is just nobody who would have come up with this. In that respect nothing else could really surprise us.”