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November 20, 2012 8:03 pm
Rangers football club has won a high-profile tax case over loans to footballers from an employee benefit trust, in an appeal that will “substantially” reduce the club’s £36.6m bill for tax and national insurance contributions.
But the judges were unable to reach a unanimous verdict and Revenue & Customs said it was considering an appeal.
In the majority decision, the tribunal ruled against the Revenue’s argument that there had been “an orchestrated scheme” whereby payments to players from the trust amounted to wages and, therefore, should have been taxed. It said loans were discretionary even though they were almost invariably granted.
But in a dissenting opinion, Heidi Poon, one of the judges, ruled that payments from the trust should be construed as “emoluments” for the purposes of tax. She said there appeared to be a layer of “camouflaged clothing” over the real arrangements in the case.
Murray Group, a metal, mining, property and investment company that owned Rangers, was appealing against a bill relating to the employee benefit trust that totalled £46.2m across five companies.
In a statement, Murray International Holdings said it was pleased with the judgment that left minimal tax liability, after “an exceptionally long, difficult and expensive process”.
The Revenue said: “We are disappointed that we have lost this stage of the court process and we are considering an appeal. The decision was not unanimous and the diligence of HMRC[the Revenue] investigators was acknowledged by the whole tribunal. HMRC is committed to tackling avoidance and it is right that we challenge the type of avoidance seen in this case.”
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