05 November 2015

BTC: You can have your own opinion, not your own facts


by Andy McKellar | Editor Emeritus

The bizarre world of Scottish football has once again been enveloped with the kind of hysteria and hyperbole that accompanies just about any Rangers-related story these days after it was announced yesterday that HM Revenue & Customs had been successful in their appeal in what has become known as the “big tax case."

This was a significant victory for HMRC, though not as significant as it has proved to be for those moon-howlers who have been shouting about cheating Sevco zombies – or something of that ilk – for the past few years. They confuse themselves at the best of times.

These same people of course were the ones shouting about cheating and title-stripping back when previous Tribunals found in favour of the Murray Group and Rangers. The result mattered not a jot. This campaign has been ongoing and, sadly, was almost brought to fruition by the very football authorities charged with running and protecting our national game via its outrageous Five-Way Agreement. Now there’s a scandal if anyone in the media can be bothered to revisit it.

That, you will recall, was before the SPL eventually decided to allow some due process to take place when they tasked an independent commission with ruling on Rangers’ use of EBTs and the existence of ‘side-letters’ to playing staff. And the results were clear.

Although the Club was found to have been in breach of the disclosure rules, the verdict was that no players were ineligible to play and that no unfair sporting advantage was gained. No sporting sanction was therefore applied.

HMRC’s recent success does however appear to have opened that particular can of worms again. Football phone-ins didn’t hesitate to launch into the great cheating debate with callers unsurprisingly redeveloping their bloodlust. Jealousy, after all, is a terrible thing–we haven’t come to expect anything else.

It is probably worth clearing some things up before we go any further:

•Rangers, under the operation of the old company, paid approximately £47 million into sub-trusts for players and other staff over a period spanning a decade. These "loans," as they were intended to be, were deemed by the Court of Session to be treated essentially as disguised remuneration, meaning tax and national insurance liabilities should have been paid.

•We should note however that £47 million is not the relevant figure when discussing the matter of tax. In reality, Rangers’ tax bill at the time, assuming a 40 percent rate of a tax and a comparatively small National Insurance liability, would have averaged out at just below £2.5 million per year based on the payments made over the decade in question. And that’s before you consider that the largest beneficiary was David Murray himself, not a player providing on-field success.

When you remove the hyperbole, misreporting and general hysteria surrounding the whole thing, add in a bit of context for good measure, you’re not left with the same scandalous outcome that our many detractors would desire.

Rangers’ turnover during the ten years in which the scheme was operated was, on average, in excess of £50 million per year. Furthermore the club benefited from funding not included in that figure provided by the like of Dave King and of course from David Murray himself. The club invested as much as £14 million in our state-of-the-art training facility. So, in all honesty, < £2.5 million in any given year can be seen to be pretty insignificant in the grand scheme of things. We made more net profit than that from our retail operations alone for example.

Once you factor in the large costs associated with setting up and operating the Employee Benefit Trust scheme – and believe me they don’t come cheap – and deduct that from the tax liability saved, the truth of the matter is that the “financial doping” you have become so accustomed to reading about just wasn’t on the same scale that many would have you believe.

The media have papers to sell and online hits to chase so it shouldn’t perhaps come as a surprise to see exaggeration of the kind we have witnessed in recent years. But the above information is readily available and there for those who wish to look beyond the madness and find themselves some facts.

Did Rangers benefit at the time? Yes, undoubtedly. But how many clubs across the UK and beyond have used and continue to use tax avoidance schemes to their benefit? Are all these clubs effectively ‘cheating’? Well, I’ll leave that to people more intelligent than myself but what can be observed is we only seem to hear about it in the Glasgow goldfish-bowl. Perhaps a cinema production company or a dozen could make a film of it? Assuming they make any films at all.

The SPL’s independent commission also clearly stated that it is not a breach of the SFA or SPL rules for a club to arrange its affairs so as to minimise its tax liabilities. This, regardless of yesterday’s verdict, was clearly what Rangers were attempting to do. And remember of course that we are still awaiting confirmation on whether that verdict will be appealed and taken higher up the legal ladder. I can only assume it will be.

The damage caused to the Club's reputation by this scheme has undoubtedly been huge. This was perhaps proved during the summer of 2012 which consisted of a melee of hatred aimed at Rangers as it attempted to pick itself up from the financial crash caused by the disastrous tenures of David Murray and Craig Whyte.

It has to be said however that the faux outrage and the selective morality is absolutely astounding when it comes to the hysterical coverage of Rangers.

Those who wish to see our titles stripped will need to make the argument that we gained an unfair sporting advantage, something which the SPL’s independent commission categorically denied. They will attempt to demonstrate that we used money we didn’t have to achieve the success that we did.

Again, the selective reasoning is rather amazing. If that is the basis of their argument then why has their ire not been aimed at the likes of Hearts and Dundee, two clubs who, relatively recently, have undoubtedly spent money they didn’t have. Their own insolvency events prove that beyond doubt.

The difference between those situations and Rangers’ insolvency is simply to whom the debt was owed. Hearts’ majority creditor for example was Ukio Bankas meanwhile HMRC were not a majority creditor at Dundee. None of that changes the fact that each club, within their own circumstances, lived outwith their means. Yet only one club (or perhaps two if you include “Sevco” in your own little fantasy world) is the target of various accusations. Logic clearly has no place here.

We may not be able to stop the lies, but we should be able to challenge them. It’s clear that the objective of the mentalists is not fairness or justice or anything of the sort. The faux morality is laughably transparent and it’s abundantly clear that’s simply because Rangers are involved.

As the saying goes: you can have your own opinion but you cannot have your own facts. And you most certainly can’t have our titles.

8 comments:

  1. Totally agree with the tax scenario of 2.5 million. We , the fans , were absolutely in the dark about how all these financial machinations were unfolding and engulfing OUR club during this tumultuous era. A ten year or twenty year payback scheme could have been mutually agreed between the Revenue and Rangers. Common sense is the Session Lords buzz phrase ! Where and when was it used by HMRC and David Murray ? Never. The unanimity displayed by our support recently should be harnessed and utilised with the financial clout at our disposal. Leaders within our support should be thinking outside the box but very much within the ' common sense ' law as described by The Learned Ones. The law has been described as an ass and the donkey is somewhat known for its obstinacy and stupidity . Let us join together and beat the ill informed , nonsensical and jealous hordes who know nothing but hatred for our unique and everlasting club. In fact the donkey is an Einstein in comparison to the aforementioned !!

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    1. Absolutely, anyone would think the cash was a deciding factor in players signing which could never be the case and when you also consider a fair amount of these players weren't outstanding like Capucho or Vanoli and Ball and the fact that Celtic won MORE leagues than us at this time tells the story.

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  2. Another interesting fact our so called national media is failing to report is the reaction of some in the world of accountancy and tax law who see this latest judgement as being flawed and outrageous as it seems to overturn sound and agreed legal precedent. They are opinion that it must be challenged. Not that I support tax avoidance but it demonstrates again how they love to choose their own facts.

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  3. Another interesting fact our so called national media is failing to report is the reaction of some in the world of accountancy and tax law who see this latest judgement as being flawed and outrageous as it seems to overturn sound and agreed legal precedent. They are opinion that it must be challenged. Not that I support tax avoidance but it demonstrates again how they love to choose their own facts.

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  4. Looks like Rangers have employed Tony Bliar to write for them. You can apply any amount of spin you like to this; the fact is that if this Tax ruling sticks there is a strong argument for stripping titles. Even if the SFA decide it's more trouble than it's worth, it'll be hard for even the loyalist of loyal EBT Deniar to believe that any silverware accumulated during the period of illegally high affluence for the former Govan giants isn't tarnished

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    1. What a complete knob you are. The SFA didn't decide anything regarding the titles won during the EBT years. The panel was independent, INDEPENDANT. I'll say that again because you seem a little dense. INDEPENDANT.
      "Rangers FC did not gain any unfair competitive advantage from the contraventions of the SPL Rules in failing to make proper disclosure of the side-letter arrangements, nor did the non-disclosure have the effect that any of the registered players were ineligible to play, and for this and other reasons no sporting sanction or penalty should be imposed upon Rangers FC."
      So now you can get back on your knees and start praying that Peters SFA can find a way around their own handpicked "independent" panel’s judgment. Maybe while there you should say a prayer that Audit Scotland doesn’t find any irregularities in their investigation into Lennoxtown. What RFC did was immoral, what big Pete and EDC appear to have done constitutes state aid. Why do you think Dermot Desmond is telling Pete to shut it, and Lennon left the club complaining about stuff he couldn't elaborate on? You can't throw mud without getting your hands dirty and you lot are so dirty........

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  5. Great article - Dont forget the simple argument here though....the players might have chosen to still play for Rangers if EBT was not available or Rangers could have chosen to offer them more money if persuasion was needed....

    This eliminates the unfair competitive advantage argument and ex-players can help by promoting this angle....

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Keep it civil, lads.