“Tax Avoidance is a Right” Proclaims SIr David Murray. “No it’s not”, Is Reply

Last week, Sir David Murray emerged from his bunker to issue a statement via the Press Association. RTC commented in detail regarding elements of the statement here on the Scottish Football Monitor.

I think the statement is a masterpiece in answering charges that have not been made, and accusations not been laid. It also includes a statement which, whilst not original, might be seen as the epitaph for the demise of Sir David’s Rangers – “Tax AVOIDANCE is a right.”

Sir David also risks offending even further the fans of his former team by referring the “new” Rangers and “Rangers Football Club” rather than “The Rangers Football Club”.

And it is always a good day when one can quote the great American judge Learned Hand.

Sir David Murray’s statement in full is shown below, with my observations in bold interspersed through it. It can be seen at the link above on the STV website.

—————————————————

I have decided to issue this statement because of the concerns which I have at the continuing attempts to inflict further punishment on Rangers Football Club.

Get with the programme Sir David. It is THE Rangers Football Club now.

“Continuing attempts to inflict further punishment”? Bearing in mind that Sir David holds some responsibility for the financial circumstances of Rangers, and at least according to Billy Dodds, was directly involved in the operation of the alleged EBT/contract/side letter issue, one might see why he would wish everyone to “move on”.

 

Sir David Murray emerges to stoutly defend his stewardship

While the “Newco” Rangers was rejected for membership of the SPL on the publicly stated grounds of sporting integrity, I would question whether this was the underlying motive for many who took this decision. I am not totally convinced by the explanation that they were reacting to the opinions of the supporters of their individual clubs. This, in my opinion, is a suitable answer to cover many other agendas.

What agendas, Sir David? Care to enlighten us? After all a number of the people in control of the SPL clubs were there whilst you were still involved at Rangers. Is this personal animosity to you, or to Mr Green, or to Rangers as a business or as an institution?

Calling the heads of the SPL clubs liars, at least by implication, seems a rather aggressive stance to take.

Surely, as a successful businessman, Sir David accepts that the customers’ views are important?

 

I applaud the decision of the SFL to accept Rangers for membership and respect the decision of the member clubs of the SFL to admit Rangers to its Third Division.

Interesting that the word “Newco” has vanished between paragraphs. I am also sure the SFL clubs will be delighted that Sir David, a man with no connection now to Scottish football, ”respects” their decision to place the Rangers Football Club in SFL3.

 

The problems at Rangers have brought no credit to Scottish football and are a tragedy for the Club and for all those connected with it and who support it. They cannot be condoned and it is appropriate that there should be a proportionate penalty for the Club for the events over the last year.

Let’s break this paragraph down.

1                    The problems at Rangers have brought no credit to Scottish football – agreed.

2                    and are a tragedy for the Club and for all those connected with it and who support it – yes, but a tragedy not caused by outside factors, but by the actions of those, including Sir David, who ran the club

3                    They cannot be condoned – one assumes “they” refers to the problems, and therefore it is good to see Sir David not trying to minimise the adverse effects of what he and his colleagues and successors did

4                    and it is appropriate that there should be a proportionate penalty for the Club – I am delighted to see such a responsible attitude from Sir David, facing up to responsibility and impliedly accepting same. The “mea culpa, mea culpa, mea maxima culpa” reaction is the first step on the way to forgiveness.

5                    for the events over the last year – oh. It was all going so well, wasn’t it? But apparently the events that brought no credit to Scottish football, and cannot be condoned, only took place over the last year. I wonder when Sir David sold up? Yes…just checking my notes…over a year ago.

So what seemed, until the last few words to be an excellent step on the road to redemption for Rangers is instead anther move to shift all the blame onto Mr Whyte. That is not to suggest that the “Motherwell Born Billionaire” © Daily Record 2010 is blameless – far from it – but I do not think any reasonably informed observer could suggest that all the fault lay on the Whyte regime.

The culprit, according to Sir David

However, I urge all those connected with Scottish football to bring this sad affair to a close – now. Bayoneting the wounded is neither justified nor proportionate.

“Bayoneting the wounded”?

As a side note I would commend the full article linked here from the Western Front Association on “The Cult of the Bayonet in the British Army on the Western Front in the Great War” by Dr David Payne.

In the piece he states:-

“During an advance on the battlefield, some British battalions had the deliberate policy of bayoneting the wounded enemy en passant to neutralise them. And there are reliable reports that wounded, and wound-faking, enemy soldiers fired at the backs of advancing British soldiers. There are also personal accounts by soldiers of both sides of bayoneting unarmed POW’s, in and behind the lines, although this was rarely admitted officially by either side.”

At least in the circumstances outlined above such an act could be justified and proportionate, as a “risk management” tool, though not referred to in such a bland “management speak” way. In addition, it was common throughout the time that use of the bayonet was prevalent on the battlefield for fatally wounded soldiers to be dispatched by a swift thrust from a bayonet, as an act of mercy.

I suspect, though I have not reviewed the Geneva Conventions, that such acts today would be seen as illegal, and probably murder, or at least culpable homicide, but, as Dr Payne points out, in the heat of battle, and literally to protect one’s own back, the tactic was used.

In any event it is an emotive phrase.

Over the years Sir David cultivated media contacts, leading to the now infamous “succulent lamb” label used to refer to compliant journalists. Indeed a piece in “The Drum” last year said the following:-

“The Drum  understands that Craig Whyte has no intention of being as readily available to the media as Sir David Murray who was noted for his approachability by the media and never failed to return calls to journalists on Rangers FC business.”

Media House, run by Jack Irvine, the former newspaper editor, and doyen of the PR industry in Scotland, acted for Rangers under Sir David. IT was taken on too by Craig Whyte, as mentioned in the Drum article. When Rangers Football Club PLC went into administration, Media House was amongst the unpaid creditors.

Jack Irvine, eminence grise

Charles Green is believed to have made use of its services too.

Is this statement from Sir David one prepared with the assistance of Media House? Whereas, to non-PR people, the feeling might be that keeping one’s head down out of the firing line is the prudent course, Media House have been hugely successful over many years by choosing the correct time to go on the offensive for their clients. Indeed the piece from The Drum is an example of that, including the quote from Mr Irvine in connection with the blaming of Rangers for sectarian issues in Scottish football:-

“I have a message for those who would denigrate Rangers: if you stop telling lies about us, we’ll stop telling the truth about you.”

And for Sir David, who is part of the problem, for all he denies it, to demand that the “sad affair” is brought to an end “now” is an aggressive stance to take. Clearly he would wish an end to an investigation by the SPL which will consider his stewardship of the team over many years. Is this a self-interested position? Yes, and he is quite entitled to be self-interested. Is it appropriate to present it as a plea from above the fray, almost as if he is simply a concerned fan, rather than the former owner? That too seems a brave PR strategy to take.

(Mind you, Jack Irvine and his colleagues are hugely successful in the world of PR, and I am not, so clearly they have a very good idea about what tactics to use.)

 

Nevertheless, I cannot be anything other than angered at the suggestion that Rangers should be stripped of titles or other competition victories. This suggestion is an insult to the staff and players who achieved these successes thanks to skill, hard work and commitment and for no other reason.

No one disputes that titles and trophies were won on the field of play. This is not a Marseilles situation where attempts were made to bribe opposition teams or players.

However the words of the SPL Chief Executive, Neil Doncaster, make things clear, I think.

“This (financial fair play) is all seen as important for one key reason: because any club that is spending more on players than they can afford, is automatically gaining a sporting advantage over every other club it competes with. … The logic behind the principle however is, I think, broadly sound. And it is this same principle that explains the position of the SPL.

To turn a blind eye, to allow clubs to continually fail to make prompt payments as they fall due, would be to allow those clubs to gain an unfair sporting advantage over all those other clubs that pay their players, the taxman and other clubs on time.”

 

It is also an insult to the thousands of Rangers supporters who spent their hard-earned money to support the Club they love.

What about the 26,000 small shareholders, whose investments were rendered worthless by a combination of the actions of Mr Whyte and Sir David?

How is enforcing the rules an insult to the fans of Rangers, but not enforcing them not an insult to everyone else?

 

I hope that those presently in charge of Rangers show sufficient resolve when it comes to resisting this move, despite the incentives being offered to do otherwise.

“Presently”. An interesting word. To me it implies that the custodianship of Mr Green is seen as a transitory one. Presumably there are major discussions going on in private rooms about investment in Rangers? Does Sir David know the exit strategy for Mr Green? Could he be part of it?

A question for Mr Green to which Sir David might know the answer?

I believe that there is a misconception which may lie behind this suggested penalty and accordingly it is my duty to clarify certain matters.

Good! Let’s hear it!

 

During my stewardship of Rangers no rules were breached or circumvented and I reject and resent any suggestion that anything was done which amounted to cheating.

Sir David thinks no rules were broken. The SPL think there is a prima facie case that they were. That is why an Independent Commission is being established to find out the truth. I wonder if Sir David will make himself available to attend as a witness to explain to the Commission how everything was above board, or is this statement intended to be his contribution?

 

As was required of a PLC, all accounts were fully audited and made available to all entitled parties. All football rules were complied with. All enquiries from entitled parties or organisations were answered.

As has been pointed out, despite the duty on teams to provide accounts to the SFA and SPL, these organisations did not have the money, or were unwilling to spend the money, carrying out their own audits. They clearly relied, as they would normally be entitled to, on the audits carried out by the auditors for the purposes of the Companies Acts. However the requirements of football rules meant that some matters were not covered specifically by the audit which was carried out.

An example relates to the EBT payments. This was noted in the relevant annual and audited accounts. However it did not distinguish the payments depending on the position of the recipient. Therefore the beneficiary could have been Aggie the Tea Lady, Sir David, or the entire first team. The published and audited accounts say nothing about that.

To say that all enquiries were answered is surely true. The issues are (a) if they were answered correctly and (b) what about the questions which were not asked.

 

To those who criticise certain actions undertaken on behalf of the Club, I suggest that they familiarise themselves with all relevant rules before they come to any conclusions or express any opinions.

This is particularly relevant to the SPL rules where it would appear that there are efforts to retrospectively rewrite laws to incorporate items not previously covered.

The SPL rules variously required disclosure of all contract of service matters and all payments from a club to a player.

It would now appear that these are to be rewritten to incorporate non-contractual loans from independent third parties and other non-contractual matters.

The Rangers position is that the payments by way of EBT were all discretionary loans from the independent and offshore trusts. However Mr Dodds, as referred to above, contradicts that, as did the information dug out by Mark Daly for the second BBC Inside Story programme on Rangers.

The general understanding of the EBT scheme as operated for the benefit of the Rangers players is that it was done in such a ham-fisted way that the tax reductions it was meant to achieve were not accepted by HMRC on the basis that it was in fact clear there were contractual payments by the employer, rather than non-contractual loans by an independent trust.

I don’t see any attempt by the SPL to re-write the rules. Instead, and belatedly, they are seeking to apply them. Prima facie there is evidence that payments were made to players by or on behalf of Rangers which were not disclosed as part of the registration process, and that there were “side letters” regulating these arrangements which also were not made available to the football authorities.

Side letters?

Thus there were undeclared payments, based on “contracts” which were not disclosed.

Of course the Rangers FC has the right to dispute the charges, as it clearly will do. That is why a commission has been established to determine the issue.

 

If this is the case then press comment over the past few years would appear to indicate that several clubs other than Rangers may well have fallen foul of the soon to be changed historic laws.

“Whataboutery” from Sir David.

 

It would also appear that the SPL is once again seeking to invest itself with a power of retrospective penalty beyond that prescribed in its own rules.

No they are not.

 

Much has been said and written about EBTs. It should be noted that the tax treatment of these is an issue as yet unresolved and it is wrong to prejudge the outcome. It must be stressed that the tax tribunal will determine the appropriate tax treatment in respect of the arrangements operated.

It is possible that the Tax Tribunal could find against HMRC and that, on the same evidence, the Commission find Rangers guilty. That is because the issues facing both tribunals are different. The issue for the SPL Commission is not whether Rangers paid the correct tax. That could form a separate disrepute charge at a later date of course.

 

This is not a criminal matter and there is presently no question as to the legality of these schemes.

This is not a depiction of anyone with any connection at all to Ibrox Stadium

Agreed that it is not a criminal matter. However the legality of the operation of the MIH scheme is very much at issue.

 

Rangers agreed contracts of employment with its players (and staff). The EBT scheme involved the contribution of funds into an offshore discretionary trust managed by independent trustees. The trustees could and did make loans to individuals carrying interest with scheduled repayment dates.

Sir David knows about how these operated. Perhaps he could tell us. What were the scheduled repayment dates? What rate of interest was chargeable? Who paid the trustees? How did Rangers decide how much to put into these discretionary trusts? How much money is left in any of them where the players or staff left Ibrox years ago?

Why would anyone willingly seek a repayable loan, rather than payment of salary or bonus, unless they knew, as per a side letter, that the loan was never going to be repaid? Did the trustees produce these side letters, which would of course hopelessly compromise their independence and the “loan” status of the payment?

Did the side letters emanate from Ibrox where, on paper, there would be no control over the so-called independent trustees?

 

There was no contractual or beneficial entitlement to the funds on the part of any individual and the monies paid to EBTs were not “remuneration” in terms of any rules applying to the Club.

That is what the Tax Tribunal is pondering and as a related but not identical question what the Commission will decide upon. Bearing in mind that the appeal against the HMRC assessment has been proceeding for over four years, it was unlikely Sir David would raise his hands in surrender in this statement by admitting that the payments were remuneration! That would have been a story!

 

Since 2001 when the EBT scheme was introduced, the amounts contributed were disclosed in the audited financial statements of the Club. These audited accounts were provided to the SFA and SPL as required.

As I and others have mentioned before, the accounts did not divide up the payments. There was a lump sum stated therein. How could anyone looking at the accounts know to whom they related?

In any event, if the payments were not contractual, and not remuneration, why did it matter whether they were declared or not? Surely it only matters if they were contractual payments!

The SFA and SPL did not have the resources to audit the accounts of all of the members. Maybe it should, and maybe they will, going forward. That does not excuse a breach of the rules however.

 

As the law stands, it is the right of every taxpayer to minimise his tax liability. For example, taxpayers are entitled to maximise contributions to pension funds and benefit from the resultant tax allowances. Tax AVOIDANCE is a right. It is tax EVASION which is a crime.

What did Sir David think of the recent furore about Jimmy Carr, condemned by the Prime Minister for his immoral tax affairs, even though there was no apparent question of legality about his scheme at all? Does Sir David accept, in light of the stance taken by the Prime Minister, that the use of EBTs might at best have been immoral?

Jimmy Carr pondering the morality of his tax affairs

I also think that the line “Tax AVOIDANCE is a right” might become a notorious legacy for Sir David.

It is a misquote, or more accurately a simplified quote, from Judge Learned Hand, in the case of Helvering v. Gregory, 69 F. 2d 809, 810 (2nd Cir, 1934), aff’d 293 U.S. 465 (1935).

The full relevant quote is in fact as follows:-

“[A] transaction, otherwise within an exception of the tax law, does not lose its immunity, because it is actuated by a desire to avoid, or, if one choose, to evade, taxation. Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; here is not even a patriotic duty to increase one’s taxes.”

There is therefore, one might suggest, a difference between saying that it is a right to avoid tax, and the judge’s statement that one may arrange one’s affairs to lower tax. There is quite a difference in scale and emphasis.

Indeed in the Helvering case, Judge Learned Hand toned down the “pro-tax avoidance” message quoted above by saying:-

“But the meaning of a sentence may be more than that of the separate words, as a melody is more than the notes, and no degree of particularity can ever obviate recourse to the setting in which all appear, and which all collectively create.”

As Professor Henry Ordower, of St Louis University School of Law commented in his piece in which can be found here:-

“This limitation on tax planning requires that the substance of the transaction, rather than its form, control the tax outcome. The outcome must match the intention of the taxing statute that otherwise applies to the transaction’s form. Transactions lacking economic and business purpose, other than to capture a tax advantage by meeting specific statutory requirements, fail this judicial test.”

I suspect that the “form over substance” v ”substance over form” debate would have occupied some time in the Rangers EBT Tax Tribunal.

Judge Billings Learned Hand, four times winner of best name for a Judge competition, and undefeated champion in the Judicial Eyebrow Stakes

As an aside, Judge Learned Hand is one of the most distinguished of American jurists, (as well as having one of the best names for a judge ever). More can be read about him here, with apologies for using Wikipedia as a source.

 

In December 2010, as a result of legislation changes introduced by HMRC, EBTs were rendered tax inefficient. Thereafter the Club made no further contributions to EBTs. For the avoidance of doubt, many thousands of employees in many areas of business and commerce have benefited from EBTs.

It was efficiency, not morality or legality that led to Rangers stopping using EBTs.

 

Rangers sought only to provide financial security for players (and staff) within the rules of law and football. To suggest that this amounted to cheating in the sporting context is an allegation which is without any foundation.

In the spirit of politics, I would refer the gentleman to the answer given before – namely the remarks by Neil Doncaster about financial fair play.

 

I, of course, wish the “new” Rangers every success for the future. I have no doubt that the present generation of players and staff will make a positive and beneficial contribution to the SPL and, in due course, return the Club to a position of pre-eminence in Scottish football.

And there you go again Sir David – it is not a “new” Rangers. It is Rangers Then, Rangers Now, Rangers Forever. All this talk of “new” Rangers will lead to you being condemned by the fans of eternal Rangers.

 

However, I am determined to support those who served the Club with such dignity and integrity during my stewardship.

And whilst under your stewardship a huge tax bill and massive debt was run up?

 

Posted by Paul McConville

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34 Comments

Filed under Football, Football Governance, Rangers, SFA, SPL

34 responses to ““Tax Avoidance is a Right” Proclaims SIr David Murray. “No it’s not”, Is Reply

  1. Ah never dun nuthin – it wiz him ower there! I wizna there anyway when ah never dun it.

  2. PaulMc

    Gordon Gecko eat your heart out.

  3. Chris

    Paul,

    How does receiving a repayable loan provide financial security? Surely security would come from receiving funds that could be kept instead, albeit after the requisite tax was deducted?

    Murray talking shite, no?

  4. JimBhoy

    Paul… Thorough as always fella! i await those who see it as sectarian and biggoted blog FFS.. Questions Rangers fans should be asking..! It’s becoming a common theme. I have been asked and seen in many a sh!t blog “why don;t you just concentrate on your own team!….WTF Rangers could be besmirking Scottish football for a long time to come with the antics of the a-holes who associate themselves with the CURRENT club.!

    That hardcore i hope will ease up soon and they can get back to a proper 5 yr plan for success…

  5. Thomas

    And is the ‘Octopus’ hiding behind ‘The gorilla?

    • TheBlackKnight

      overshadowed by the big blue elephant in the room……….. what is this a zoo!

      (rhetorical question – no answers required)

  6. Plughole

    ‘Rangers agreed contracts of employment with its players (and staff). The EBT scheme involved the contribution of funds into an offshore discretionary trust managed by independent trustees. The trustees could and did make loans to individuals carrying interest with scheduled repayment dates.’

    ‘For example, taxpayers are entitled to maximise contributions to pension funds and benefit from the resultant tax allowances.’

    A very poor example. Contributing to pension scheme within set limits, set by statute is not the same as using an off-shore ‘independent’ (Ha Ha) trust to pay people millions of pounds of untaxed income to under the pretence of a loan.
    Why did he not just pay the money into a pension fund and secure income for players and staff in their old age?
    SDM arrogantly believes he is right, that is the most disturbing conclusion to be drawn from this. Unfortunately, throughout the corporate, financial, consultancy and political world, he is very much in the majority.

    ‘The trustees could and did make loans to individuals carrying interest with scheduled repayment dates.’

    If I’ve ever asked for a loan anywhere, I’ve always had to justify it.

    What were the loans for?
    When were they requested?
    Where is the evidence?
    Were there any EBTs set up, for players or staff, where loans were never made or refused?

    This remember, from a man who’s companies owed the taxpayer owned Bank of Scotland nearly £1 billion. I wonder how much he’s paid back?

  7. According to the Sun exclusive by Robert Grieve on same day as SDM’s statement of 7 August 2012, SDM said:

    “I’m not going to accept this any more. If they don’t listen here, I’m going to come back again later in the week with another statement.”

    http://www.thescottishsun.co.uk/scotsol/homepage/sport/leaguedivision3/article4474808.ece

    Did we “listen here” and if not, have I missed SDM’s the threatened statement?

  8. alexander

    Funny,The Bank of Scotland never even got a mention! from Sir Minty Moonbeams! soon to be, ordinary ,David Murray! Halifax soon pulled the plug on the Steal Tycoon! By the way is Charlie Bhoy still going to change the name of Murray Park? after all, he owns it, I think! There,s a free season ticket going for the person who chooses the new name, well so he said a few weeks ago! I believe him! any suggestions? how about Allys Arena

    • ecojon

      @Alexander

      Barras Bhoy Vhralie also said he had paid all his Scottish Football debts but BBC say:

      Dundee United have confirmed that debts owed to the club from Rangers oldco have not yet been paid, contrary to claims from newco owner Charles Green. In a statement, United insist sums due from a Scottish Cup tie played at Ibrox last season remain unpaid and the matter now rests with the football authorities.

      • ecojon

        @Alexander

        I just assumed it would be named: ‘Sports Direct Scotland’ as part of the kit deal with Ashley with no payment actually made.

    • Carntyne

      How about…The Green and Whyte Training Centre

  9. jeanette doyle

    I thik the problem with EBT’s goes far beyond the football team and into the realms of SDM’s group of companies who used the same “tax efficient” means to remunerate their staff – and this is why the FTT have yet to issue a judgement .

    Paddy Malarkey

  10. jeanette doyle

    Also, why give so much attention to what he said rather than to what he meant – this is a big boy’s game and you’re not one of them. Now piss off and let us get on with things

    Paddy Malarkey

  11. flump

    “Rangers sought only to provide financial security for players (and staff)”

    Hope it was explained that with your EBT headquarters offshore any form of payment that is not included into your monthly wages or recorded for HM Revenue and Customs places YOU at risk of avoiding tax payments, not the offshore holders.

    I want security, yeah
    Without it I had a great loss,oh now
    Security, yeah
    And I want it at any cost, oh now
    Don’t want no money, right now, nuh-now, nuh-now, nuh-now
    I don’t want no fame
    But security I have all of these things,
    yeah All of these things, yeah, now
    Security, yeah
    That’s all I want from you, oh now
    Security, yeah
    And a little love that will be true, oh

  12. RichW

    A while ago there was a saying in vogue along the lines of “auditors are the kind of folk who enter a battlefield when the battle is won and bayonet the wounded”, tho’ I don’t recall the originator, maybe Tiny Rowland or some other pillar of the capitalist class. Perhaps SDM was alluding to this saying? (I suspect “auditor” was often replaced by other profession held in low regard by the declaimer)

  13. Bill Fraser

    Perhaps SDM should be put in charge of drugs testing in sport. “It wasn’t the athletes who cheated it was the drugs”.

  14. Andy

    Good article, My personal beleive IS that, whilst I obviously enjoyed watching the calibre of player he brought to the club (therefore it would be inappropriate for me to be too damning,even though they operated in a manner that made spending, 4, 5 or 12m on players feel natural), IS that David Murray is the root cause of all our problems of the past year and that it was fear of the tax liability that drove him to the madness in selling to the conman, crook, theif that is Mr Whyte.

    The tax avoidance arguement is a difficult one, if someone came along to you personally and said if you do this, then you will pay half the amount of tax you do now and you can then use that money on your family, private healthcare, a new car….Now the first question you ask with money tends to be is it legal, not is it moral? Money has a funny way of clouding ones morality when it comes to crunch time…see just about every single banker in London, and in particular the bosses like Fred Goodwin, who for his misdemenours would have been in Jail had he stayed in Iceland, whilst here we pay him off.

    If the scheme was legally executed then there is no risk of losing the hmrc case and then there will be serious questions asked of DM’s motives when he sold the club to Mr Whyte. If it was run incorrectly, then liquidation would eventually have been a formality and perhaps not as smooth a transition (not the full admin debacle simply the transistion since Green came in has been fairly stress free to date) as this one to date appears to have been, (though I cautiously await to see how Mr Greens plan unfolds) – there has been plenty of speculation on here of good and bad that no more really need be said. So legality of the scheme is now irrelevant and morality of the scheme is not really applicable as money has no morals and has a way of twisting even the most clean cut of persons.

    So we then come to his statement, and what does strike me is that he has completely missed the point. The commitee is simply trying to find out if players were paid outwith there normal contracts for playing football. If they beleive they were then there is case for punishment, what that should be with regards to fines, stripping of titles etc will no doubt be fiercly constested on all sides. Why he has decided to come out with the statement can only be seen as an attempt to maintain his own reputation and to pile the pressure on the committee with respect to stripping of titles etc etc…however, like the ‘duped’ interview he clearly is still as deluded or ignorant to admit any wrongdoing, even if legality is seen as just, it was he that offered the high risk tax berry to individuals which as I said earlier people will almost always bite, it was he that spent 30m on players when the tax case was first announced and it was he that sold the club to as corrupt a man as Scottish football has ever seen. I think it is time for Murray to either man up and accept responsibility for his own actions or run and hide with his latest business partner Craig Whyte!! But please, for all I enjoyed the success, forgo insulting our intelligence by pleading innocence!!!

    PS: There are still serious questions to be asked of the lack of proper corporate governance for the past 15 years and I still beleive that authorities need look at themeselves first as to why they allowed this to happen….The EBT on the accounts would have been a pretty big number, surely it would have been in the interest of appropriate governance to ask what made that up as most other items on the accounts would have been self explanatory this must have stuck out like a sore thumb…Whilst not the cause, they are in part to blame….We have governance to ensure that rules and laws are upheld, if those in power to uphold those rules and laws do not apply them at the point of crime when it is glaring them in the face, then it is at best negiligent and somewhat obtuse to go to the lengths to prove guilt they are now…. (If the police did not arrest anyone in this country for 5 years, then it is likely that those breaking the rules would expect either that they are doing no wrong or that they can get away with it for another 5, 10 years)

    • ecojon

      @Andy

      Before the authorities look at themselves for allowing the lack of corporate guidance exercised I think you have to look at every director of Rangers during the period in question.

      It is easy and very convenient to blame everyhting on DM but there were plenty of other people ‘guilty’ of acts of commission as well as ommission.

      The question is why didn’t they act or speak-out until after Rome was well and truly alight and CW had no money left for violin lessons.

      It is also worth remembering that FF and others were pressing hard for a helluva long time to try and get Murray to come clean about the Rangers Finances especially at AGMs but got virtually no support for the Beard who loved Murray because of the money he spent on players and results achieved on the field albeir through financial doping.

      Nothing has changed it would appear with FF still correctly warning IMHO the financial Armageddon ahead with Green and the Bears suddently all warm and fuzzy since Green played the bigotry card.

      And now he is going to sit with the Rangers Ultras – although no actual ultra group in Europe would allow the club owner to sit with them – and all the Bears really are buzzing wondering if he’ll do the Bouncy and what songs he will sing. At the moment dancing on Celtic heids seems to be front runner.

      FFS talk about cake and circuses – does anybody have a brain over Ibrox way. Murray gave money but Charlie disnae have any money but he gives something even better which costs him nothing and which has the potential to finally destroy Rangers if things get out of hand.

      I really believe the sooner he makes his millions and departs the safer it will be for all Scots. Whether the Bears will be left happy is a very moot point.

      • JimBhoy

        @ecojohn you got there before me and much more eloquently. :)
        Need to switch my phone off when I am blogging…

      • Andy

        @ecojon

        I don’t find it all that easy to blame DM to be honest, as he did provide a team full of wonderful players, better than any Scotland will ever see for a very long time, so I do within myself have a soft spot for DM as all he ever provided me with was relentless success!!…..Until 1 year ago…Ultimately all the board of directors, finance director etc did advise Murray not to sell Whyte and Murray proceeded nonetheless, it was his shares he sold not theirs!!

        Essentially, DM and his directors over the period clearly thought that they were not breaking the rules, they thought they had a legal and spl/sfa compliant way around them….now as per my analogy above, if someone in governance does not step in and tell you wait a minute guys your breaking the rules, then your very well going to continue unabated. You can’t seriously tell me that had someone in the authorities actually bothered to look at the accounts rather than just tick boxes, they wouldn’t have said, hmmm EBT, wonder what that is? What makes up that big number?…you know what, I think I’ll ask?….The lack of proper governance is shambolic, and there retrospective actions simply highlight their inadequacies..which appear to still exist.

        You don’t like Green, why would you, he takes every oppurtinity to wind up the opposition, he is what Scott Brown is to Rangers, and we don’t like him, but at very least I can see that he is playing a game, and don’t feel the need to take any personal offense to his actions.

        If as per previous posts, he is going to be in and out in no time then you will have your wish and there will be a new band of investors with a different figure head running the club…..But I do think you are being melodramatic with what consequence you feel his words may have, I go to Ibrox every week and ‘Ultras’ is not exactly what I would call them….was it not Lennon that dedicated last years title trophy to Celtics ‘Ultras’…..My only hope is that the legacy he leaves behind is better than that of Murray and Whyte!!!

  15. JimBhoy

    @Andy some good points.. A couple of facts I know of…
    The Billy Dodds exclusive where he stated he had an EBT but paid full tax on everything he earned at Rangers, this might suggest RFC held onto some monies that should have went to the tax man and Dodds had the wool pulled over his head or maybe he is just mistaken.
    Mr Bain asked for a further £100k (for some investments) to be paid to him, this is the case where the paperwork didn’t have to be recorded or kept, this was discovered in an email i believe.
    It really sounds like a financial free for all, a fiscal disaster waiting to happen . Incredulous that these people could run any sort of business treating it like a plaything, the piggy bank they could dip into at any time…
    Then Whyte came in sold all he could and decided he was beyond paying any tax.
    Green comes out of the blue, pardon the pun, pretty much the same type of bullish guy who got your club into bother in the past. He would sell his Granny, loves seeing his face in the papers, loves the adolation of the numpties stupid enough to listen to his ill-informed, disrespectful, disparaging remarks.
    I genuinely think many non Rangers supporters myself included had hoped that Rangers would have done as most of their fans had suggested go to SPL3 and build for the future BUT without the paranoid, poisonous attitude but unfortunately I do not see this happen especially as the old attitude still remains and is being used to the advantage of the man trying to make a fast buck by manipulating the hard core element and those looking to sell a newspaper under any circumstances. His plan is succeeding (for now). One recent example; He has settled ALL Scottish footballing debt, er no he hasn’t he still has a substantial payment to be made to Hearts next year. But the papers stated he had paid ALL Scottish footballing debts as did he yesterday when interviewed..
    Well, when he screws things up and takes his slice and moves on to rape another company I hope at that time Rangers can get back on the right track but unfortunately I see more pain ahead before that comes about.

  16. Point worthy of noting for this and future………….EBT schemes stopped becoming economically viable in 2010……………RFC misery deepened and DM started to actively,(albeit up for sale for 3 years previously), seek his exit strategy with fall guys, (plural), Whyte and co parachuted in to bail him out, we don’t do walking away? well maybe RFC famous leader did just that, after dropping the whole mess as legislation caught up with him AND MIM Group.

  17. When EBT schemes became tax inefficient in 2010, does anyone know if payments to Rangers players under existing contracts changed in any way or were contracts rewritten? If so, that would point at previous payments being contractual.

  18. geddy Lee

    SHUDDER. Murray’s over-bearing arrogance is quite offensive!

    This is what happens to someone when they are surrounded constantly by sycophants and cringing hacks from the Scottish media. They are used to saying any old tosh and having it swallowed hook line and sinker.Let’s hope more than ever, that he does not escape this charade scot-free. oh how the SFA/SPL must regret getting in to bed with TCFKR.

    Green seems to have recognised that trait and is using it as his template to become FC Sevcovia’s first club “Legend”.

    Meanwhile Derek Ferguson is the latest EX Bear to recieve the “Hatred Treatment” over at the “Bear’s Den”. It seems he did not display enough hatred towards Neil Simpson, who apparently had the temerity to tackle one of their players a couple of decades ago. It makes startling, if not disturbing reading, to see what kind of mentality now holds sway over at Ibrox.

  19. Carl31

    Is there an escape for Sir David and Rangers?
    Before I start can I make it clear that I am playing ‘devil’s advocate’ below and don’t necessarily hold any of the opinions or positions I might describe. I will happily accept their validity being challenged/corrected/blown away, laughed at for daftness, or any comments that generally show me up as a lightweight. Apologies if this ground has been covered before. Here goes…
    It has been set out and commented on, on a number of occasions here and on other blogs, that Rangers (now IA) arranged to make payments to a number of staff, including players, via EBTs. It is broadly accepted that these payments were made in such a fashion as to minimise the amount of tax paid on them, and thus free up working capital for Rangers (now IA) for other uses. These seem to have taken place between 2001 and 2010. The players’ payments appear to comprise several examples of ‘dual’/’second’ contracts, which are prohibited under SFA/SPL rules and were prohibited for the full period in question.
    The RTC blog (and others inc. Random Thoughts) has set out a fuller explanation of how EBTs ‘work’ and I wont cover old ground here, but suffice to say that the ‘side letters’ are key. The EBT avoids tax since it is stated to be a loan (with repayment terms), discretionary and under the management of trustees independent of the employer company. Since no sensible person or their agent would accept remuneration for services on the basis that it is a loan, in the case in question some form of reassurance would have been needed – its generally accepted that further written assurance or terms (generally referred to as a ‘side letter’) which sets out, generally in some form, that the loan’s terms may be disregarded/do not apply, would have been provided. Its held by HMRC and others that this side letter or such document would, if in existence, form part of the contract between employer and employee, and would effectively render the EBT payments subject to PAYE and NI.
    Hence, Sir David Murray and the directors of Rangers (now IA) find themselves where they are – subject to a claim by HMRC for unpaid tax for the period amounting to many millions of pounds (between £34m and £75m depending on accuracy of reports), and subject to an SPL investigation which could result in action being taken against them (including correction of the footballing record to remove Rangers as title/cup winners on a number of occasions and/or punitive fines).
    Firstly here, consider the tax claim. A couple of points need be made. The side letters are crucial in their wording (whats included and whats not) and how they fit within the overall set up of an operational EBT.
    1. Wording.
    If it is a simple letter that says the employee may disregard repayment terms of, or need not pay back, any EBT loan, then a number of issues are raised… who would be liable for any tax/NI? Can the employee keep the money but not the tax? Does the employee fall liable for the tax once the side letter is examined by the HMRC authorities? Other such relatively simplistic wording might mean that a case could be argued that the Trust/MIH/Rangers(now IA) are not liable. Even with more specific wording, might it be the case that the liability re tax/NI is arguable or might be shared since its isn’t expressly or explicitly set out?
    2. EBT operation.
    The EBT is set up by a company at a higher level than Rangers (now IA) on an ‘organisational chart’ and then operated by independent Trustees. Rangers (now IA) have dealings with the trust as far as it pays money in, but no further. MIH sets up the Trust and puts trustees in charge of distributing ‘loans’, but Rangers(now IA) don’t have any responsibility for the operation of it.
    If the side letter is on Rangers (now IA) headed paper and is from Rangers (now IA), but contains terms that release the recipient (a Rangers employee) from the terms of the MIH EBT loan, could it be reasonably argued that the letter gives that which is not in its gift? Might the employees and/or their agents have been duped into the validity of the side letters in that – the side letters are provided from an entity (Rangers (now IA)) that has no legal authority to release from or alter the terms of an agreement from another entity (MIH EBT)? If the employees and/or their agents accepted this from their employers, then on their head be it.
    Secondly, consider the SPL investigation. They would be unconcerned with 1. above since its not their remit to judge based on payment or non-payment of tax. But 2. Is of concern to them. They would base their findings/verdict on whether the rule on ‘all payments for footballing activities must be declared’ is complied with. Again, might Rangers argue for similar reasons that the EBT payments were and remain loans – not based on footballing activities, and thus do not need to have been declared? Again, if its argued that the side letters give that which is not in their gift – then the EBT payments remain loans, Rangers (now IA) need not have declared them to the relevant footballing authorities, and they weren’t declared.
    I suppose this angle, or the arguing of this case depends on showing that Rangers (now IA) and the MIH EBT were independent entities and that one did not have legal authority to affect the operation or decisions of the other. That might come down to the identity of the named Trustees of the MIH EBT – and, I suppose, the fact that the Trust is Jersey based means that information could be difficult to get hold of (or more difficult that a mainland based trust). If the Trustees have obvious or tracable links to management of Rangers (now IA) then independence is difficult to argue, but if the Trustees are MIH people but separate from Rangers (now IA) then it’s a bit ‘muddier’ and a case could be argued. I would find it difficult to believe that the Trustees, who are empowered to dish out SDM’s money, have no connection to him whatsoever.
    To conclude, I don’t hold the above positions (mainly down to the ‘spirit of the game’ principle which I’ve mentioned before in other posts) but I do feel that there may be more to the whole affair than is currently ‘in the open’, and there might just be, by legal argument, some form of escape route for SDM and Rangers (now IA).

    • Plughole

      Carl31
      Would lack of evidence be enough for SDM to get off?
      I’ve always been under the impression, where taxation is concerned, that you’re guilty until proven innocent. I accept I could very well be wrong.
      When the tribunal starts to sift through the evidence, letters, loan agreements, loan applications, this will become clearer. However, I think there may be very few documents available from individual players, managers and employees.
      As SDM quite rightly states ‘tax evasion is a crime’.
      Will specific documentation and lack of specific documentation signify a crime? ie. Did the attempt to avoid collection and payment of taxes in reality cross over into evasion.
      If insufficient documentation was issued or requested, could this be construed as deception? (given that the players, their agents, accountants and solicitors were ignorant of the workings of EBT schemes.)
      There is clearly a long way for the saga still to go.

  20. Gobsmacked

    It is apt that you use term “bunker” as the term that springs to mind is “my enemy’s enemy is my friend”. SDM, Whyte, Green et al clearly are circling the wagons in the hope all this goes away. The supporters have been punished enough and that damned SFA applying rules, who elected these fools.
    So would everyone please move along there, nothing to see here, c’mon there move along !!!
    Ignorant, arrogant, unrepentant. EBTs were legal you just didn’t obey the rules (it seems), there’s those bloody rules raising their heads again.
    Fans paid good money to see us win those titles – so we should get to keep them. You can’t argue with such an entrenched mindset.
    The carpet that this is being brushed under must now surely have progressed from a Munro to Mountain qualification.

  21. Pingback: The SPL Commission re the Rangers FC – Is It Truly Independent? | Random Thoughts Re Scots Law by Paul McConville

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