First Tier Tribunal Releases A Decision About A Scottish Football Team

And so the tax decision about a famous Scottish football club is issued, and it went in favour of HMRC ….

but this is not the Rangers case, but instead that of Falkirk Football Club.

The full decision can be found here – http://www.bailii.org/uk/cases/UKFTT/TC/2012/TC02262.html

It related to an appeal against penalties imposed by HMRC for late payment of PAYE by Falkirk in 2010-2011. The penalty imposed was £11,655.89. The decision gives an insight into what the Tribunal considers to be a reasonable excuse for late payment allowing penalties to be mitigated, and offers a view as to the financial challenges facing football teams in Scotland even before the “Armageddon” © the Scottish Press, of there no longer being a Rangers in the SPL.

The decision states:-

“Falkirk Football and Athletic Club Limited (the Club) was represented at the Hearing by Mr Martin Ritchie, the Chairman of the Club, who gave a wholly credible, honest and clear account of the difficulties that the Club had faced and by Mr Kenny their advisor and also a director.”

It was not in dispute that a number of payments in the year had been late.

“A total of £322,213.97 was not paid on time in the year for the purposes of this penalty and, since there is a sliding scale for penalties, the penalty thereon is calculated at 2% and amounts to £6,444.27. That penalty has been correctly calculated by HMRC.”

If this is the PAYE figure for most of the year, then allowing for payments made on time, on a broad brush approach it suggests that the total wage bill at Falkirk comes to around £1 million, very roughly. This is a useful comparison with Mr Green’s Rangers, where he claims the wage bill is down to only £6 million!

The issue in this case was whether the penalties should be upheld as, if there was a reasonable excuse for the late payment, then the Club might have been able to escape some or all of the penalties.

In considering a reasonable excuse, the Tribunal had to examine the actions of the Club from the perspective of a prudent taxpayer exercising reasonable foresight and due diligence and having proper regard for its responsibilities under the Taxes Acts.

The Tribunal found the facts as follows:-

In summary, the Club had faced a number of serious challenges in 2009-10. One of the major problems was that the club was in the Scottish Premier League (SPL) and suffered from the collapse of Setanta, the TV broadcaster that was due to pay large sums to the clubs in the SPL, and the loss for the Club was of the order of £400,000.  The Club’s financial year ends on 31 May in each year. At the Board meeting at the end of that financial year the Directors were made aware that they owed HMRC sums of the order of £83,000. It was minuted by the Board, that the Club required to negotiate with HMRC urgently to seek some form of dispensation, that they needed to speak to HMRC about a payment plan (see the following paragraph). It was remitted to the Managing Director to do so. Previously, the Club had had the benefit of the services of a full time semi qualified person working on their finances but in the cut backs at the end of 2009-10 that ceased and the Managing Director, Mr Craig, undertook that role with the support of, what the Board believed to be, a reputable accountancy firm to whom the payroll function was outsourced. Miss Sinclair of that firm worked at the Club for one day per week.

Since the possibility of relegation intensified the financial pressures, the Board met twice a month instead of the usual monthly meeting. At each Board meeting until July 2010 that debt to HMRC was a standing item. At the July meeting the Managing Director, reported that a payment plan for the historic debt had been agreed with HMRC but the terms of that plan were not reported in full and therefore not minuted.  The Board believed that that problem had been solved and it was no longer a standing Agenda item.  Therefore, as far as the year 2009-10 was concerned, there was a time to pay agreement (TTP) which was in place and implemented.

Further, since that season they were placed in the bottom few clubs in the League, the Club faced possible future relegation with the substantial consequential loss of income. The Board was well aware of the risks attached to that and had plans in place for that contingency. They were relegated in May 2010. The impact of relegation was considerable but it had previously been identified as a very high risk, they had prepared as well as they could for the contingency and they were aware of and received a “parachute payment” of £250,000 to ease the change process. They had put in place cost cutting measures and had a financial reporting system in place.

The Tribunal was provided with an example of the financial reports, which were provided to the Board for every meeting. It was explained that the Board had asked for these since it was important for the Board to know that the creditors were being managed appropriately. Those papers were detailed. In particular as far as creditors were concerned, the age of the trade creditors was analysed on a monthly basis, the creditors described as “significant” were identified both by name and by age of the debt. The Board received a cash flow report, Profit and Loss account, forecast Profit and Loss account to the end of the financial year and a balance sheet and they were all compared to the Budget, which was set at the end of each year for the following year and then was not changed in year. It was not in dispute that the Club had believed that careful cash management had been crucial because they were trying to “nurse” the Club through to the transfer window in January 2011.

The Board were aware of the cash risks and agreed loan funding from a group of major shareholders which could be drawn down when absolutely necessary:  that drawdown was implemented in February 2011 when the size of the debt due to HMRC was disclosed to the Board of the Club.

The Club had other major creditors apart from HMRC and they agreed payment plans with them all. The Finance Report at October 2010, identifies the largest creditor at £39,698 and the longest outstanding was one of just over £12,000 for four months and older. The real issue is that the PAYE debt for May 2010 alone, was in excess of £75,000 and was only paid in 2011, and HMRC is referred to nowhere in these reports produced to the Tribunal. It was confirmed in evidence that the cash flow should have shown payments to HMRC and there may well have been entries in the Balance Sheet.

As is indicated above there was a TTP reached with HMRC in regard to the outstanding debt for 2009-10 and whilst that was adhered to HMRC took no further action in regard to that debt. That was the outstanding issue between May and July 2010. On 21 December 2010, HMRC wrote to the Club threatening to present a petition to the Court to wind up the company if outstanding debts of £308,038.76 were not paid within seven days. Mr Craig replied on 28 December 2010 offering a payment timetable but that offer was rejected by HMRC on 06 January 2011 and proceedings then commenced. There was no TTP for 2010-11 and no approach was made to HMRC about payments for 2010-11 until December, notwithstanding the fact that a Penalty Default Notice, which warned about the penalty regime had been issued to the Club on 28 May 2010.

The Club also faced other financial pressures in 2010-11. Severe adverse weather meant that between 6 November and 29 December 2010 there were no home games and it is from them with the associated corporate activity that income is derived. The economic recession had an impact in that there was less financial support from both corporate and individual supporters. Royal Bank of Scotland changed the terms under which they remitted payment for the sale of season tickets so instead of receiving the funds in April or May 2010, they were received in tranches of approximately £99,000 in September 2010 and £55,000 in the following May. Lastly, the change in Government in May 2010 led to a fall in income from the public purse.

The arguments regarding a “reasonable excuse” for late payment were as follows:-

  • Falkirk believed that they had good corporate governance and outsourcing payroll to a firm with a good reputation meant they had implemented their responsibilities.
  • They had relied on the assurances from Mr Craig that everything was “OK” with HMRC and he had misled them: the first they had known of the problems was when HMRC took action.
  • The impact of the relegation together with the change in the treatment of season ticket receipts, the reduction in income from the public purse and the inability to play home games for weeks had placed exceptional and unforeseeable pressure on cash flow.
  • They believed that they had tried to be fair to HMRC in the past and on realising the problems had settled their debts so the penalty was perhaps unfair and disproportionate.

 

The relevant legislation is contained in Schedule 56 Finance Act 2009, as amended by Schedule 11 Finance (No 3) Act 2010.

Paragraph 9 of Schedule 56 states as follows:

(1) If  HMRC  think it right because of special circumstances, they may reduce a penalty under any paragraph of this Schedule.

(2) In sub-paragraph (1) “special circumstances” does not include

(a) ability to pay, or

(b)  the fact that a potential loss of revenue from one taxpayer is balanced by a potential over-payment by another.

Paragraph 16 of Schedule 56 states as follows:

(1) Liability to a penalty under any paragraph of this Schedule does not arise in relation to a failure to make a payment if P satisfies or (on appeal) the First-tier Tribunal or Upper Tribunal that there is a reasonable excuse for the failure.

(2) For the purposes of sub-paragraph (1)—

(a) an insufficiency of funds is not a reasonable excuse unless attributable to events outside P’s control,

(b)  where P relies on any other person to do anything, that is not a reasonable excuse unless P took reasonable care to avoid the failure, and

(c) where P had a reasonable excuse for the failure but the excuse has ceased, P is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.

The Tribunal rejected Falkirk’s arguments.

As regards the alleged failings of the company engaged to deal with payroll, the Tribunal said:-

If there were failings … then the Club’s remedy lies with her. The fact that the Club relied on her does not amount to a reasonable excuse.

The Tribunal went on to say:-

Two of the explanations given in the Grounds of Appeal in the Notice of Appeal appear to the Tribunal to be likely to be wholly accurate in the circumstances, namely “… the executive management did not fully understand the sequence of payments to HMRC and, … relied on memory for payments made” and “… overzealous cash management and a lack of appreciation of paying particular debts on time – including HMRC” led to the problems.  Neither amount to reasonable excuse.

It then considered the actions of the former Managing Director, Mr Craig.

Firstly, since he was Managing Director, he was in fact “the Club” and his actions in that role were as the Club. Accordingly, the fact that he did not ensure timeous payment, knowing as he did the problems in the previous year and the availability of TTP would make it very difficult to argue that he was unaware of the potential problems caused by late payment of PAYE. The Tribunal finds no reasonable excuse in his actions.

Even if it were to be accepted that the Club should be considered to be the Board of the Club as a whole and that they relied on and were misled by Mr Craig, there is still a problem when looking at reasonable excuse in that context. In terms of Paragraph 16(2)(b) there can only be reasonable excuse, where there has been reliance on another person if the taxpayer “took reasonable care to avoid the failure”. The Tribunal finds that such reasonable care was not taken in this case.

The Tribunal accepted that:-

The Board very carefully monitored every major creditor on a monthly basis and in detail. They ensured that they had arrangements in place with every major creditor. However, the single biggest creditor was HMRC. There were no monitoring arrangements in place. Clearly, all other creditors were monitored very carefully but HMRC were not.  Certainly in the early months of 2010-11 they did monitor the position in regard to the historic debt and that was appropriate.

Knowing that that debt had accrued, that their salary costs remained largely fixed and that they were moving into a period with significantly lower income available to cover those costs, a prudent Board should have been very concerned to monitor the cash flow and to ensure that there was no repetition of the 2009-10 debt.

It should have been perceived as a major risk factor and yet is totally omitted from the financial reports tabled. In May, June and August 2010 there were no payments. That alone should have alerted the Board (at their monthly meetings) to the fact that payments could not have been being made timeously. A prudent non-executive director, aware of historic problems with HMRC, should have questioned the quality of information received from the executive. The crucial problem in this instance is that debts due to HMRC were the only debts that the Club did not monitor and they should have done so. There was a failure in corporate governance. Accordingly, the Tribunal finds that there was no reasonable excuse on that basis.

Turning to the financial challenges facing the company, the Tribunal found as follows:-

The economic problems caused by relegation were wholly predictable and indeed the Club took appropriate action to manage that. No doubt the change in Government did impact on income streams but it was a planned General Election and most other businesses who depended on the public purse in any significant way had contingency plans in place. Royal Bank of Scotland had the power to change how they dealt with season ticket receipts and they did. That would have affected other football clubs. In any event, it was a timing difference and was a factor known to the Club at or about the beginning of the tax year.

Lastly, as far as the bad weather is concerned, although income will have been affected that was in November, December and possibly January and there were no late payments in that period so it cannot amount to reasonable excuse. In summary, although the Tribunal accepts that the Club was under financial pressure for a number of reasons, none of the factors cited were outwith the normal range of business pressures to be managed on an ongoing basis.

The appeal by Falkirk was dismissed.

As we can see, the argument puts forward by Falkirk were not unreasonable. However, this did not reach the threshold for being a “reasonable excuse” under tax legislation.

The omission of HMRC from the creditors being reported to the board ought to have been of concern, to the non-executive directors, even if the executives were aware of it. Accordingly, whether the execs omitted reference accidentally or deliberately, the responsibility of the non-execs was to note the true position, and act accordingly. The failure to pay HMRC should have been picked up by them and the failure to do so was a failure of governance.

The troubled financial climate too was not an excuse. As the Tribunal pointed out, other companies, and indeed Falkirk, did make provision for relegation, cuts in finance and bank changes.

Whilst this decision is irrelevant to the issue of EBTs waiting to be decided for Rangers, it does have a bearing on questions of penalties.

In Falkirk’s case, despite a number of steps being taken, and the bills being paid, they were still assessed for penalties.

In relation to Rangers, such arguments would not be available for the EBT cases, nor could they be used in respect of thew sums assessed as penalties where Craig Whyte decided to stop paying tax.

It also raises questions about the non-executive directors at Ibrox, and how much attention they paid to their roles, especially where they were experienced men of business. As the Falkirk decision makes clear, the non-execs have duties wider simply than to the company, and a responsibility to be active to ensure good corporate governance is in place.

Messrs McClelland and Greig resigned from Rangers under Craig Whyte as a consequence of being kept in the dark. It may be an issue addressed by the liquidators as to whether or not they did so early enough, or whether they ought to have been pro-active sooner, and done more than simply resigning.

We still await the Rangers decision. It is unlikely to be capable of thorough analysis in as short a post as this one!

Posted by Paul McConville

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43 Comments

Filed under HMRC v Falkirk, HMRC v Rangers

43 responses to “First Tier Tribunal Releases A Decision About A Scottish Football Team

  1. Violet Carson

    As we all know, HMRC have a sliding scale of penalties and 2% is roughly the same as a slap on the wrist and reflects that Falkirk did most things possible to comply with HMRC. I am not sure the same can be said of Rangers. However, we must not forget innocent until proven guilty.

  2. ecojon

    I think the most telling paragraph is: ‘As we can see, the argument put forward by Falkirk were not unreasonable. However, this did not reach the threshold for being a “reasonable excuse” under tax legislation’.

    Extrapolating that to Rangers – they will need be the best limbo dancer in the world to slip under the ‘reasonable excuse’ bar.

    And the non-exec role is also one where they could be a lot of flak flying.

    There is also a degree of implied ‘sympathy’ towards the Falkirk accounts ‘professional’ in the finding which may well be absent towards those professionals advising Rangers.

  3. Jacko

    Haven’t rangers been found guilty much as any common criminal has when their trial goes against them? The situation then becomes a process of appeal. The common criminal is not suddenly accorded the status of innocent until the appeal process takes its course. In fact the common criminal is, if given a custodial sentence, held in prison. They are not released, except in very exceptional circumstances, pending appeal.

    So the guilt of rangers seems to be the current status and it is pending appeal. Fortunately for them they were not told to pay the fine pending appeal after which the money would be returned on successful appeal. This is all regarding EBT’s of course. This does not relate to the deliberate withholding of PAYE, VAT, NICs in the months prior to rangers entering administration which effectively amounted to a tax payer funded overdraft for rangers to allow them to see out the season.

    What the Falkirk decision says to me is that saying “We didnae know, someone else should have paid it, no one told us about these tax problems” is simply not a defence.

    Jacko.

  4. Really interesting Paul. Falkirk, god bless them, seem to have tried their best under serious difficulties. It gives a real insight into the pressures of running a club – it does make you wonder if anything remotely like the reporting systems and diligence of the directors were happening at Ibrox over the past decade or so.

    And if this is just a short post Paul, I may have to look at getting a backup drive to receive your analysis on the Big Tax Case!

  5. As far as relevant precedents go this seems to be a doozy. Non-payment of taxes is 100% the responsibiity of “the club” after all, “since (mr Craig) was Managing Director, he was in fact “the Club” and his actions in that role were as the Club”. Similar issue for Murray, Ogilvy, Johnstone et al.

    If this was the judgement against Falkirik, OMG I can’t wait for the lid to be lifted on What Was Rangers’ fiancia governance.

  6. Pensionerbhoy

    While the Falkirk tax issues fade more than somewhat in relation to Rangers’ potential tax problems, they highlight, for me anyhow, the possibility of a death knell for a significant number of smallish football clubs throughout the U. K. This being so, is it not possible that H.M.R.C.’s actions, particularly in relation to smaller football clubs, could be regarded by the country’s ‘guardians’ as ‘ethnic cleansing’ by financial bludgeoning? If such actions should extend to a ‘very large’ club, could this not be seen as a potential ‘death sentence’ for football as a whole? If so, would steps be taken to preserve what was and, in the minds of many, still is an essential and vital British institution entitled to ‘protected species’ status? This being the case, I feel certain there would be activity at the highest level to intervene in any such actions by H.M.R.C. I then see the Rangers case being the possible springboard for such a move. Can it really be said, therefore, that the Falkirk case is a realistic reflection of the potential arguments by H.M.R.C. in the Rangers tribunal? Can we draw even the slightest hint of a conclusion from the Falkirk case regarding a possible final decision of the Rangers tribunal? I believe there are certainly no indications that the outcome will be the same even in the face of no ‘reasonable excuses’ from Rangers. For those who seek the best of times or the worst of times from the Rangers Tax Tribunal there is a whole lot more breath-holding still to take place.

    • @Pensionerbhoy, There are two answers to your question ‘If such actions should extend to a ‘very large’ club, could this be seen as a potential ‘death sentence’ for football as a whole? The first answer is ‘yes’, but it was for this very reason that UEFA introduced its FINANCIAL FAIR PLAY REGULATIONS, to stop clubs overspending.
      The second answer in ‘no’ because most ‘very large’ clubs have prudent fiscal management, hence the reason why only those clubs with very rich private investors or ownership are spending extravagantly in the player transfer market.

      The finding that the Managing Director in fact “the Club” and his actions in that role were as the Club, is no surprise. Neither is the role of the non-Executive Director, in the business world it is one of the primary reasons that a non-executive Director is appointed. The non-Executive is normally a person held in reasonable high esteem, who tends to ask the questions that other Board Members are too afraid to ask. From RFC point of view Messr’s McLelland and Greig elected to resign rather than ask the challenging questions, yet it could be argued that they represent the clubs fans. Mr Greig is held in the highest esteem by RFC fans, yet he let them down by not tackling the issues as he saw them and not making public his concerns at a much earlier stage.

      Earlier in your post you commented, ‘This being so, is it not possible that H.M.R.C.’s actions, particularly in relation to smaller football clubs, could be regarded by the country’s ‘guardians’ as ‘ethnic cleansing’ by financial bludgeoning?’ . This is a simply preposterous comment to make. There are numerous senior and junior football clubs across the UK, who manage to balance their book. Who manage to pay their PAYE, VAT and NIC commitments in a timely or reasonable manner. Who manage to invest in their youth systems and have the confidence that those same young players can do a job for the senior side whenever called.

      Falkirk made the mistake of not identifying the potential risks to their business / club and managing those risks accordingly. It happens to numerous S.M.E’s each year, something extraordinary happens (in Falkirk’s case no home football matches to generate revenue from 6th November to 29th December 2010), but H.M.R.C. dealt with this in its findings by saying, ‘when they had previous experience a prudent Board should have been very concerned to monitor the cash flow and to ensure that there was no repetition of the 2009-10 debt.’

      As much as we like to make excuses and like to blame Authorities for wrongdoings, we have to accept responsibility for our own actions, whether that be you, me, Falkirk or RFC. There really is no difference, we might feel sorry for ourselves when the judgment goes against us, but ultimately we should learn from our experience. Has RFC or THE RANGERS FOOTBALL CLUB learned its lesson? Has their fans learned their lesson? Has the SFA learned its lesson? The clubs in the SPL seems to be learning lessons, the SFL is benefiting from the additional revenue being generated from the new Rangers fans.

      Football will survive because it will remember that “football is nothing without the fans.” Not my words, the word of the late great Mr John (Jock) Stein.

      • ecojon

        @ TheObroni

        I think if Falkirk had gone to Hector as soon as the weather hit home matches then things might well have been different and an accommodation reached.

        Earlier this year I had to help a mate who hadn’t done a return for 7 years and was near suicidal and I was amazed at how helpful the IR were. I explained the position and the fact that 99% of the records were there but stuffed in the usual plastic carrier bags totally jumbled.

        We sat down and worked out a timetable for each declaration to be done but it was tight and I managed the first five. Tbh I was frazzled by then as I was busy workwise anyway and ran out of steam – my friend was so worried that there was no point in him even filing stuff in order – but Hector agreed I could take a week’s break and then extended the agreement a bit and it was all done with professionalism and a genuine feeling that they weren’t out to hammer anyone into the ground but just collect the tax due. But you have to keep communicating with them.

        And that really is the secret plus if you pay what’s due and don’t try to cheat them there’s no probs. Once we have the FTT determination we will see what conclusion Hector reached in the Rangers case.

        • I absolutely agree! In all my dealings with HMRC over the last 8 years abroad, they have been nothing but helpfull, courteous and above all understanding. I have nothing but the utmost respect for them.
          So hell mend those that try wilfully to screw them!

      • Pensionerbhoy

        TheObroni

        Thank you for your comments. However, I wish I could be as positive about football clubs’ finances and UEFA regulations as you are. I do challenge your assertion that ‘very large football clubs’ have prudent fiscal management. Just look at the extravagant spending and enormous debts of most ‘big’ clubs both in the U.K. and in Europe and it shows that, given a change of economic environment, private or public, the balloon that is football finance could burst with pseudo-nuclear consequences. Surely it was this very threat that brought about, reluctantly in my opinion, the restraining regulations from UEFA. I firmly believe that this organisation only acts with any impact when it sees threats to its own cash pig. As for small clubs, I would not argue that they may be well managed financially but their income is at the very least fragile. If this is not the case, why are there so many regularly holding fund-raising events, raffles and door to door collections not to bolster income but to actually just keep afloat. I have spoken with representatives of clubs at various levels and have witnessed this income raising on a regular basis where I live in the North East of England and I am certain the situation is reflected elsewhere. If you are correct about the game being financially stable and healthy then I am genuinely glad to be corrected for I have no wish to see my favourite sport disappear. I can assure you that I have a lifetime of wonderful memories supporting my team and thankfully this will continue as long as true ‘prudent fiscal management’ guarantees survival because I know it is definitely operating within practical parameters. I would never wish that generations to come should be deprived of the great enjoyment I have had from the game, albeit provided by my own very special club, over many decades. I guess only time will tell if I am a manic depressive or a depressing realist :>). If I am correct, however, I suspect that my conclusions regarding the outcome of any tribunals might still come to pass. Meantime, I hope like me, that you continue to enjoy your football at whatever level you watch it.

  7. mcfc

    The most striking thing about the judgement is its clarity. After weeks listening to Green, Ally, Murray(s), Jabba, Keevins and a host of other RFC apologists I’d nearly forgotten about clarity.

    There’s been a lot of debate about whether the Rangerati can handle the truth. I wonder if they can handle the clarity that the FTT will bring. Perhaps ,followed quickly by Nimmo-Smith, BDO and the SFO.

    We may be about to see a new pandemic – death by clarity – it could affect up to 500 million worldwide.

    BTW – regardless of all the pressures on Falkirk, forgetting to pay your biggest single creditor is inept. Especially, when that creditor has the power to levy penalties and will push you into administration without hesitation.

    Have the same people ever forgotten to put the players on the bus of an away match? Exactly!

    • ecojon

      @ mcfc

      I think I’ll patent the ‘Clarities’ trade name – I think it would be great for a two-flavoured sweetie.

      Lovely silky chocolate on the outside wrapped around a bitter acid drop centre 🙂

  8. …they made NO PROVISION – knowing what was ahead of them regarding debt.
    —————————————————————————————————-

    The Tribunal was provided with an example of the financial reports, which were provided to the Board for every meeting. It was explained that the Board had asked for these since it was important for the Board to know that the creditors were being managed appropriately. Those papers were detailed. In particular as far as creditors were concerned, the age of the trade creditors was analysed on a monthly basis, the creditors described as “significant” were identified both by name and by age of the debt. The Board received a cash flow report, Profit and Loss account, forecast Profit and Loss account to the end of the financial year and a balance sheet and they were all compared to the Budget, which was set at the end of each year for the following year and then was not changed in year. It was not in dispute that the Club had believed that careful cash management had been crucial because they were trying to “nurse” the Club through to the transfer window in January 2011.

    • ecojon

      @ jimlarkin2012

      For some reason the reporting of the tax debt disappered off the reports to the Board and my reading is that Hector was pointing a finger at the execc/s on the Board but also saying the non-execs should have asked.

      I think this may well be what happens at Rangers and the hope that some Board members have of escaping Scot-free might be a tad over-optimistic because they should have been asking questions and reporting the matter to the appropriate authorities. But I guess that would have meant the succulent lamb would have been off the menu 🙂

  9. mick

    poor falkirk if thats what happens to a small club late that paid what instore for sevco will the tax man take the lot and sell to retial its not signed of yet via BDO and greens panicing about something a cant see the taxman being leanent here the presidence has been set via falkirk

  10. ian lewis

    This judgement could have been written at any time in the last 30 years -it’s probably on a template for the gaps to be completed.As HMRC well knows any small business that gets into difficulties will do its banking with the Revenue for as long as it can.Once the brown stuff hits the fan the Revenue will decide how desperate, as opposed to dishonest,the business has been and will exact a fine accordingly-in this case a slap on the wrist.

  11. Violet Carson

    On the death knell point, that horse has bolted. Old Rangers and D&P and BDO and all those involved with Old Rangers will have to sort out the mess. The Falkirk case gives us a useful insight, but as Ian Lewis says, HMRC have a more or less standard document for this sort of situation. But new Rangers have emerged and as far as I can fathom the HMRC case will have nothing to do with them. So the ‘essential and vital British institution’ goes on. Thus, the death of Rangers i.e. a team in light blue playing at Ibrox is exaggerated. What should worry that team’s supporters is the role of BDO (voiding the sale of assets) and the IPO. If I were a Rangers supporter I wouldn’t care much where they played or what financial shape they were in provided I saw a clear and believable strategy for returning them to the top division.

    • mick

      https://scotslawthoughts.wordpress.com/2012/09/18/on-possible-gratuitous-alienations-good-faith-and-sevco-shuffling/

      @violet carson Gratuitous Alienation – A transfer of property by a debtor to another person for no consideration or for an inadequate consideration. Such alienations in the period up to 5 years prior to the date of sequestration are open to a statutory challenge by the permanent trustee; alienations outwith that period can only be challenged at common law.

      Gratuitous Alienation is reality and thats why hes rushing the share throw as it will cause a bigger stir also bdo have power to auction for creditors as deal is a con and the creditors pot has been robbed and dipped left right and center so its going to be intresting as they are a leading global brand in there field and go by the book not open to back handers like all the other clowns involved thats the 1 thing that sets them apart from all the rest involved

      http://www.bdo.uk.com/services/advisory/forensic-accounting/professional-negligence-services

    • ecojon

      @ Violet Carson

      Ah but I think you may have missed the point in that the Rangers support see a clear and believable strategy for returning them to the top division but not named the SPL.

      They have accepted the Green vision of the future and for better or worse they are wedded to it until death do them part. They have accepted there is no alternative – rejecting your eminently sensible proposal – and are soldiering on. They aren’t giving a lot of thought to the road ahead as they know deep inside that if they stop to think about the financial realities then the dream will crumble.

      I saw lots of Celtic supporters with the same problem when we faced financial meltdown but luckily there were enough left thinking on their feet to help pull the club through and then of course Wee Fergus and chico are cut from different cloth and it certainly shows 🙂

    • Pensionerbhoy

      Violet
      My ‘death knell’ comment was not in relation to a particular club but rather the whole of football in the U.K.. My argument was that any threat to the overall survival of football could be a catalyst for government intervention. The mass investigation of football by H.M.R.C. that has been hinted at could pose that very threat and Rangers could be the first in line to benefit from any preventative government action. So, I was concluding that, in such circumstances, the Falkirk case would be of little or no significance in relation to the Rangers tribunal which, even though the club will inevitably be liquidated, will undoubtedly have consequences for its history.

  12. COYBIG

    Is there any chance that Campbell Ogilvie et al. didn’t know how the EBT scheme was run? Because I don’t buy that excuse (and I don’t ‘take out a loan, which I will never repay’ that excuse either 😉 ).

    I also don’t know why Campbell Ogilvie is still the President of the SFA. Does anyone know why he’s not been relieved of his duties yet?

  13. mick

    for any1 wondering who cambpell olgilvie is heres a link to get up to date on him
    http://en.wikipedia.org/wiki/Campbell_Ogilvie

  14. Tam Maconde

    For years it was well known that most businesses used the witholding of taxes as a means of securing a low interest “loan” but they still paid up within an agreed period only to start all over again in future tax years. The dodos got too greedy and decided not to pay at all.

    • mick

      t@ tam hey thought we were down but via education we rose above them while we were not allowed to do engineering in the ship yards and building sites we had to go to collage and uni to progress they dident they stayed in industries that now obsolete we changed from a industrial nation to a service nation thats what killed them oh and the watp atitude after all the wit school did you go to crap we took we have every right to laugh at them but lets not become the same as them and rub it in to much lolhaha jelly and icecream milk lemonade chocolate education is the key to opression
      they thought the taxman was a ger lol little did they know you need a brian to count lot s

  15. mick

    if you scroll to the 62min of the above show CO speaks quiet openly and mentions forms that will mean only 5 titles stripped rather than 9 as thommo stated in his ch4 blog hes there fixing it for oldco once the minimum amount of titles are stripped he will be of he sounds as if hes going to say when he was in charge at ibrox the forms were diffrent itc docos is the main topic international registration certificate so its well a scoop for tomy gold my fav dj and broadcaster well done to tommy

  16. mick

    tommy is the only member of the media to ask him about ebts and he chats about it for 30mins and not 1 msm paper or channel aired or wrote about it pure gold is tommy

    • COYBIG

      @Mick

      I hate to break it to you Mick, but Tommy ain’t a member of the media, rather a man on a mission 😉 . How he manages to get all their numbers, who knows?

      I lost count of the amount of times I used to hear him on Superscoreboard, as John, Joe, Stephen, Kevin, Jim, Shane, Paul….his list of ‘aliases’ is endless. But they all sound exactly the same.

  17. mick

    http://glasgowradio.blogspot.co.uk/

    the above is a link to his chats with whyte murray and imran you name it hes called them

  18. mick

    http://www.bbc.co.uk/news/business-19967397
    aa little of topic here but starbucks are paying 1% tax so next time go to a sole trader give your hard earned cash to the little company as they put more in when it comes to tax . to think its a 5er for a coffee and muffin 5p gos to taxman shocking
    According to the Reuters investigation, Starbucks generated £398m in UK sales last year but paid no corporation tax time to vote yes and hammer tax avoidence to free up cash for public services am thinking cuts every were and we have this big brand paying virtually no tax

  19. ecojon

    http://sport.stv.tv/football/clubs/celtic/195094-scottish-cup-ban-for-celtic-after-squad-is-depleted-by-international-calls/

    It would appear that as a Nation we are incapable of constructing a sensible football rule book so what chance is there of running an independent country?

    Scottish Cup ban for Celtic after squad is depleted by international calls

    Celtic’s women’s side have been expelled from this season’s Scottish Cup for failing to field a side because 11 of their players were away on international duty.

    The club lodged a petition to have their quarter final fixture with Glasgow City at the end of September postponed, with many of their team absent representing Scotland’s Under-17s side in three qualifying matches in Macedonia.

    As the rules of the competition do not legislate for postponements through call-ups to represent youth level international sides, they were refused permission and told to play the tie.

    Celtic had players available but deemed they did not have enough to fulfill the fixture. Glasgow City were subsequently awarded a walkover and the league champions will face Hibernian in the last four on Wednesday night. Celtic have no right of appeal.

    Rule 42 of the competition rules states: “Any club refusing or failing to play the club against which it has been drawn, without sufficient reason for doing so, shall be judged to have lost the match and liable to a fine.”

    Furthermore, rule 43 goes on to say: “In the aforementioned case, the Board committee shall have the right to take such action as they deem necessary. There is no right of appeal in this matter.”

    Finally, rule 52 says: “Any protest which may interrupt the playing of the Cup shall not be entertained.”

    Both Celtic and Scottish Women’s Football, who operate the competition, were unavailable for comment.

    • COYBIG

      “Rule 42 of the competition rules states: “Any club refusing or failing to play the club against which it has been drawn, without sufficient reason for doing so, shall be judged to have lost the match and liable to a fine.””

      Isn’t having to play for the national team a sufficient reason?

      SWFA “Hey Celtic, help us out and let us call-up some of your players for out national teams”.
      Celtic “OK then, no problem”.
      SWFA “Thanks. Oh by the way, the games are at the same time as your Scottish Cup Quarter-Final, so now you don’t have enough players to play it, we’re chucking you out the competition. Bye”.

    • duplesis

      Have to say that sounds like a daft decision by the board of the SWFA.

      Hmm… failure to take into account relevant facts, and rules which give no right of appeal…

      Judicial review anyone? 🙂

      • ecojon

        @ duplesis

        Because it’s a newspaper article I am trying to stay chilled but I sincerely hope that women’s football in Scotland is not heading down a road that we could all do without in Scotland. It just seems inexplicable. The only way this could be countenanced in the short term would be if the Celtic Women’s team were warned beforehand by the SWFA what the consequences could be.

        But obviously that isn’t a longer term solution as it is obvious the rule book needs rewritten. However, if the Celtic women took the decision knowing the consequences then all I can say is that you really are True Scots and must be aff yir heid 🙂

  20. Andy

    Essentially here though, is that Falkirk were just disputing the penalties, not the bill. If Rangers lose the tax case, then I doubt highly anyone will dispute the penalties on the circa 50m bill. Materially, it would appear to serve as a strengthening of HMRC case against DM and MIH, assuming that is who they plan on pursuing, which their rhetoric so far suggests.

    Does anyone know of a date for the release of the result, I heard rumours it was expected this month, but there has been so many false dates over the past few years that its hard to tell if this is actually going to happen…

    As for BDO voiding the sale of assets, they have to be able to prove they were undervalued at the time of sale…which is inevtiably almost impossible to prove, as it is the market that dictates the price….i.e. if there is only one buyer on the floor when anything goes for sale then they dictate the price, when you have many the seller can name his price….So we have had various number of parties involved and no one could beat Greens offer, which was the best the market was willing to pay at the time. How can BDO prove the asset sale was undervalued when it was the best price available despite numerous interested parties. It is also worth noting that hmrc were comfortable with the arrangement and stated themselves the club will go on as ever, clearly it does not appear that they are all that interested in getting their hands on ibrox…Then there is the final point, BDO acting on behalf of the creditors, may find that by reversing the sale of assets and the implosion that would cause, would actually hurt creditors of oldco as they would no longer be able to gain future trade (hmrc included) from an operating Rangers. The fact that Rangers posted assets of £100m on their balance sheet is largely irrelevant, I could say that is the price of my house, but it doesnt mean its worth that or that anyone is willing to pay that!!

    No one can question the existence of ‘gratutious alienation’, but IMHO BDO will not pursue this route, and even if they did would have an extremely hard time proving it. I suspect DM, MIH will be the first door that is knocked….that is of course assumining HMRC win the ebt case.

    Of course they will go for Whyte over PAYE, but I have a feeling they may find that he goes ‘missing’….

    Note, that I am not advocating the sale to Green as a good or a bad thing, just that I find the views of those wishing the nd of Rangers, and their hope that BDO will come in and shut the doors….a tad fanciful at best!!

    • Andy

      Though, something like that could potentially happen under Greens management…..that is a different story altogether however..

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