United Kingdom: UK tax authority wins case against former owner of Rangers FC (Scotland)

HMRC, the UK tax authority, won its tax case against the former management of Rangers FC (Ladbrokes Premiership) at Scotland’s appeal court on 04/11/2015, thus upholding the original ruling that the use of Employee Benefit Trusts to pay players is illegal.

“The law is clear: the payments made in respect of footballers were in our view derived from their employment and thus the payments were emoluments or earnings,” said one of the appeal judges of the Scotland court. The case refers to financial arrangements used by the club in the 2001 to 2010 time period (see below).

The Glasgow-based club, unable to reach an agreement with creditors, went into administration in February 2012, and was ultimately liquidated as a company. Later that year, the club re-formed as a new company, The Rangers Football Club Ltd, which had to begin at the bottom of the Scottish professional football pyramid, League Two (Scottish fourth division) for the 2012-13 season. The club currently play in the Championship division (Scottish second division).

Rangers FC face no outstanding liability despite the HMRC…