HMRC’s penalty shoot-out Rangers – football clubs beware!

The Supreme Court have, after a seven year legal battle, made a ruling in the legal dispute between Rangers and HMRC over unpaid tax.

The decision, which ruled in favour of HMRC, could have far reaching effects on football clubs which have used tax-free loans to pay players, managers and directors.  In Rangers case the unpaid tax bill will be more that £47m.

In an attempt to reduce tax bills for the players etc, clubs put millions of pounds into Employee Benefit Trusts (EBTs), which were taken as tax free loans, therefore avoiding paying PAYE and NI.

The scheme has been used by several clubs in England and although some have agreed settlements, HMRC can now demand repayment of unpaid tax without needing to go to Court.  HMRC are urging anybody who has used an avoidance scheme, to agree a settlement figure with them asap.

We could see more of this as HMRC, over the next three years, are to visit every English premier and championship leagues and Scottish premier league to review arrangements which have been made with them.

Watch this space!!

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