Partner Article

Tax and undue pressure

The collapse into administration in March 2012 of Glasgow Rangers FC excited many fans and pundits.

Some blamed HMRC as the club’s alleged tax problems received lots of press attention, not least bills for PAYE and NIC on £millions that it had allegedly lent to some of its employees tax-free via an offshore employee benefit trust (EBT).

The argument with HMRC in what became known as the Murray Group Holdings case finally reached the tax tribunal in stages, between October 2010 and January 2012, but the decision (which went against HMRC and for the club) was for very good procedural reasons not released until October 2012.

This seems to have persuaded the conspiracy theorists that something suspicious was going on.

Threats of violence to Rangers employees and two HMRC officers led to the original hearings being held in private, and some witnesses agreed to give evidence only if they were granted anonymity. The police even gave advice on personal security.

HMRC’s argument over EBT arrangements is a very big issue, reaching far beyond profligate football clubs, so an appeal against the decision was inevitable.

The question of anonymity for key people arises again when it comes back to the tribunal in early 2014. The SFA’s public report into the Rangers collapse has identified some of the people involved, so the appeal will be heard in public, but the anonymity of the HMRC staff and the witnesses is to be preserved, according to a direction published last week.

HMRC officers must be protected from any threats arising from their doing their job, but that prompts another thought - HMRC is currently trying very hard, despite having lost the argument so far, to persuade employers who have used similar EBT arrangements to settle the claimed PAYE and NIC liabilities before the Murray appeal is heard.

Threats of violence are clearly in no way comparable to threats of extra tax, interest and penalties if employers don’t settle voluntarily, but having lost the first round, shouldn’t HMRC in all conscience suspend its ‘EBT Settlement Opportunity’ until it has actually won the argument?

This was posted in Bdaily's Members' News section by Baker Tilly .