Generic Sevco / Rangers meltdown thread

[Brizo]

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Most employees would trust their employers to pay the correct amount of tax but yes the players have been misled here I would say as they were told it was loans.

Id guess that regardless of what tax advice the players and others received from their accountants and RFC, individuals are ultimately responsible for their own tax affairs. My understanding is that the taxman can charge penalties on top of the PAYE and NIC due and that while a defence of being "misled" might reduce any penalty, the PAYE and NIC can't be negotiated down from what is due ?

[HIGHLANDLEITHER]

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That would only be a goer if the players were held to be liable for the tax. And they'd get next to nothing out of Oldco.

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The players all have advisers who look after their tax affairs. Any decent adviser would have pointed out that the deal broke EBT rules in the payments being promised to individuals and being regular rather than on off payments. It therefor follows that the employee is responsible who then may sue his adviser or former employer. HMRC don't want to be going down that route themselves.

[Crazyhorse]

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Most employees would trust their employers to pay the correct amount of tax but yes the players have been misled here I would say as they were told it was loans.

I'm not clear how the players were mislead. They were paid a salary and on top of that negotiated additional payments (income/loans) which no one paid tax on.
I receive a salary but I do other work (consultancy) and I also receive tax statements for that. As far as I can see the oldco-player shenanigans are like me agreeing a deal with a builder to do my garage where I agree to pay half of the cost cash in hand but we sign an official contract for the other half. With the added twist that he doesn't trust me (maybe I supported Rangers Mk 1) and insists I supply him with a letter promising to pay the hidden half. Seems to me we are both under no illusions we are cheating the taxman.

[CropleyWasGod]

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If the players are due money then that is a football debt and Sevco have agreed to honour all football debts?


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The players aren't due any money

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[HoboHarry]

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The players aren't due any money

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Does Ozy not mean the players being due to pay money to the taxman?

[Ozyhibby]

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The players aren't due any money

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Do they not have comfort letters from Rangers indemnifying them from any tax due from the scheme and saying Rangers will pick up the tab?


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[Smartie]

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Does Ozy not mean the players being due to pay money to the taxman?

I think I know what he means.

Someone is due HMRC money, and they are going after the players. The players should not be due to pay the money, for reasons outlined above by CWG.

If there is a tax debt to be paid to HMRC and it is not due by the players, then it should be due by the club. So far Sevco have managed to wriggle out of all such debts as they were borne by Oldco.

However, one of the stipulations of the 5 way agreement was that newco were to pay football debts in full. Surely that is not only the money due to other clubs, but all players they had at the time? If these players end up owing HMRC then surely the players should be reimbursed by Sevco as they are a football debt?

If money were to be the main priority of these players then this would surely be the best route for them to go down.

If they preferred not to inflame ra peepul however..........

[CropleyWasGod]

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Does Ozy not mean the players being due to pay money to the taxman?

I thought he was at the wind- up

The players aren't due to pay HMRC anything yet. There's a lot to be played out before that happens.

IF it happens, and IF the players then sue Oldco... then we'll be onto Season 8 with lots more Court cases.

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[CropleyWasGod]

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Do they not have comfort letters from Rangers indemnifying them from any tax due from the scheme and saying Rangers will pick up the tab?


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...which Oldco already have. That's one of the principles that will be at stake when the arguments start.

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[Ozyhibby]

Found it. Last paragraph.




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[Billy Whizz]

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I thought he was at the wind- up

The players aren't due to pay HMRC anything yet. There's a lot to be played out before that happens.

IF it happens, and IF the players then sue Oldco... then we'll be onto Season 8 with lots more Court cases.

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I know exactly what he means. Some teams have bought players they can’t afford to win trophies. Rangers used EBT’s to win trophies. So he sees these as a football debt

[jacomo]

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It's not odd; it's HMRC's normal way of dealing with cases like this, where a PAYE scheme has been improperly administered.. It was the basis of the assessment they made on Oldco, and why it was so high.

For example, Oldco paid Ferguson £2.5m. That is treated as a NET salary of £2.5m, ie after PAYE and NI. HMRC gross that up, let's say to £5m, being the gross equivalent, and add a further £500k for Employer's NI. Thus Oldco owe them £3m.

I understand what you are saying.

However, there is also the common understanding that, for a salaried employee, both employer and employee pay contributions to HMRC in the form of NI and income tax.

Neither has done so, so surely both (Oldco and beneficiaries) are liable?

It should be easy to work out how much. Every time I’ve been offered a job, the salary I’ve been offered is obviously gross, not net.

Pay up Huns!

[Hibs Class]

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Found it. Last paragraph.




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I would take that to mean if a player ends up with a tax liability the club would reimburse them. If the club is bust and the indemnity worthless it wouldn't affect the question of the players' primary liability

[CropleyWasGod]

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I understand what you are saying.

However, there is also the common understanding that, for a salaried employee, both employer and employee pay contributions to HMRC in the form of NI and income tax.

Neither has done so, so surely both (Oldco and beneficiaries) are liable?

It should be easy to work out how much. Every time I’ve been offered a job, the salary I’ve been offered is obviously gross, not net.

Pay up Huns!

It's already been worked out. That's what Oldco were assessed for, and was the basis of the Court case.



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[Ozyhibby]

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I would take that to mean if a player ends up with a tax liability the club would reimburse them. If the club is bust and the indemnity worthless it wouldn't affect the question of the players' primary liability

But Sevco have agreed to cover all football liabilities so should be no problem?


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[Jack]

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There are 2 basic holes in HMRC's case for doing this, and I suspect any decent adviser will be making that point:-

1. by the Court finding in HMRC's favour, they have deemed Oldco to be the employer, and thus responsible for paying the tax and NI. It's irrelevant that they can't pay it. Oldco should be treated as any other employer that has gone into liquidation; after all, no-one expects the employees of any such company to pay the tax company's debts.

2. the assessment that HMRC made of Oldco's liability made the assumption that the payments to the players were net of PAYE and NI. In other words, that the players had already paid their dues. They can't be taxed twice.

This won't be as easy as that piece suggests.

I have two questions for the learned examiner but they may be outwith your expertise :-)

Is the letter, referred to by the BBC, maybe just a 'con' from this company hoping to elicit fees from the former players to sort out their tax mess? As in we'll sort out your tax issues for half a million, to HMRC, plus fees but if you don't take up our offer you're likely to be due a million. (60% of marks available)

And ...

If there is any balance in the players 'loan' accounts could HMRC grab it? (40%)

[CropleyWasGod]

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I have two questions for the learned examiner but they may be outwith your expertise :-)

Is the letter, referred to by the BBC, maybe just a 'con' from this company hoping to elicit fees from the former players to sort out their tax mess? As in we'll sort out your tax issues for half a million, to HMRC, plus fees but if you don't take up our offer you're likely to be due a million. (60% of marks available)

And ...

If there is any balance in the players 'loan' accounts could HMRC grab it? (40%)

1. Well spotted. And I would've gotten away with it if it hadn't been for those pesky kids.

2. They'd have to have a square go with their lawyers first.
.


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[ancient hibee]

The Revenue will never get away with what Trident say is happening.The idea that they can go after employees of a failed company because that company did not remit tax to the Revenue that the Revenue already agree has been deducted from the employees would be laughed out of court.If House Of Fraser finally goes to the wall they would never try to get unremitted tax from the employees,there would be a revolution.

[Jack]

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1. Well spotted. And I would've gotten away with it if it hadn't been for those pesky kids.

2. They'd have to have a square go with their lawyers first.
.


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Top of the class. I think!

[majorhibs]

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There are 2 basic holes in HMRC's case for doing this, and I suspect any decent adviser will be making that point:-

1. by the Court finding in HMRC's favour, they have deemed Oldco to be the employer, and thus responsible for paying the tax and NI. It's irrelevant that they can't pay it. Oldco should be treated as any other employer that has gone into liquidation; after all, no-one expects the employees of any such company to pay the tax company's debts.

2. the assessment that HMRC made of Oldco's liability made the assumption that the payments to the players were net of PAYE and NI. In other words, that the players had already paid their dues. They can't be taxed twice.

This won't be as easy as that piece suggests.

C’mon now! You’ve been taking the zombies side for 5 yrs plus easy, I reckon you must be a clever ex official or player protectin yer nest egg, you find an anti angle every time it looks good, once & fer all they died in 2012 & anything thereafter is a new club, & I reckon with your brains your that clever clogs Iain Ferguson ex St Mirren & Zombies & no popular at aw wi Scotland fans!

[CropleyWasGod]

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C’mon now! You’ve been taking the zombies side for 5 yrs plus easy, I reckon you must be a clever ex official or player protectin yer nest egg, you find an anti angle every time it looks good, once & fer all they died in 2012 & anything thereafter is a new club, & I reckon with your brains your that clever clogs Iain Ferguson ex St Mirren & Zombies & no popular at aw wi Scotland fans!

Iain Ferguson is my sponsor at MENSA.

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[O'Rourke3]

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Iain Ferguson is my sponsor at MENSA.

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[majorhibs]

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Iain Ferguson is my sponsor at MENSA.

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There was me tryin for a bite fi leftfield tae! Secretly, I was convinced it wis drunken Duncan!

[Ozyhibby]

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The Revenue will never get away with what Trident say is happening.The idea that they can go after employees of a failed company because that company did not remit tax to the Revenue that the Revenue already agree has been deducted from the employees would be laughed out of court.If House Of Fraser finally goes to the wall they would never try to get unremitted tax from the employees,there would be a revolution.

The HMRC position will be that the employee colluded with the club to avoid paying this tax. This was not just a case of the club not paying tax they had collected. The players were in on the whole scheme.


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[ancient hibee]

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The HMRC position will be that the employee colluded with the club to avoid paying this tax. This was not just a case of the club not paying tax they had collected. The players were in on the whole scheme.


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The Revenue has already won a case stating that tax was deducted and the payment to the employee was net.They can’t now argue that the employee is liable.As for what you are suggesting about collusion that would be a criminal offence and there is zero chance of that happening.

[majorhibs]

Wow, appears to be some angst ridden nervous EBT recipients around, eh?

[1875godsgift]

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The Revenue has already won a case stating that tax was deducted and the payment to the employee was net.They can’t now argue that the employee is liable.As for what you are suggesting about collusion that would be a criminal offence and there is zero chance of that happening.

Just out of interest, why do you think there is zero chance? Is it because it was so long ago?

[Tomsk]

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Just out of interest, why do you think there is zero chance? Is it because it was so long ago?

Because he's one of the 20.

[Crazyhorse]

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The Revenue has already won a case stating that tax was deducted and the payment to the employee was net.They can’t now argue that the employee is liable.As for what you are suggesting about collusion that would be a criminal offence and there is zero chance of that happening.

Deducted by who, the Revenue? If it was deducted Oldco must have paid their taxes and there there must be a record of it. I assume it would have appeared in Oldco accounts. Why all the business of side letters, etc?

[southern hibby]

Right here’s my 3p worth.

If it’s wages ( as we and the courts see it ) tax and NI has to be paid by both employer and employee.

If it’s a Loan as Oldco and the players have said it is. Then surely this money should be recovered and shared out by all the folk who were shafted when Oldco ceased to exist?

GGTTH