EBT's and double contracts

[calscot 0]

They had one scheme at least (for Juninho) but have apparently cancelled it and paid the tax liability back on it.

 

That may be - but it doesn't solve the two contracts issue does it? If EBT's are a double contract crime at the SFA, then it seems they are guilty whether they paid the tax or not.

[Juancornetto 1]

That may be - but it doesn't solve the two contracts issue does it? If EBT's are a double contract crime at the SFA, then it seems they are guilty whether they paid the tax or not.

 

It's not as simple as an EBT equalling a double contract though is it? Who's to say that any paperwork exists that says "you will not have to pay this back" or words to that effect? EBT's were in the accounts, were perfectly legitimate and fairly standard. It's the fact that we may have abused them to the point where we were paying more into them than in contractual wages.

[calscot 0]

It's not as simple as an EBT equalling a double contract though is it? Who's to say that any paperwork exists that says "you will not have to pay this back" or words to that effect? EBT's were in the accounts, were perfectly legitimate and fairly standard. It's the fact that we may have abused them to the point where we were paying more into them than in contractual wages.

 

But isn't the whole thing based on the fact that it's a kid on thing about it being discretionary but nobody can really prove it - as how to prove intentions? Again I think the fault lies with HMRC who should not allow tax to be based upon supposed intentions. It's weak at best. It's almost like prosecuting people for joyriding a Ferrari when they test drive it because you then suspect they had no intention whatsoever of buying it...

 

So the premise is that we were "kidding on" and the SFA "know it" - but to me that applies to Celtic too. Their "evidence" for us will be flimsy and subjective.

[stewarty 1,878]

The verdict will be based on the balance of probabilities. So in looking at it, the tribunal is going to have to decide if the payments are discretionary or not, is what I'm led to believe. And part of the reason it's taking so long is because the final judgement might determine whether we ate guilty on an EBT by EBT basis. Ergo, there may be evidence that some EBT payments were not discretionary, and no evidence to suggest this for others.

 

Seems plausible but I tend I agree with calscot that the arguments appear flimsy.

[bigy 0]

The verdict will be based on the balance of probabilities. So in looking at it, the tribunal is going to have to decide if the payments are discretionary or not, is what I'm led to believe. And part of the reason it's taking so long is because the final judgement might determine whether we ate guilty on an EBT by EBT basis. Ergo, there may be evidence that some EBT payments were not discretionary, and no evidence to suggest this for others.

 

Seems plausible but I tend I agree with calscot that the arguments appear flimsy.

 

But, given EBT's were legal and fairly standard practice throughout business, how can HMRC defend prosecuting retrospectively?

 

Also, in our case I think there's a huge debate around who's liable. Are Rangers liable as the employer of the employee who benefited, are Murray Group liable as the company who administered the scheme and made the payments, or are the advisers liable who recommended and set up such a scheme?

 

I think there's a strong argument, from a Rangers point of view, that we made payments to a third party (Murray Group) who operated an EBT scheme. We were reliant on the third party to set up, administer, and run the scheme within the tax guidelines at the time. If they failed to do this then I think there's a strong case that it's Murray Group, and not Rangers, who are liable for the tax as it was and is their scheme.

 

For example, i'm a small business and set up an EBT scheme for 3 of my employees through a building society. I make payments into the trust funds at the building society, and the building society in turn makes discretionary payments to my employees. I am 100% reliant on the building society to administer the fund correctly, and operate within the law. If they don't, am I liable or is the building society liable as the professional service with the expertise to operate the scheme?

 

That's what happened to Rangers, and I have a strong feeling that when push comes to shove it'll be found that any liability falls upon Murray Group rather than Rangers.

[calscot 0]

But, given EBT's were legal and fairly standard practice throughout business, how can HMRC defend prosecuting retrospectively?

 

I think this is the biggest flaw in what HMRC are doing. If they said, "Right, no more of that!" and then hammered anyone after that then fair enough. I can't think of any justice system where this would be considered fair.

[andy steel 0]

<cough>wouldn't happen in an independent Scotland<cough>

[der Berliner 3,302]

I think this is the biggest flaw in what HMRC are doing. If they said, "Right, no more of that!" and then hammered anyone after that then fair enough. I can't think of any justice system where this would be considered fair.

 

This is something I've said from the very start. They only whipped up this new "law" a few years back and going back a decade or so is fine if it was murder or the like, but this isn't. Even if, as they and the mhedia claim, we used them incorrectly. I would assume that there is "limitation of liability in time", though some of our smarter legal brains would know that.