SPL in £100m tax â??dodgeâ?�

[boss 0]

Some extracts from the accounts of The Scottish Premier League Limited:

 

Income - £231million

Corporation tax paid - £nil

 

Last week Starbucks, Amazon and Google were roasted live by the Public Accounts Committee for their “immoral” tax avoidance schemes which enable these companies to trade in the UK but pay virtually no corporation tax. The PAC’s view was that these companies were “at it” and HMRC should investigate and clamp down hard.

 

Which brings us to the SPL. Since 1999 the SPL has declared income of £231,563,000. The amounts then paid out of this income to SPL clubs have only been disclosed in the accounts since 2010, but a reasonable estimate of such amounts based on my analysis of the accounts is £188,076,000. That’s £188million received by the SPL clubs and not one penny paid in corporation tax by the SPL.

 

How can that be so?

 

The normal situation for a company is: it makes a profit, it pays corporation tax on that profit, then anything that is left can be paid as a dividend to the shareholders. Anyone that owns shares in a company (say, BT) will know that when you receive a dividend, you also receive a voucher that shows tax has already been paid on that dividend.

 

The SPL does not treat these payments to the clubs (who are its shareholders) as dividends. Instead, they treat these payments as expenses and claim tax relief on these payments. So the SPL’s accounts end up showing a loss every year and no corporation tax to pay.

 

Based on the corporation tax rates throughout the period, the corporation tax that would otherwise have been due on £188million would have been in excess of £55million. If the SPL was subsequently found to have wrongly “dodged” corporation tax, you can add interest and penalties to that and the final bill would be more than £100million.

 

That is one hell of a lot of schools, hospitals, nurses and teachers. The hypocrisy of the SPL moralising over Rangers’ tax situation is breathtaking.

 

On receipt of the £188million, the clubs themselves have paid virtually no corporation tax, perhaps none at all. Most clubs either make losses, or have previously made losses that they can use against current profits, so they themselves generally have no corporation tax to pay.

 

All it would take would be for HMRC to revisit the SPL’s tax treatment (sound familiar?), change their view on the application of tax law (sound familiar?) and decide that tax should have been paid after all (sound familiar?). There but for the grace of HMRC go the SPL.

 

Of course, we would then have the hollow excuses from the SPL: “took professional advice”, “acted within the law at the time”, “HMRC changed the goalposts”, all of which again sounds pretty damn familiar.

 

There would be a delicious irony if such a fate befell the SPL, upon whose financial collapse HMRC sought to recover such tax from the clubs who were willing participants in the structure. As Pyramus might say: “Now die, die, die, die, die”.

 

This mess is best summed up by the PAC chairman, Margaret Hodge when referring to the serial tax "dodging" companies: “We are not accusing you of being illegal, we are accusing you of being immoral”. Perhaps she should call Mr Doncaster to appear before the committee for a roasting.

[the gunslinger 3,366]

won't tax be paid by the clubs once the cash is distributed if appropriate.

[boss 0]

won't tax be paid by the clubs once the cash is distributed if appropriate.

 

Morning my erstwhile friend. :cheers:

 

No, I have made the point in the article that virtually no (perhaps indeed zero) corporation tax has been paid on this money, even by the clubs. They have tax losses that mop up this 'profit' and leave no tax paid.

[calscot 0]

Morning my erstwhile friend. :cheers:

 

No, I have made the point in the article that virtually no (perhaps indeed zero) corporation tax has been paid on this money, even by the clubs. They have tax losses that mop up this 'profit' and leave no tax paid.

 

To be honest that sounds fair enough. If no profit is being made then no tax is due. A hell of a lot of tax gets paid on the PAYE of the players. If wages are 66% of turnover, HMRC must be getting about 30% of the money. Then add in VAT and other taxes and you're talking they get 50% of the money. Should they really take more?

 

I think it's a good example to show how hypocritical they are but in the end, for me it shows that HMRC are the immoral ones, not Rangers and the SPL.

 

I think HMRC needs to make the rules work better, let eveyone know clearly what they are and be on the ball when someone makes a mistake and retrieve the money within a year. They also need to remove any wishy washy tax avoidance scenarios.

[Frankie 8,199]

Fascinating stuff - maybe worth emailing over to Maureen Leslie at MLM for some commentary?

[der Berliner 3,327]

Why not post it on the main site? It goes global and will at least cause some concern and maybe someone will ask questions after all?

[aweebluesoandso 290]

To think the SFA and SPL know this all to well yet moralised on our EBTs. Hypocritical is far to lame an accusation.

[BeardyGuts 6]

Could this not be a similar setup to the NFL in the states where it is setup as a non profit organization therefore tax exempt?

[boss 0]

The SPL isn't a not for profit organisation. It doesn't make a 'profit' but that's not the same thing.

[EDGE 0]

Corporation tax is paid on profits, if the SPL isn't making money then it wouldn't pay CT. The SPL is a bank that distributes the money to clubs.