More EBTs in Tribunal

[webberg]

A long but required read I think.

TC/2014/05941

This is three EBT schemes used by owned controlled businesses who were all subject to Regulation 80 determinations, to collect PAYE on amounts paid into trust for the benefit of directors and senior staff.

The schemes date from 2007 and 2008 and were promoted by a division of what was then RSM Tenon (not to be confused with the current RSM business which is entirely different).

Expected outcome in the present environment, i.e. PAYE is due as the amounts are earnings of the individuals.

No idea if an appeal might be made. The companies may no longer exist for all I know (not checked) but we know that in other instances, HMRC has indicated that they will pursue individuals who controlled the companies for the debt. I'm not competent to comment on whether that is possible under Insolvency law.

The Rangers decision was approved and included in the logic behind the result.

[WalterWhite]

A long but required read I think.

TC/2014/05941

This is three EBT schemes used by owned controlled businesses who were all subject to Regulation 80 determinations, to collect PAYE on amounts paid into trust for the benefit of directors and senior staff.

The schemes date from 2007 and 2008 and were promoted by a division of what was then RSM Tenon (not to be confused with the current RSM business which is entirely different).

Expected outcome in the present environment, i.e. PAYE is due as the amounts are earnings of the individuals.

No idea if an appeal might be made. The companies may no longer exist for all I know (not checked) but we know that in other instances, HMRC has indicated that they will pursue individuals who controlled the companies for the debt. I'm not competent to comment on whether that is possible under Insolvency law.

The Rangers decision was approved and included in the logic behind the result.

When are we likely to know if the Rangers players that used the EBT are likely to be hit with tax bills? Is there any idea?

[webberg]

When are we likely to know if the Rangers players that used the EBT are likely to be hit with tax bills? Is there any idea?

Do you think that's likely?

The liability fell on the employer and there is every indication that the employer in question has access to several million pounds and chances are that HMRC will represent the largest creditor in the liquidation and as such will recover substantially all the assessed amounts.

Any remaining liability, being pursued against somebody who is probably non resident, who has a pretty good defence to any attempt to transfer a PAYE liability and probably the resources to get good legal help, may be given up as not worth the effort?

[lennie small]

A long but required read I think.

TC/2014/05941

This is three EBT schemes used by owned controlled businesses who were all subject to Regulation 80 determinations, to collect PAYE on amounts paid into trust for the benefit of directors and senior staff.

The schemes date from 2007 and 2008 and were promoted by a division of what was then RSM Tenon (not to be confused with the current RSM business which is entirely different).

Expected outcome in the present environment, i.e. PAYE is due as the amounts are earnings of the individuals.

No idea if an appeal might be made. The companies may no longer exist for all I know (not checked) but we know that in other instances, HMRC has indicated that they will pursue individuals who controlled the companies for the debt. I'm not competent to comment on whether that is possible under Insolvency law.

The Rangers decision was approved and included in the logic behind the result.

Co's still in existence and strong balance sheets.

Strangely, HMRC appear to have sought to appeal and been refused by FTT.

See also OCO and Toughglaze thread.

[webberg]

Strangely, HMRC appear to have sought to appeal and been refused by FTT.

I'm not following this comment.

Could I ask you to explain please?

[lennie small]

I'm not following this comment.

Could I ask you to explain please?

Apologies -Reference was to Oco and Toughglaze. Though HMRC won on Ramsay principles they requested FTT to consider Reg 80 and S 8 in the light of the Rangers Supreme Court decision.

FTT refused to reconsider. (See Bailii)

[FakeHorizon]

Do you think that's likely?

The liability fell on the employer and there is every indication that the employer in question has access to several million pounds and chances are that HMRC will represent the largest creditor in the liquidation and as such will recover substantially all the assessed amounts.

Any remaining liability, being pursued against somebody who is probably non resident, who has a pretty good defence to any attempt to transfer a PAYE liability and probably the resources to get good legal help, may be given up as not worth the effort?

The highest profile user of the Murray Group EBT scheme, David Murray, wouldn't have been employed by Rangers, he'd have been employed by the parent company which is in liquidation and certainly won't have millions to hand out to creditors. He would be liable for around £3-4m in tax/interest/penalties, and is resident in the UK. HMRC would not give up on that amount, surely? The highest profile user who would have been employed by Rangers FC recently declared bankruptcy in a pre-emptive action, did his advisers warn him to expect a huge bill regardless of the decision in the SC or is he just clearing up his affairs well in advance of 2019. Who knows.

[BrilloPad]

The highest profile user of the Murray Group EBT scheme, David Murray, wouldn't have been employed by Rangers, he'd have been employed by the parent company which is in liquidation and certainly won't have millions to hand out to creditors. He would be liable for around £3-4m in tax/interest/penalties, and is resident in the UK. HMRC would not give up on that amount, surely? The highest profile user who would have been employed by Rangers FC recently declared bankruptcy in a pre-emptive action, did his advisers warn him to expect a huge bill regardless of the decision in the SC or is he just clearing up his affairs well in advance of 2019. Who knows.

David Murray is rich so HMRC will not bother. They only go after poor people.

[eek]

The highest profile user of the Murray Group EBT scheme, David Murray, wouldn't have been employed by Rangers, he'd have been employed by the parent company which is in liquidation and certainly won't have millions to hand out to creditors. He would be liable for around £3-4m in tax/interest/penalties, and is resident in the UK. HMRC would not give up on that amount, surely? The highest profile user who would have been employed by Rangers FC recently declared bankruptcy in a pre-emptive action, did his advisers warn him to expect a huge bill regardless of the decision in the SC or is he just clearing up his affairs well in advance of 2019. Who knows.

Why are you once again making assumptions that are wrong and don't match the facts - this time it took 1 10 second search to find out you are incorrect and wrong....

from http://www.rossmartin.co.uk/sme-tax-...s-big-ebt-case

Murray Group executives and football players were all 'paid' via loans from the club's EBT for nearly ten years from 2002 in a scheme designed to avoid PAYE and NICs.
Players were contracted by the club for comparatively low salaries but under the terms of a 'side letter', the club paid cash bonuses into its EBT which in turn appointed the cash into various sub trusts for the players and their family. Players contracts had to be registered with the Scottish Football Association, however the*side letter was not disclosed.
Arrangements for payments to the chief executive Sir David Murray and others were more informal. Funds were just paid to the EBT which in turn appointed them to sub trusts for the players' families.

Oh and HMRC know there is no money left to claim from the employer who paid into the scheme. That's not the point of the story here it was pick a winnable case and fight it to generate appropriate case law to then force everything else into....

[FakeHorizon]

They've been after him for years, I doubt they'll just give up now. Not that anything will be made public. But HMRC will have to raise a claim with the liquidators of Rangers PLC if they want to collect their prize money, that will be in the public domain and of interest.