THE EMPLOYEE BENEFIT TRUSTS used by Glasgow Rangers FC did not constitute "financial doping", according to the Ibrox club's former chairman Alastair Johnston.
He rejected claims the club gained an unfair sporting advantage by paying players using the controversial tax scheme, and maintained the same players would have been signed by the club anyway, reports STV.
It is believed that, between 1993 and 2003, Rangers paid its players through the EBTs, which work by providing employees non-repayable, interest-free loans.
"Our opponents maintain, illogically, that without the use of EBTs, Rangers would have been unable to afford the quality of players that they fielded and thus gained an advantage over other clubs against which they competed," Johnston said, in a statement released through the Rangers Supporters Trust.
He added that former owner Sir David Murray, who was involved in setting up the EBTs as part of "efforts to organise the business in a way to mitigate taxation", was "totally legitimate and acceptable under all tenets of the law" and the club "would have signed and paid for these very same players whether or not EBT schemes were in effect".
A tax tribunal is yet to reach a verdict on whether EBTs constitute tax avoidance, while the Scottish Premier League is conducting an investigation into whether the arrangement breached its rules.
The club was liquidated after the taxman vetoed a company voluntary agreement (CVA) to save the stricken club in June.
Options open to the SPL include stripping the club of its titles, while it could face a bill from HM Revenue & Customs of as much as £24m.
... wouldn't he - he's not going to say that he was the chairman but thought it was wrong!
Fact of the matter is, it has been pretty well proven that in the case of several players, by their own admission, the money was meant to be part of their regular contracted earnings, which contravenes the principles of an EBT and hence HMRC are wanting their cut of the money. Plus the SFA was unaware of the side letters that covered "earnings" taken through the EBT scheme, so the club also acted outwith the laws of the game in Scotland.
For years the old RFC borrowed from Peter to pay Paul and lived beyond their means to try and put the best team on the pitch - the fact that they went bust and subsequently liquidated proves that over a number of years they won titles and cups by using a variety of unfair advantages.
And no. to all those interested, I'm not a Celtic supporter.
Posted by: Peter Swift, 17 Sep 2012 | 08:53
You may also like
If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.
In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.