HMRC Appeal against Rangers Ruling

February 4, 2013

HM Revenue and Customs (HMRC) have appealed against the tax tribunal ruling that favoured Rangers’ use of Employee Benefit Trusts (EBTs).

The case will be heard at an Upper Tier Tax Tribunal (UTT) after the original complaint was found in Rangers’ favour at a First Tier Tax Tribunal (FFT).

HMRC claim the EBTs scheme which was used from 2011 to 2010 to make £47.65m ($74.97m) in payments to players and staff, sale through tax-free loans, was illegal.

In November, three judges at the FFT ruled that the EBT were loans and not earnings, and were therefore not liable for income tax.

If the UTT cannot solve the debate, the case may go to the Supreme Court and could take years to settle.

Rangers, who are now playing football in the Scottish Third Division, began using the EBTs while owned by Sir David Murray, who sold the club for £1 in 2011.