Regular readers will know that I produce some of my best work at weekends despite scant reward. I awoke this morning to one donation of £5 from Donegal. I can confirm that it was not from Phil Mac helping out a fellow award-winning blogger who is down on his luck.
I digress. Prior to my postscript to jj passim – Hector Rides Again – and a detailed exposition of Campbell Ogilvie, I take pause to exclusively reveal that The Poundstretchers Mourinho, Padre Pedro, can be sacked with ninety days notice. This caveat was evidently missed by others who claimed that he had a three year contract. My conviction that I have the best sources in Scottish football is not built on sand.
One of my sources is a tax expert who was kind enough to offer a personal opinion on Rangers’ abuse of EBT. His opinion was predicated on two assumptions:
1. That if they haven’t already done so, that HMRC are still within the legal time limits to raise assessments on the individuals.
2. That Rangers, as the employer, would have known enough to deduct tax at the correct rate for each employee (basic, higher or additional).
The employee is liable for the income tax that is due on their employment income. The employer is required to deduct and pay that over to HMRC and there are rules in place to protect the employee if that doesn’t happen.
Ultimately though, it is the individual that is responsible.
As set out at S13 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA), it is the taxable person that is liable for any tax on employment income. The taxable person is the person to whose employment the earnings relate i.e. the employee. Anyone who is liable to income tax has a duty to notify HMRC (S7 of the Taxes Management Act 1970) that they are so chargeable. HMRC would then make an assessment or invite the individual to make a return. That being said, the individual is exempt from making that notification if all of their income is subject to the PAYE regime.
Ultimately, the PAYE regulations (the Income Tax (Pay As You Earn) Regulations 2003) are simply a collection mechanism. S684 ITEPA 2003 requires HMRC to put them in place. Those regulations require that the payer – the employer generally – deducts and accounts for tax on the employment income that it pays.
This does not remove the liability from the individual.
Most people will point to the fact that Rangers have not paid the tax. It does not necessarily follow that the individuals will have to. Although it is true that they are liable, there is an important protection for the individual at Reg185. It effectively states that in making a self-assessment, the individual is entitled to receive a credit for any tax “treated as deducted” and that includes “any tax…the employer was liable to deduct from payments but failed to do so”. This protects the individual from being punished for the failings/actions of employers (careless or unscrupulous).
There is an argument then that as the Supreme Court have determined that Rangers should have operated PAYE, that the individuals may be entitled to received that credit.
However there is a major caveat. Excluded from that credit is any tax that HMRC directs, under reg.72(5) or Reg 81(4), should be paid by the individual and not the employer.
Very broadly, HMRC can make such a direction if they are “of the opinion that the employee has received relevant payments knowing that the employer wilfully failed to deduct the amount of tax which should have been deducted from those payments”.
So it will come down to the knowledge of the individual and that is when side letters/indemnities and any other documents or information that HMRC holds may become relevant.
As a general point about the indemnity, other than it potentially demonstrating what the individual knew, it won’t matter to HMRC. If HMRC decides that the individual needs to pay, they will pursue the individual. It would then be for the individual to pursue the employer for any indemnity.
The side letters which are effectively dual contracts are the smoking guns. Eighty individuals conspired with executives at Rangers, most notably Sir Bribe & Lie David Murray, to defraud the Exchequer. They will be ragdolled by HMRC.
Those who have come on to this site to cast aspersions on my piece should note that I do my homework. Mindless conjecture can be found on other sites. I deal in facts. Their blushes were spared by their unwillingness to contribute to our site. I chose not to approve their comments.
One of the Rangers executives who was A Gallant Pioneer of this tax evasion was none other than the Incorrigible Campbell Ogilvie.
The following list is the incontrovertible facts apropos this rogue for all seasons:
1.He set up the first Rangers venture into illegal tax schemes on 3 Sept 1999 (Discount Option Scheme) for “a valuable Rangers employee” when he subscribed to two £1 share premiums in Montreal Limited at a subscription price of £2 and a share premium of £149,998 in a letter he signed as Secretary/Director.
2. He attended a meeting as Secretary of Rangers on 16 September 1999 to discuss remuneration planning of Rangers employees at which it was confirmed Craig Moore was to be offered beneficial ownership of the Company’s shareholding in Montreal Limited as a constituent part of the remuneration package to Craig Moore.
3. He knew that Craig Moore was the valued employee at 1 AND from 2 what the Discount Option Scheme consisted of and that it was now part of Rangers employee remuneration planning.
4. He was employed by Rangers, in various capacities until around September 2005 and was there at the time in March/April 2005 when HMRC had made enquiries about side letters re Flo and De Boer.
5. He was a beneficiary of a payment of £95,000 from MGMRT (Employee Benefit Trust) but claimed no knowledge of the details of it.
6. He denied any role in drafting player contracts and assumed all contributions to the trust were being made legally and relevant football regulations were being complied with. (In spite of 1 to 3 and implications from 4.)
7. He gave testimony to Lord Nimmo Smith in the enquiry into player registration and non-reporting of EBT side letters.
8. He did not provide any testimony or clarification to LNS on players named in the Commission List who were in receipt of trust payments with side letters withheld that were paid via the DOS in spite of his knowledge at 1 to 3 and possible knowledge of their illegality stemming from 4 or subsequent public knowledge of the existence of the by then unpaid tax bill resulting from the DOS based Trust.
9. He became President of The SFA in early June 2011 just before the UEFA Licencing monitoring checkpoint of 30th June 2011 process took place, which is being questioned by Celtic shareholders.
10. He could not have informed the SPL of 1, 2 and 3 during the Commissioning of LNS because of the SFA decision to act as appellant body (although subsequently providing key influencing testimony during the enquiry and where a possible alternative of The Court Of Arbitration on Sport or an independent Appeal body could have been set up to carry out the Appellant Role.)
11. He did not correct or comment on LNS’s decision to treat the early DOS Trust and EBT Trusts as continuous in spite of the difference being public knowledge during the time of the enquiry and when LNS ruled, that Rangers had accepted liability for but failed to pay the tax bill which was created as a result of the scheme.
12. He did not comment on or correct the LNS decision arising from 11 which asserted:
“Although the payments in this case were not themselves irregular and were not in breach of SPL or SFA Rules, the scale and extent of the proven contraventions of the disclosure rules require a substantial penalty to be imposed.”
This calls into question Lord Nimmo Smith’s overall ruling which is based on all payments being regular (“not themselves irregular”) when at least three were not regular and so the appropriateness of the penalty imposed and possibly even more of the LNS judgement.
Hugh Adams’ accusations of prior use of trusts to avoid tax was refuted by Sir Bribe & Lie who asserted that no side letters could be found in players personnel files:
“All football rules were complied with. All enquiries from entitled parties or organisations were answered.”
He was of course lying, a lie uncovered by a City of London Police raid.
Campbell Ogilvie admitted that he was ‘aware’ of Rangers EBT scheme but had no role in player contracts. I refer readers to 1,2 and 3.
Ogilvie at the time of questioning vowed to continue in his role as Scottish Football Association president as he insisted he had no role in “drafting or administering” player contracts at Rangers after the mid-1990s. This is a blatant lie. I refer readers to 1, which he executed on 3rd September 1999.
“I have no knowledge of any side contracts and I would be very surprised if that was the case.”
Surely you jest Campbell. Did you set up The Montreal Trust on a whim?
“You know the way the club was run. I was a director and we had a controlling shareholder who ran the club. I don’t know what I could have done. Maybe I should have questioned things more.’
Given that side letters were hidden in the De Boer and Flo cases and both related to payments under the illegal Discount Option Scheme and that Campbell Ogilvie was aware of the distinction between DOS and loan EBTs from his experience in 1999, did he tell the full story in his statements then and does he not now have a responsibility to explain whether the DOS payment to Craig Moore was reported to the SFA as part of Moore’s remuneration package and if the matter of side letters and reporting them was discussed during any remuneration planning meetings he presumably attended as Company Secretary?
The Incorrigible Campbell Ogilvie is a consummate liar, who when found out to own shares which might suggest divided loyalties is quick to transfer them into his wife’s name. Did Ogilvie continue to lie and engage in fraud at Hearts? Is this Budge’s rationale for not speaking up on title stripping?
The Gallant Pioneer of Tax Evasion subverted Scottish football for decades. Will he ever be taken to task?