Are The Rangers Headless Chickens Coming Home To Roost?

Dear JJ,

I believe it was Harold Wilson who first coined the phrase that a week was a long tome in politics. I have no hesitation in suggesting that the past week has been a long time in Scottish Football politics. The Takeover Panel decision to take Dave King and his concert party activities to task is a boon for those who have been quick to decry this carpetbagging career criminal. How long can he continue as the shadow director in chief of Rangers Lite? Is it not about time that the SFA grew a pair and suspended him from any activity apropos their member club? How long can those charged with Scottish Football governance sit on their hands? What kind of self-styled saviour of the club engages in an illegal conspiracy, uses hacked information to undermine the previous regime, lies about nominated advisers and for an encore has the equity delisted from its Junior AIM exchange?

He is as beneficial as an outbreak of cholera.

I cannot think of anyone more deserving of the City’s very own Black Spot, namely The Cold Shoulder. Will the SFA allow King to direct financial negotiations right under their noses despite being a pariah in he City?  One realises that by conflating Scottish Football with Governance one is engaging in an oxymoron, but how stupid can these people be? Sufficiently stupid not to engage in a regime of drug testing. King has been laundering money right under their noses. His first £20m was rinsed for £5m by David Murray, with the latter going on to play a losing game of ‘craps’ with a billion pounds of Scottish savers’ money. It was very much a case of ‘hail fellow pirate well met.’

What will it take to put a stake through the heart of this spiv succubus?

Just when the ramifications of your Takeover Takedown piece were beginning to percolate like Lady Bear’s Blue Mountain coffee, you stepped up with a sawn-off shotgun with The Black Spot. One hardly had time to draw breath before one was immersed in the nuances of tax legislation, with Julian Ghosh reverting to what can best be described as Robert Burns prose with the use of ‘t’ when he meant ‘to’. What a ‘t it’.

I must confess that I did not catch much of the second day’s play as it was Bond Week in the sexual role play that Lady Bear and I engage in to while away the quiet afternoons in the Chalfonts. When Lady Bear stepped out of the shower in her white bikini with one of her Sabatier knives strapped to her thigh, doing a very passable impression of Honey Ryder, who was I to play Doctor No?

I digress. One realises that the majority of Celtic supporters have engaged in what can best be described as a foundation course in sports law, but as a Rangers man reared on the good old days of tax evasion and dual contracts, I chose to look away when Tore Andre Flo rocked up Edmiston Drive for a King’s ransom. One could tell that David Murray was engaging in a ‘pissing contest’ with the East End Biscuit Tin Politburo. Little did we know at that time that Murray, in a move that would bring a tear to Lance Armstrong’s eye, had strapped a catheter to his thigh so that he could piss up a storm. His introduction of the Discount Option Value Shift Scheme was beyond the yen of the Celtic HND undergraduates, but caught the eye of one intrepid fellow who went by the name of The Rangers Tax Case Blogger. Had it not been for his sterling work, and to give credit where it’s due to Andy Muirhead of Scotzine (are they one and the same?) we would have been in the dark about the piracy in the Govan dry dock. Phil Mac was the pathologist who performed the autopsy with his book ‘Downfall’. This led to such an outpouring of indignant outrage that Mr Macgiollabhain dressed up as Salmon Rushdie for some respite.

This begs the question JJ. Are the Rangers headless chickens coming home to roost?

Lady Bear has just emerged from the garage with a can of gold paint. Time to don a cummerbund and bow tie and add a diphthong to my pronunciation of SMERSH.

Underneath the mango tree / Me honey and me can watch for the moon   

Underneath the mango tree / Me honey and me make boolooloop soon

Yours in Rangers,

Edward ‘Teddy’ Bear Esquire,

The Chalfonts,

Buckinghamshire WATP 1690


Dear Teddy,

Honey Ride Her was appositely named. Quite the girl. Even a conflation of Jackie Bird and bush cannot hold a candle to Ursula Andress in her pomp.Which reminds me, how is Super Ally, your Siamese cat, settling in to his Chalfonts digs? Does he still require The Evening Times to elicit a good dump?

The theme of trouble in Paradise chimes with events at our very own Club Tropicana 1872. Three directors have  just stepped down from their board. Iain Leiper, Laura Fawkes and Joanne Percival were elected to office in September,

The trio’s resignation leaves  James Blair, William Cowie, Alex Wilson and Craig Houston at the helm. I’m sure there’s no truth in the rumour that they had to  do ‘walking away’ prior to Dave Black Spot King swinging in to Govan dry dock to deprive 1872 of their pieces of eight.

There can be little doubt that Leiper, Fawkes and Percival are giving King The Cold Shoulder.  Je Suis Graham was on hand to engage in some crisis management:

Club 1872 has been advised of the resignation of 3 directors, Iain Leiper, Laura Fawkes and Joanne Percival. Club 1872 is disappointed that these directors are unable to see out their term of office but does thank them for all of their hard work, dedication and efforts to date. Becoming a director of the Club 1872 is a considerable undertaking and we should be grateful to all of those willing to take this step. The remaining Directors, James Blair, William Cowie, Alex Wilson and Craig Houston remain and have each committed to continue to serve Club 1872, its members and the vision and objectives of an organisation which is run for and by its members. The Board has made efforts over the last few days to deal with the practical consequences of the resignations. This has included speaking to our employee, dealing with the transfer of passwords and social media accounts, reassigning work streams and many other matters. A dialogue has also been maintained with the resigning directors. We are conscious that they were elected by you, our members and that you would want us to deal with them professionally and with respect.”

I almost reached for a David Murray catheter to piss myself laughing when I read of a ‘Considerable Undertaking.’ Craig Houston’s previous history of high command was helping Sandy Chugg run his Temazepam Tuck Shop. Forgive me if I demur on the august qualities required to give King all of their money all of the time.

The SMSM would have us believe that King is jetting in to meet Caixinha. This is pure poppycock. Adam Ant singing ‘Stand and Deliver’ would be closer to the mark.

King is nothing if not a Dandy Highwayman.The Gullibillies who hand over their hard earned £18.72 per month for shares will soon be engaging in a round of King cleansing.

Does King actually need to mount them before they realise that they are being shafted?

Rangers Lite were quick to distance themselves from the proceedings at the Supreme Court. Colour me surprised. When perpetrating a lie that your Pantomime horse of RIFC/TRFC is a continuation of the old club, it does not play well when dead Dobbin turns up on a slab in London’s Parliament Square.

For my money The Supreme Court will uphold the Inner House rulings as Andrew Thornhill was as shifty as Dave King on a bare week. In the unlikely event that they prefer a bit of Heidi Poontang, the EBT recipients will still be squealing like piglets on their way to being pork kebabs.

A week where King and Barry Ferguson were skewered will not play well at The Daily Rectum. Their King/Caixinha season ticket drive will dominate their copy in the coming week. One can but hope that Pedro remembers not to congratulate Celtic on their sixth successive title. ‘Go Hoops’ will be as proscribed as The Famine Song, not that the klan have any hesitation in belting out the latter. One wonders how Caixinha will take to wading in his own blood. If he reverts to ‘Go Hoops’ he will soon find out.

Yours in exile


Taking the SFA to Task

The Orwell Fellow a.k.a. The Rangers Tax Case blogger sent the following Tweet to the SFA at the conclusion of the Supreme Court proceedings:

“@scottishfa  How often does HMRC serve SFA with Schedule 36 notices relating to member clubs? If unusual, did it trigger concerns within SFA?”

Stewart Regan, in an address to students at Edinburgh Univesity’s Potter Row on, pause for laughter, financial fair play, referred in passing to a nameless blogger. He was almost certainly referring to the Orwell prize winner. The RTC blogger asks the questions that the SFA are most loath to answer.

The following is an extract of Schedule 36 from The Tax Journal:

HMRC may issue three types of information notice:

a notice served on the taxpayer to ‘check’ their ‘tax position’ (para 1);
a notice served on a third party to check another’s tax position (para 2); and
a notice served on a third party in respect of a person or persons whose identity is unknown

HMRC served the SFA with a schedule 36 notice to enforce disclosure of documents relating to their member club, RFC plc, and its tax provisions. Now most organisations when served with one of the most draconian notices at the disposal of HMRC would have asked questions of the party under investigation. In the circumstances, one would not have been surprised had they summoned executives of RFC plc and demanded full disclosure under threat of rescinding the member club’s SFA licence.

So what did the SFA do when the HMRC balloon went up? Yes you’ve guessed it, they did the square root of fuck all. Campbell Ogilvie was so compromised by his DOS/VSS execution and EBT receipt that Regan went on record to defend the legitimacy of EBT to Alex Thomson of Channel 4. We have not heard a peep from Regan since The Inner House ruled that EBT were constructs for disguising remuneration and evading tax.

When the Supreme Court pass down their final ruling and HMRC proceed to take down those who benefited handsomely from EBT, one of the first priorities must be to remove Regan from his corrupt sinecure. If your club does not raise a motion of no confidence in Regan, withhold your season ticket money. Force this corrupt bastard out of office and sweep his whitewash LNS commission out the door behind him.

But don’t stop there. Go after Neil Doncaster and his corrupt continuation dogma, where a club in liquidation transferred its titles to a corporate construct formed from a basket of assets in 2012. Those who have perverted the truth for personal gain must be stripped from office.

The whiff of corruption from Hampden is overwhelming.

n.b. Should Aberdeen lose to Hearts today and Celtic prevail at Dundee tomorrow, the team from Glasgow’s East End will be champions. After the disappointment of Sunday it might be a big weekend for those who follow the Hoops.

Heads You Lose, Tails You Lose

As regular readers will note, I’m my own harshest critic. Keyboard warriors line up every day to have a kick at me, but they’re wasting their time. Others conspire to maim and kill me, and despite being known to Police Scotland, I am the one who was given four hours notice to quit possession of my home. In doing so I spared my neighbours from the clear and present danger of petrol being poured through my letter box and ignited as I slept. The smoke inhalation would have probably killed me but I would still have had a chance of surviving by jumping out my window and doing my best to cushion a 50 feet fall by using the training I was given prior to engaging in a parachute jump to raise money for The Macmillan Trust. My elderly widowed neighbours would not have fared so well.

My coverage of the Supreme Court hearing has been savaged. Despite 56,960 hits yesterday, following on from just short of 50,000 on Day One, the criticism has come thick and fast. If donations are any guide, one of £5, one for £4 and one for £1, and one failed recurring payment, my coverage was very poorly received. I often ask myself if I’m wasting my time.

  • Someone who has not been wasting his time is the anonymous Rangers Tax Case blogger. Following on from his much deserved award of the Orwell Prize, he has been offered, and accepted, an Orwell Prize Fellowship. My congratulations are sincere and heartfelt. However one should never lose sight of the fact that he had to remain anonymous in what passes for a civilised society in Scotland. A society where a sect with the social mores of the late 17th Century openly express their antipathy to Irish Catholic Scots with impunity. They  blatantly celebrate  ‘being up to their knees in fenian blood’ and sing the proscribed ‘Famine Song’. The majority of Police Scotland sing along with them in the police clubs and their Orange and Masonic lodges.

Make no mistake about it. The insidious influence of Freemasonry is so widespread in Police Scotland that it is effectively run by Grand Masters. They look after their own.

I have done my utmost to provide my readers with the best commentary that I can muster on the myriad of trials faced by the former Rangers and what I mischievously refer to as Rangers Lite, but judging by donations, I have failed. I have put my neck on the line and could have easily been sent down for two years for contempt of court. I have it on good authority that my blog has been discussed in Chambers. I covered the King contempt of court hearing and I was astonished at the mendacity of his written statement and James Blair’s complicity in King’s farrago of lies. I was even more astounded by Justice Peter Smith’s admission that his heartfelt wish was to have been nominated to the Freemasons by leading apprentice John Greig. Justice Smith is suspended from active bench duty. His premature retirement is imminent.

In discussing my open admission of failure I look to others, journalists whom are well recompensed for their endeavours, to pick up the slack. However with the exception of Roddy Forsyth, Graham Spiers, Kevin McKenna and Martin Hannan, the nuances of entitlement, the fiduciary responsiplilities of The Protector and archaic legal precedents from 1874 and 1927, would be lost on the likes of Jackson at The Daily Record and Jack on Clotted Weir’s team at The Herald Group. As for radio, Kenny Macintyre practically purrs at his producer’s endless conveyor belt of former Rangers players and Rangers-facing journalists. He might as well enlist the outside broadcast unit and transmit live from his local Masonic lodge. As for Radio Clyde, any medium that gives a platform to the Rangers cheerleader BFDJ is little more than a Rangers fanzine.

As I tried and ultimately failed to provide a running commentary, I was wary of emulating Keith Jackson’s comic coverage of The Australian Open from his South Side living room. The only local colour in this treacherous affront to reportage was provided by Mrs Jackson’s choice of drapes. Those who could spare the time watched the live feed as I did and were quick to opine if I missed a pin being dropped on the courtroom floor. Notwithstanding the lack of support, I abandoned my rolling coverage of the final afternoon as in the ten minutes or so required to update my rolling blog, I was missing parts of the most complex arguments. I chose to pay close attention to all proceedings and pay particular attention to concluding arguments, and then summarise in this blog.

As I watched matters unfold my most important takeaway was that Scottish Football was on trial. Or more appositely what passed for Scottish Football as David Murray subverted the game for twenty-three years.

The hollowed hulk that is Rangers Lite has been flying King’s Jolly Roger in its Govan dry dock as a consequence of Murray’s football wheeze. As Murray was wined and dined and entertained by Lionel Ritchie, whom he hired at great expense, the bill was being picked up by the £500,000 he charged Rangers for his EBT expertise. It was a poor bargain.

Having tried and failed via his cronies at The Bank of Scotland to put Celtic out of business in 1994, Murray responded to Fergus McCann’s business acumen (in extending the capacity of Celtic Park and raising finance by prudent share trading – Celtic PLC share price on the London Stock Exchange is currently 96 pence) by engaging in the illegal DOS/VSS tax evasion scheme;  and by his use of side-letters which effectively pulled the legal rug from under his introduction of EBT.

The prosaic facts of the matter, as articulated by the Rangers Tax Case blogger are:

“Rangers gained a multi-year advantage from breaking rules / lying

– lying allowed bills to grow to unpayable level.”

One hopes that the analysis of an Orwell prize-winning social media commentator will in some ways assuage those openly baying for my blood. I digress. Andrew Thornhill, QC for Rangers (in liquidation), presented the following three points for the consideration of The Supreme Court:

1. Whether the Court of Session erred in law in reversing the specialist FTT & UTT Tribunals and concluding that payments of “emoluments” or “earnings”, for the purposes of the Income and Corporation Taxes Act 1988 and the Income Tax (Earnings and Pensions) Act 2003, had been made by the appellant (Rangers) to its employees.

2. Whether, in order for a payment to constitute earnings for PAYE and NIC purposes, it is sufficient that the payment was “derived from” work done by a particular employee and/or it “it formed part of the employee’s employment package”.

3. Whether the powers which each employee held as protector of a sub trust had the effect that the funds in that sub trust were unreservedly at the disposal of the employee and were earnings for PAYE and NIC purposes.

Counsel for HMRC, Julian Ghosh argued that the funds in the sub-trust were at the unreserved disposal of the employees, in Rangers’ case players and executives, and those nominated by the players. Andrew Thornhill initially argued that unless the protectors had rights of amendment, their fiduciary powers were limited. Although no-one disputes that the initial payment to the principal trust should be subject to PAYE and NIC, Thornhill’s argument rested on the discretionary powers of the sub-trusts. If the sub-trustees are at the unreserved beck and call of the EBT loanees, then PAYE and NIC is due.

I ended my coverage with what I initially thought was an exclusive. Tommy McClean was named (and shamed) in court as being in receipt of an EBT. He joins Walter Snith and Graeme Souness on the rogues’ gallery of EBT recipients that were not on Mark Daly’s list. However others are claiming that they imparted this information in July 2013. The sniffy SFM, who openly attack this site, would go out of their way to deny me  an exclusive. However all they had was unfounded speculation. I had the truth in the highest court of the land. If one contributes to the SFM, and one tells tales out of school Jimbo (you know who you are) which threatens my security and the security of my right-hand man The Mensch, then you are no longer eligible to post comments on this site. Your guttersniping will be better received in the expensive Glasgow offices of the SFM. You can even call them directly, at your expense.

Andrew Thornhill asked the Supreme Court to reverse the Scottish Inner Court’s decision in respect of issues 1 and 2 but acceded to finding 3. This was an inordinately surprising volte-face. So much so that the Chair  of the four esteemed Lords and one Lady responded to this key concession by asking him if this meant he was accepting that PAYE was due on the Sub Trustees individual funds

Thornhill responded with a simple but highly resonant “Yes“.

So allow me to convey what this effectively means if it’s not immediately apparent to readers. Thornhill, acting for Rangers, accepts that EBT holders must pay tax and NI on the funds deposited into their trust fund by Rangers. He has thrown the players and executives to the HMRC wolves.

One might ask whether he is taking instructions from David Murray

I style this site as ‘Cynical Reflections From A Tub’  but the cynicism is this concession by BDO shows my reflections a clean pair of heels. BDO’s counsel, acting on their express instructions, has given HMRC a clear run at going after individuals by accepting that the scheme was fatally flawed, and in so doing they implicitly offer the Supreme Court a compromise where Rangers win on Issues 1 and 2 and concede on Issue 3.

However here’s the kicker for HMRC. Should BDO/Rangers appeal on issues one and two be upheld, and three be conceded, it would present HMRC with a legitimate and unchallenged one-off claim against Rangers EBT holders for employee NI and tax, and Rangers for employer’s NIC.
However HMRC would not have a mandate to pursue other trust funds


Allow me to emphasize this point. If the Supreme Court accepts the compromise, the 108 recipients of EBT, are, not to put too fine a point on it ‘totally fucked’.  If the Supreme Court do not uphold the appeal, and they would not in all probability reverse an acceptance by the appellants on issue 3, the Inner House continues to hold sway. HMRC would be unshackled to vigorously pursue the EBT recipients. It’s a classic example of:

Heads you lose, Tails you lose.

The bus that is coming down the road from the Inner House is fast approaching. If it misses, it will stop to reverse over the 108 who foolishly thought that they had had a narrow escape. The proceedings of The Supreme Court were deemed by me to be dry, but I did not anticipate the Shakespearean blood-letting at its conclusion.

Those seeking Title Stripping will undoubtedly have their mandate.

Squeaky Bum Time v A Love Supreme

As much as I would prefer to fire up my old valve amplifier and dust down my vinyl copy of the John Coltrane classic, A Love Supreme, I quickly remind myself that they are in safe storage, that I am in safe exile and that duty calls. The rolling blog for day two will resume when it kicks off at 10.00. Unless it’s a game of two halves, adult nappies may be the ordure of the day at the Ferguson and McLeish households as their bums squeak so vigorously that they could be considered to be engaging in a duet. A symphony of crickets in A minor, if you will.

Prior to taking the wraps off another edition of the latest Soap in the Rangers Lite epoch, I take pause to note that in the dark recesses of the Rangers’ Bulletin Boards, where the knuckledraggers are picked over by the worms and weird fishes, they have failed to grasp the import of the Takeover Takedown, King’s Black Spot and Bannatyne’s continuation deconstruction.

Which proves my axiom:

You can lead a Pantomime Horse to water but you cannot make it drink.

Let battle recommence…………

11.10 a.m. Mr Herbert, in Ghosh’s team,  has just finished his argument that the Inner House were in error as they failed to fully address the powers of amendment and the Category One fiduciary powers of The Protector. It’s a complex argument. Mr Ghosh has stepped up to make his submissions.

11.50 a.m. Ghosh finishes his submissions and asks the Supreme Court to affirm the findings of the Inner House that ‘he and his team are very happy with.’  He requests a few days to put his additional submission in writing, as an addendum to the submissions made to the court prior to the hearing. This confirms what I have long suspected and flagged to readers. There will be no written judgement handed down immediately after the trial. I would anticipate some time after the Easter furlough.

12.05 p.m. Mr Dunlop, who is a member of Mr Thornhill’s team, then makes reference to an EBT received by Tommy McLean whose name was never disclosed by Mark Daly of the BBC. McLean joins Souness as a beneficiary long after they have left Rangers employment. In Souness’ case it was a bung for buying from Rangers. Was the same true of McLean in 1996-1998? Did he receive an EBT bung to facilitate a transfer?

Should we consider SDM’s entire tenure, 1988 – 2011, as the cheating years and strip all titles accrued in this period?

I will conclude my rolling blog on this explosive point. The procedural tit for tat of the minutiae of sub-trusts is of little interest.

Addendum : There are those who contend that McLean was head of youth development at Rangers in 2001. If this were the case, was he paid via an EBT and will he soon be in Hector’s sights? Was everyone at Ibrox so bent for so long?

The Continuation Jihadists – Supreme Disappointment

I promised readers my analysis on the first day of the Supreme Court and I won’t disappoint. I had almost 50,000 hits yesterday, with 15,000 readers following the rolling blog. Despite typos and one material error, which I have now corrected, the strategies of Thornhill for Rangers in liquidation, and Ghosh defending the ruling of the Inner House and The Advocate General for Scotland are now clear.

Thornhill is pursuing a strategy of sullying the water apropos disguised remuneration. He is arguing that the loans should be regarded as benefits in kind and that if a player or executive ‘sacrificed‘ his entitlement by accepting a lower basic salary this was his prerogative. He argued that the tax efficiency was legitimate.

Julian Ghosh was persuasive  in his argument that the disguised remuneration was preordained by side letters or verbal agreements. What he did not argue was SDM’s written guarantee that Rangers would indemnify recipients if HMRC came calling.

Which leads seamlessly to the Lord Bannatyne ruling on the Kinloch v Coral hearing. Rangers Lite/TRFCL are a new club created from a basket of assets. This has been stated time and time again in the highest courts in Scotland, but the Continuation Jihadists stick their heads in the sand, if they can find a space beside BFDJ’s ‘baw heid’ and proclaim Rangers Then, Rangers Now, Rangers Forever.

The Jihadists and those complicit in the lie, the SMSM, claim that Charles Green bought the old club as a going concern and that the club was relegated for running up debts of £168.6m. It’s a fantasy. An ethereal metaphysical construct that continues to be laughed out of every court where it rears its preposterous Pantomime Horse’s head. However the Jihadists won’t accept it as without their 144/54 mendacity they are nothing. Here’s a newsflash for the Jihadists. The club will not be rising from the dead at Easter. Your God is dead.

Pedro Caixinha did not take long to propagate the 144/54 lie which pulled the rug from under his integrity. If he has to lie when singing for his supper he is no better than the time-share shysters in The Canary Islands. His 144/54 mantra is for the birds.

Cast your eye over Lord Bannatyne’s ruling Caixinha. How does it feel to be the manager of a new club that has never won a major honour and has yet to play in any UEFA tournament?

The Supreme Court


Court One is currently hearing  submissions from the appellant’s counsel who are soliciting judgment on whether three judges at The Court of Session erred on a point of law. We now have a distinction on timelines. The period from 2001 is being considered. The prevailing legislation at that time is being outlined. As one might expect from a learned friend who specialises in tax law, his demeanour is august and sober. As a television spectacle it is all rather flat.

The best way to deal with this matter is to provide a rolling blog which I will update at regular intervals. I will follow this dynamic blog with my analysis on day one and day two under separate cover. I anticipate the analysis being available by dawn GMT.

Let the games begin…..

10.55 a.m. Counsel for BDO are arguing that if an employee takes for example 80% of salary and defers 20% to purchase or lease a car, then this is a benefit in kind, not an emolument. It’s a clever argument which was immediately challenged by the judges’ Chair.

11.10 a.m. Counsel for Rangers in liquidation accused of ‘Tilting at Windmills.’

11.30 a.m. Heaton v Bell, the premise of BDO’s counsel, now deemed irrelevant by two of the five judges. If this is all that counsel has in his kit bag, it does not bode well for BDO.


References: [1970] AC 728
Coram: Lord Reid, Lord Diplock
Ratio: The Revenue sought to tax the benefit of a car loan scheme and the issue was whether the emoluments of a participating employee fell to be assessed under Schedule E gross without reference to the weekly sum deducted by the employer for providing, taxing and insuring the car.
Held: The gross wage was taxable. A barter transaction involving the exchange of goods or services in return for goods or services, may give rise to taxable income in some circumstances. The issue was what is the value to the taxpayer himself of this benefit?
Lord Reid observed that it would be ‘absurd to suppose that a transfer of shares which can immediately be sold to produce money should not be regarded as a perquisite’
This case cites:

Cited – Tennant v Smith (Surveyor of Taxes) HL (Bailii, [1892] UKHL 1, [1892] AC 150)
A Montrose bank manager had been given free accommodation in a bank house which he was required to occupy.
Held: The Inland Revenue could not charge income tax on the value of the accommodation because the employee could not convert the . .

Cited – Revenue and Customs v Forde and McHugh Ltd SC (WLRD, Bailii, [2014] UKSC 14, [2014] STI 739, [2014] 1 WLR 810, [2014] WLR(D) 99, Bailii Summary, UKSC 2012/0162, SC, SC Summary, [2014] Pens LR 203, [2014] 2 All ER 356, [2014] STC 724, [2014] ICR 403, [2014] BTC 8)
The Court heard a number of appeals concerned with the interpretation of the phrase in section 6(1) of the Social Security Contributions and Benefits Act 1992, ‘[w]here in any tax week earnings are paid to or for the benefit of an earner’.

11.35 a.m. Counsel for BDO/Rangers in Liquidation labouring the point of whether an employee was entitled to an EBT addendum and whether he could decline. If not entitled no tax would be due. Has he not seen the side letters?

11.45 a.m. Counsel for BDO now suggesting that salary sacrifice is a legitimate means of tax avoidance. He is clearly attempting to defend the indefensible.

11. 55 a.m. We now have the appeallant’s strategy. He is making the case that the EBT should have been taxed as benefits in kind, not as earnings, or as deemed in the Court of Session, disguised remuneration. Counsel is arguing that the EBT were an optional remuneration arrangement.

However this is only relevant for individuals like SDM who did not have a side letter. The side letter is the smoking gun of disguised remuneration.

12.15 p.m. To use the vernacular counsel for BDO is being ripped a new one as one of the Supreme Court Judges uses the same document/argument as presented by BDO’s counsel and turns it on its head. Counsel looks flustered. He is far from convincing.

12.30 p.m.  Lord Hodge, who readers will recall put Rangers into liquidation on October 31, 2012, is by far the most impressive of the Supreme Court Judges. He is giving counsel for BDO short shrift and seems to have a forensic eye and a sound grasp of case precedents and the argument. His performance and rebuttals of BDO’s case have been the highlights of the first morning. Did BDO envisage going head to head with someone of Lord Hodge’s calibre? Lord Hodge is joined by Lords Neuberger, Carnwatch and Reed, and Lady Hale. I have yet to identify BDO’s counsel but he seems to be something of an authority on tax law.

1.00 p.m. I have now identified BDO’s counsel than none other than Andrew Thornhill QC of Pump Tax Chambers. Regular readers will recall that he advised Rangers to pay their £2.8m liabilities from the illegal DOS/VSS scheme (wee tax case). Although well acquainted with the subject matter he is a controversial choice as he was accused of receiving a £500,000 bribe.

Julian Ghost QC is an impressive character. He was a refreshing pre-prandial alternative to the mealy-mouthed Thornhill, who at one time actually lost the place. He cogently argued that the loans were payments for work done and formed part of the bargain between employee and employer. This bargain was arranged by prior discussion. As far as he’s concerned it’s a simple case. There was no double payment. Players and executives were paid once in a single package. This earnings package was subject to PAYE and NI tax. Paying a part of this package as a loan to a principal trust, and then a sub-trust, was neither here nor there. The loan was part of the package of earnings, whether it was paid to the entitled individual’s Aunt Agatha or not. I am much more persuaded by the Ghosh than Mr Thornhill. Court adjourns for lunch.

2.40 p.m. I have been loath to break off from the Ghosh’s testimony in case I miss anything. His argument that the loans were diverted earnings was compelling. He took on the assertions by Thornhill that Australia and New Zealand would be more sympathetic to BDO by pointing the judges to other parts of judgements which favoured HMRC’s interpretations. His three ticks argumennt – payment for services, payment to the individual who provided service and in the relevant tax year, struck a chord with the esteemed lords and lady. Ghosh comes across as an honest broker.

2.55 p.m. Ghosh hits home the point that the loan had already been paid to the principal trustee in accordance with the side letters (see jj passim Montreal Trust by Campbell Ogilvie in archive) and that the side letters are overwhelming evidence of the remuneration bargain. In regard to the executives the instructions were of a verbal nature but the bargain was the same. This was proven in the FTT. When Mr McLelland was asked what would he do in the event that he did not receive a loan his reply, that he would leave, was instructive. The EBT was unequivocally a part of the remuneration bargain.

3.20 p.m. Some of the case law precedents date from 1854 and 1927, which I find somewhat surprising given that EBT are at the cutting edge of tax avoidance/evasion. Nevertheless Ghosh is more than capable of reinforcing his argument that the loans were disguised remuneration for services rendered and that the loans paid to the sub-trust were at the unreserved disposal of the player or executive. He uses the expression ‘causal link’ repeatedly. Ghosh, unlike Thornhill, is great television. He is the star of this docudrama.

3.30 p.m. Ghosh for HMRC/The Advocate General of Scotland concludes his submission with his argument that if the principal trustee paid the player directly then it would be taxable. If therefore follows, he contends, that if the sub-trust payment is at the unreserved disposal of the player/executive, it is disguised remuneration which is taxable. This common sense view, which accords to the decision by the inner house, is persuasive.


The Black Spot

Should David Cunningham King not make good on the directions of the Takeover Panel Executive to issue a share prospectus for the purchase of all shares not held by his concert party, by close of business on 12 April 2017, he will be in breach of the Executive’s codes and subject to disciplinary proceedings. There is no wriggle room here. King has lied and obfuscated all the way to a Takeover Panel Appeal Board, which is an independent body. In upholding the Takeover Panel Executive’s decision that King acted in concert with Messrs Letham, Park & Taylor, the TPE are duly authorised to direct King and institute disciplinary proceedings should he not comply with their directions. If a prospectus is not published offering 20p per share to the 65.95% stake that is not held by the concert party i.e. 56,627,350 shares, and if fully subscribed pay £11,325,470 to procure them, King will be subject to disciplinary proceedings.

If one includes the cost of producing a prospectus, including professional fees, of circa £2.27m, and includes the £500,000 costs of the TPE, King will have to deposit just north of £14m in an escrow account to the satisfaction of a nominated adviser.

King does not have £14m. Even if he had access to this amount in South Africa he would be prohibited  from taking it out of the country. Club 1872 do not have £14m at their disposal. The compromised and formally besmirched Three Bears could loan King £14m, but are most unlikely to do so as King is a shyster career criminal. If one sets aside the unanimous findings of Appeal Court Judges at South Gauteng High Court, who deemed that King was ‘a glib and shameless liar‘ one can look to a more local perspective on King’s integrity or lack thereof, by soliciting the opinion of the CEO of a respected hedge fund, Colin Kingsnorth of Laxey Partners:

Kingsnorth told us (Letham, Park & Taylor) how he disliked Dave King intensely and he had Dave King in the same office we were in and at first they kicked him out after 30 minutes… He said he didn’t trust Dave King and wouldn’t do business with him”.

King is a pariah now, so why should the ultimate sanction of the Takeover Panel Executive concern him? He is based in South Africa, far removed from the opprobium of the City of London.

It is my firmly-held conviction, and I have been proven to be on the money in regard to King time and time again, that King will be subject to disciplinary proceedings and receive a formal Cold Shoulder from the Executive for breaches of code 9 in their statutes. The Cold Shoulder is the financial equivalent of Robert Louis Stevenson’s ‘Black Spot‘ but has inordinately more severe implications than this literary device.

In essence, The Cold Shoulder prohibits any bank, hedge fund, or financial institution  under the auspices of the FCA to have any dealings with David Cunningham King. It would not be in the best interests of Metro Bank, The Rangers’ current bank, to continue its relationship with any company where King is a director. The Cold Shoulder is absolute. It’s scope is far-reaching. It is such a severe restriction that it has only been issued on three occasion. King would be the fourth in a small rogue’s gallery.

Tricky Dicky Wilson, the Hun’s Hun at the BBC, who at one time moonlighted from his role as a journalist at The Herald to punt shares for Charles Green, is no stranger to a prospectus. Wilson opines that King can ignore the Takeover Panel Executive  as he resides in South Africa, outwith their jurisdiction.

However, to put it politely, he is talking out of a hole in his alimentary canal reserved for horse shit. If King remains the Chairman of RIFC and is given the Cold Shoulder, The Rangers Football Club Limited will also effectively be given the Cold Shoulder.

TRFCL will be pariahs in the city. Should Pedro Caixinha attempt to buy a player, he won’t be given terms to pay as all clubs’ bankers will shun his club. I would go further to contend that they would not buy players from, or sell players to, Rangers. All financial transactions, including loans of players, would end.

As I stated in my latest article, the Takeover Takedown has delivered a knockout blow to King. If he drags himself up from the canvas and touches  gloves for Rangers, their TKO is imminent.