The First Tier Tax Tibunal (FTT) has found that sums paid to beneficiaries of Rangers' £47 million Employee Benefit Trust (EBT) scheme were loans and not employment earnings.
Rangers executives, football players and staff were all "paid" via the clubs EBT for nearly ten years. The FTT decision was not unanimous, one of the three members dissented and HMRC may appeal.
Whilst HMRC may have opportunites for follow up action in respect of any unpaid tax, penalties and interest on unreported employment related loans there is now another twist in the tale of Rangers "Big Tax Case" as it has become known by supporters. If the payments made out of the EBT are loans then Rangers liquidators will be able to take action to recover the sums from individuals or their estates. The club went down in the summer with debts of a similar size to the amount paid out of the EBT after HMRC rejected a company voluntary arrangement (CVA).
In a further twist Murray International Holdings which had been a major shareholders in Rangers is threatening action against someone (presumably the Tribunals Service) and asking how sensitive details about the EBT case have been released into the public domain.
A further twist is anticipated: this is expected to be that the EBT loans are loans, but as they are not repayable on demand the liquidator cannot have them.
The FTT ruling will be a blow for both HMRC and taxpayers, Rangers have always topped the table in football's tax debts.