Rangers oldco liquidators seek to appeal EBT tax case
Joint BDO liquidators apply to Court of Session's Inner House to appeal decision at Supreme Court
LIQUIDATORS of the Rangers FC oldco have sought leave to appeal the Court of Session’s decision to strike out the club’s use of an Employee Benefit Trust arrangement at the highest court in the land.
BDO joint liquidators have made an application to the Court of Session to be granted leave to make a final appeal to the Supreme Court.
Last month, the court held that the corporate entity that formerly housed Rangers, now in liquidation (oldco), had run a contrived EBT structure between 2001 and 2010 to pay £47.7m to players and staff in tax-free loans.
Unless the Supreme Court sees fit to overturn the ruling, EBTs face a bleak future with HM Revenue & Customs likely to pursue them with accelerated payment notices and follower notices. These notices can be issued to taxpayers using schemes that are in dispute, or where a precedent has been set that would make it highly likely that they would lose at tribunal.
HMRC ran an EBT settlement scheme which closed on 31 July this year. Under the regime, businesses that used EBTs had to register their intention to settle with HMRC by 31 March 2015, in order to benefit from more favourable terms, and pay up by the end of July. There were no penalties, but now the opportunity has lapsed EBT users could face fines of 50% or more of the tax due.
But it is believed that many advisers told their clients to wait and see how the Rangers case turned out, rather than take advantage of the settlement opportunity. Today, those clients are now facing substantial bills, many times larger than those they would have paid had they used the settlement regime.
According to the Courts Reform (Scotland) Act 2014, from 22 September 2015 any party wishing to overturn decisions of the Inner House of the Court of Session – Scotland’s upper appeal court – must ask the court for permission before seeking to bring a further appeal to the UK Supreme Court.
However, if the inner house refuses permission, the joint liquidators could then ask the Supreme Court directly for permission to appeal. The permission will normally only be given if the appeal is held to be of “general public importance”.
A spokesman for the liquidators said: “Following discussions with the company’s legal advisers and the liquidation committee, the joint liquidators have filed an application seeking leave to appeal the Inner House of the Court of Session decision in respect of the EBT case.
“If the company successfully obtains leave to appeal, the appeal will be heard in the Supreme Court in London. The joint liquidators are not in a position at this stage to make any further comment in respect of the appeal.”
