Taxman could still force ex-Rangers player to pay back millions

UK Chancellor George Osborne could target former Rangers players and staff, who have benefited from “disguised remuneration schemes” such as the now infamous Employee Benefit Trusts (EBTs), to pay millions in unpaid taxes.

The schemes were used by the now defunct club to make payments to players, managers and other staff between 2001 until 2010.

But it has emerged that former chairman David Murray, former captain Barry Ferguson and former player-manager Graeme Souness could be among those forced to pay back millions as a result of new regulations announced in the recent Budget regarding the tax-free “loans”, which come into force in three years.

The Government’s new legislation is intended “to put beyond doubt” that all loans or debts from such schemes will be taxed as earnings if they haven’t already been fully taxed or repaid on or before April 5, 2019.

BDO, the liquidators of the former original Rangers Football Club are currently taking the long-running “Big Tax Case” to the Supreme Court to contest a Court of Session decision in November which found that the Rangers oldco is liable for £46.2 million in unpaid tax from 2001 until 2010 as a result of the use of EBT loans which, the Treasury said were, in fact, a cover for the payment of salaries.

The new rules mean that even if BDO win the Big Tax Case, the taxman could still target individual players and staff for tax on the EBT loans.

Treasury figures suggest that across the whole of the UK, about 30,000 people and firms have become involved in so-called contrived remuneration schemes since they were ruled as tax avoidance in 2011.

An HMRC document produced in conjunction with the Budget says a consultation document is due to be published in the summer inviting views.