The Firesale To End All Firesales

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UserName1882 said:
Of course it does, if people want to talk about it and get digs in about Rangers then it would work a bit better if they got the facts right. Going around saying Rangers done something illegal is nothing but a lie. The only thing worse than ****s talking pish and telling lies is when people try to talk about something they don't have a clue about
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Okay, Rangers did something immoral and now you're facing a £49m bill from HMRC.
 
The problems for Rangers started with the fact that footballers and their agents would never be so daft as to trust a ‘nod and a wink’ from a football club executive. Amounts for salaries, bonuses, appearance fees- are all the subject of written contracts. These contracts (which are routinely available during tax investigations) provide the Rosetta Stone for tax investigators. I cannot discuss some of the other evidence against Rangers FC, but I understand that at least some of Rangers FC executives were aware that what they were doing was illegal. These executives appear to have been overly diligent in their record keeping!



Not saying what Rangers did was "Illegal" as I am no Tax expert, this guy is and he thinks it was "illegal".
 
Did you all miss this bit in the quoted article?

Arsenal set up a series of front companies and offshore trusts to reward its stars and save millions in tax every year. On average, players were left paying about half the 40% tax rate for high earners.
The scheme, revealed in The Sunday Times last year, is now considered illegal by HMRC, which is demanding at least £11m back tax.

Payments of more than £4m to agents have also been ruled not to be an “acceptable business expense”. Arsenal must pay an extra £700,000 Vat on these.
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From a tax advice website

In being an employee of the offshore company you are eligible to participate in an Employee Benefit Trust (EBT) scheme, which makes payments to company employees. This is quite legitimate and is seen as a way of rewarding key staff. EBT payments are based on the profit the company has generated from employing you, which is effectively the difference between the amount invoiced for your services whilst contracting and the cost of employing you (your basic salary - £6000). For legal reasons, to remain free from taxation these payments from the Employee EBT cannot be guaranteed. This is where the financial risk with EBT schemes is.

Is it legal?

This is where the really tricky bit comes in for IT contractors - will the tax man be on your back if you work through an EBT scheme?

The EBT route has been in use for many years during which there have been several changes in legislation attempting to block this option, but many of the offshore companies that offer an EBT scheme have modified their procedures to remain within the law. It is still essential to review the legal opinion of any company offering an EBT pay scheme for contractors. The only saying... if it looks too good to be true, it probably is... applies here as well as anywhere else.

If you are being paid through an EBT scheme you will have to enter a tax avoidance reference number on your self assessment tax return, which will be supplied to you by the EBT scheme provider. This immediately puts you in the Inland Revenue's sights and you may well receive a letter from them each January stating that they intend to enquire into you tax return.

If the Inland Revenue deem a tax avoidance scheme to be illegal at some stage in the future, there is a risk that you will be hit with a bill for back-dated tax going back several years, so be warned!



Article Source: http://EzineArticles.com/5807157
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EBTs weren't illegal.

Misdeclarations via them or non disclosure of scheme to HMRC is illegal.

They were also made illegal to offer to newcomers two budgets ago.
 
"For an EBT to stay on the right side of the avoidance/evasion line, these payments cannot be made on a contractual basis, as that would make them wages and therefore subject to the usual deductions. So they should, on occasion, be postponed and even refused by the trustee, who is, in theory, acting independently of the employer anyway.
HMRC says Rangers' EBT did not work like this and was, for all intents and purposes, a tax scam. It also says it has proof of this in the form of documents and emails between Ibrox's top brass and players' agents. So, last year, an angry taxman hit Rangers with a bill for £35m in unpaid tax and interest and £14m in penalties."

BAXENDALE WALKER LLP (the people who sold the scheme to Rangers)
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It looks like someone at Rangers did not listen or read the advice given them by Baxendale Walker on how to run a EBT as a Tax evasion scam.
 
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