SPFL say Rangers won’t be stripped of titles because use of EBTS broke no existing rules

● Governing body publishes legal advice which said £250k fine can be only sanction

The SPFL yesterday took the unprecedented step of publishing the opinion of QC Gerry Moynihan on why they can not strip Rangers of 14 titles in a period when they improperly registered players and used EBTS to avoid tax.

According to the SPFL, the Scottish Premier League’s rules at the time did not cover such actions and, consequently Rangers can not be tried with the benefit of hindsight.

So the £250,000 fine imposed by Lord Nimmo Smith’s commission in 2013 (at a time before their use of EBTS was definitively ruled to be unlawful by the highest court in the land) will remain as the only punishment.

As first revealed by outgoing SPFL chairman Ralph Topping in an interview with The Scotsman 12 days ago, the league body has relied on recent legal advice to resist any calls for the stripping of titles.

Many supporters have complained about what they perceive as the unwillingness of the game’s ruling bodies to introduce further sanctions, but the SPFL has promised that titlestripping would be on the agenda for future miscreants.

The SPFL’S chief executive, Neil Doncaster, pictured, initially denied that the SPL had been negligent in drawing up its constitution. “Arguably, the non-payment of millions of pounds of taxes could be construed as bringing the game into disrepute and that is an area reserved for the Scottish FA,” he said.

“It’s not an area which the SPL as was – or the SPFL as is now – is allowed to get into. If you look at the period from 1999 and the next decade or so, neither Uefa nor other leagues across Europe had rules to cover this sort of thing. Rules concerning financial fair play and non-payment of tax are fairly recent across European football.” Topping added: “There wasn’t one single person who envisaged this case happening. You tell me who pointed out that this was going to happen – did you?

“Did anyone in football see this coming? The biggest assumption about the set-up in the SPL would be that you would have Rangers and Celtic playing in it in perpetuity – nobody thought that those two bastions of football would ever be involved in anything like this and nobody flagged it up, hypothetically or otherwise.

“Whether that was negligent is a legitimate area for the commission to look at.”

Lord Nimmo Smith’s commission concluded that Rangers had not gained any competitive advantage by failing to disclose the EBT payments – which they were required to do – when registering their players. However, when it was put to Rod Mckenzie, the SPFL’S lawyer, that they had been deliberately withheld due to the sensitive nature of the schemes – ie, to reward players with tax-free payments they could not otherwise afford – Mckenzie demurred.

“There are a number of things which are incorrect in that proposition,” he claimed. “Firstly, the payments were not made to players. They were made into a trust and then the sub-trust lent the money to the families of the players, which is part of the problem.

“The Supreme Court has ruled that, while there was no payment to those players, they should be treated as remuneration to players. Nobody in football understood that one of its clubs was going to use a tax scheme like this for players.

“It’s sometimes suggested that, somehow, the SPL or the SFA got notice of this: they didn’t. There is certainly reference in Rangers’ accounts to them using EBTS but nothing was said to indicate they were being used for players.

“The reason Rangers didn’t lodge the documentation with the SPL was that they didn’t believe they had to because they weren’t making those payments to the players and, therefore, they didn’t believe they were under obligation under the rules to lodge those documents. It had nothing to do with disclosure to HMRC because the SPL and the SFA were not in the business of disclosing documents to HMRC.

“The reason Rangers did not give that documentation to the SFA and the SPL was not to hide it from the tax authorities.”

Rangers, in fact, denied the existence of those letters to HMRC and it required a police raid on Ibrox to uncover them. Those letters revealed that trust payments were performance-related, with specific amounts being paid after certain targets had been reached

“Most of them did,” Mckenzie said. “All I can say is that the side letters did not relate to payments to the players – they related to payments to the trusts. Rangers – incorrectly, in Lord Nimmo Smith’s decision – took the view that they did not need to file them with the SPL because they weren’t about payments to players.”

By EWING GRAHAME

The SPFL yesterday insisted it had no legal power to further punish Rangers for their use of EBTS to pay players from 1999-2010.

The league, however, did support an independent review into the way Scottish football’s authorities have dealt with non-payment of tax by clubs

In 2013, Lord Nimmo Smith’s Spl-commissioned panel found Rangers had been guilty of improperly registering players and fined the club, which was then in liquidation, £250,000.

Charles Green agreed to pay that sum under the terms of the so-called “Five-way Agreement”, which allowed him to buy the business and assets of the liquidated club. Consequently, the “newco” Rangers were admitted to the fourth tier of the SFL as an associate member.

BDO, Rangers’ liquidators, won two tax tribunals after claiming that the club’s use of EBTS was legal but the Court of Session overturned those verdicts and, earlier this month, the Supreme Court upheld that decision. However, Rangers will not have any of the 14 trophies they won during the period in question declared void, because the SPL’S rules at the time did not cover such an offence nor provide for such a course of action.