Wed, Jul

EBT tax schemes: Lawful or unlawful?

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Various journalists and media platforms have been falling over themselves this week to declare the EBTs as “unlawful” but failing to justify this in any shape or form.

The BBC's Tom English, for example, has spoken to “multiple experts” and is happy with the use of “unlawfully”. Indeed, in a lengthy exchange with Jolyon Maugham QC, English seemed to prefer the opinion of Heidi Poon (the minority dissenter in the First Tier Tribunal which HMRC lost back in 2012). Meanwhile, Michael Grant in The Times yesterday repeated the claim, and I am led to believe that other discredited journalists have done likewise. English was at pains to highlight The Times' similar position but also failed to disclose who the BBC's experts were or why the schemes were “unlawful”. Clearly the default BBC Scotland position of maximum negative when it comes to Rangers is being utilised here - no surprise to any Scottish football news subscriber.

For clarity, Moynihan Q.C. stated in Wednesday’s SPFL statement:

"The mere fact that the scheme is ultimately held to have been ineffective does not mean that when the scheme was being applied the club and Oldco acted with less than the utmost good faith."

Maugham Q.C. in response to Tom English’s tweet claiming “The way Rangers used EBT scheme was unlawful” also said:

“As a matter of tax law, that's cobblers.”

Maugham, 20 years an expert on such matters, also contributed this succinct blog which is well worth reading by clicking here.

Lastly, let’s look at what the final Supreme Court judgement written by Lord Hodge (with whom Lord Neuberger, Lady Hale, Lord Reed and Lord Carnwath agree) concluded on the subject:

“In this appeal, there is no suggestion that any part of the transaction, which comprised the tax avoidance scheme, was a sham. The elements of the transaction, which I discuss below, were all genuine and had legal effect, as the majority of the FTT held.”

Thus, if the Supreme Court itself says that the EBTs were legal, then it should once and for all prove that the EBTs were not “unlawful” - no matter the spurious dictionary references journalists may provide.

So to Tom English, Michael Grant et al, my experts are Lord Hodge, Lord Neuberger, Lady Hale, Lord Reed, Lord Carnwath, Moynihan Q.C. and Maugham Q.C. The floor is open for you to name yours!

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