Celtic and Rangers heroes among football stars facing financial ruin

[ian1964 10,724]

Celtic and Rangers heroes among football stars facing financial ruin as HMRC send cash demands over tax avoidance schemes

 

06:00, 15 Apr 2016

Updated 06:52, 15 Apr 2016

By John Ferguson , Keith Jackson

 

SOME of Scottish football's biggest names are facing the threat of disaster as George Osborne's tough new rules has seen a clampdown on tax avoidance schemes used by the wealthy.

 

SCOTS football stars are facing a fresh threat of financial ruin from the taxman.

 

Cash demands totalling millions have been issued over tax avoidance schemes in a new blow following the Employee Benefit Trusts row surrounding Rangers.

 

The targets of the crippling new demands include some of the biggest names in Scottish football.

 

Recent legislation put in place by Chancellor George Osborne allowed the authorities to re-examine the legality of more than 1000 tax avoidance schemes used by the rich and famous.

 

Many of the schemes had been officially approved by HM Revenue and Customs but a retrospective change in the law means those who used them are now personally liable.

 

And this has led to hundreds of accelerated payment notices being served on former and current

professional footballers.

 

The bombshell demands have been dropped on at least three Scotland captains as well as a host of their international teammates.

 

Former big earners from across the Old Firm divide have been targeted, as well as at least one player who is likely to feature in Sunday’s Scottish Cup semi-final between the Glasgow rivals.

 

And a string of current SPFL stars from clubs across the country have been left urgently seeking legal and financial advice after being placed on taxman Hector’s hitlist.

 

The controversial APNs demand full repayment of all disputed amounts. And only once that money has been deposited can the sums involved be subject to appeal.

 

It is understood that hundreds of professional players on both sides of the Border are discussing joining forces to mount a joint legal challenge against the APN demands.

 

One current Scotland player said: “There is a feeling that we are being hung out to dry.

 

“Some of the boys are being hit with demands for sums of seven, eight or nine times what they invested into these schemes.

 

“Letters are coming through effectively saying, ‘You paid £1million into such and such a scheme a couple of years ago. We want £9million into our account right now. Pay up or we’re sending round the debt collectors to start seizing your assets. We’ll argue about the details later.’

 

“It’s terrifying and a lot of football players from the past and present are in a real state. No one wants to be declared bankrupt but some of the guys might have no other choice.”

 

A number of the schemes at the centre of the probe relate to investments made in the film industry. Down south, legendary Manchester United boss Sir Alex Ferguson, ex-Old Trafford defender Rio Ferdinand and former England manager Sven Goran Eriksson are among those facing potential bills for tens of millions of pounds.

 

On Wednesday, the Supreme Court ruled that HMRC are entitled to go after investors in one such film scheme, in a case worth a total of £1billion.

 

In 2012, Dave Hartnett, then the head of HMRC, described film schemes as “scams for scumbags”. But one former Scotland international who invested in such a scheme told the Record: “These schemes were approved by the authorities at the time. They were perfectly legal.

 

“But now the rules have been changed and the taxman has effectively gone to war with footballers and celebrities.

 

“They see us as easy targets. These letters are dropping through everyone’s box and they are frightening the life out of some of the boys.

 

“I spoke with one player the other day who got a demand for £80,000. He has until next week to come up with the cash. The guy is in a desperate state. He doesn’t have the money and knows the next step is likely to see him losing his house.

 

“But that’s just a minor example of what’s going on. The guy I’m talking about played at a decent level without ever being a huge earner.

 

“There are plenty of other more high- profile players facing demands for much more than £80,000. I know of one former player who has been hit for £750,000 and who is in complete panic.

 

“There’s no room for negotiation or compromise. It’s all heavy-handed, aggressive tactics from HMRC.”

 

HMRC believe many of the film investment schemes were designed specifically for tax evasion.

 

But another source – one of the most influential men in Scottish football –told the Record: “Some of the guys involved put money into a scheme that helped fund the movie Avatar so we’re talking about bona fide investments.

 

“They were told the tax incentives were perfectly legal. Some of them have letters from HMRC to prove it.

 

“But now the Government have completely moved the goalposts. I’ve spoken with a number of players who are at their wits’ end with worry.”

 

Tax expert Andrew Watters, of accountancy firm Thomas Egger, said: “These guys are probably going to have to cough up this money and, in some cases, that could mean selling houses and things like that.

 

“The big change we have seen in the last couple of years is the introduction of these accelerated payment notices.

 

“At the time a lot of footballers got involved in these film schemes, HMRC didn’t have the power to demand the tax they believe is owed up front.

 

“That meant you could tie the case up in court potentially for several years before anything would have to be handed over.

 

“Now taxpayers can be compelled to deposit the money before fighting their case, with the possibility that it will be returned years down the line if they are successful in court.

 

“If you have a sportsman who was making a lot of money when times were good, but made a couple of bad investments, then they are going to have to find that money.

 

“There is no doubt that this is placing a lot of people who got involved in these film schemes in a lot of bother.

 

“You can make a representation to HMRC to have an APN withdrawn, but if your argument is just that you don’t think you owe the money then HMRC won’t pay much attention to that.”

Gers icons face ruin in budget tax grab

 

THE Record revealed last month that a host of former Rangers stars could be hit with huge tax bills over Employee Benefit Trusts.

 

Ibrox icons including Barry Ferguson, Sir David Murray, Graeme Souness, Alex McLeish and Kris Boyd could be forced to pay back millions after George Osborne targeted tax dodgers in the Budget.

 

The Chancellor is cracking down on beneficiaries of “disguised remuneration schemes” – of which the EBTs introduced by Murray were a prime example.

 

More than 80 players, officials and staff at Rangers raked in more than

£47million from the scheme between 2001 and 2010.

 

Many of the foreign players have since returned to their home countries, which would create difficulties for HMRC in clawing back the cash.

 

Schemes like EBTs were outlawed with the 2011 Finance Act but billions of pounds in unpaid tax remain outstanding.

 

Murray Group, who owned Rangers, argued they were not liable for income tax and National Insurance because the players could have paid the loans back. But the tax authorities say the loans were never going to be repaid and the scheme was a brazen tax dodge.

 

Osborne’s new legislation means that, even if ongoing court action by the taxman fails to prove the EBTs were paid as a top-up to wages, Rangers oldco and the players can expect massive tax demands to pop through their letterboxes when the crackdown comes into force in just three years.

 

Read more at http://www.dailyrecord.co.uk/news/sc...IxOH77G2FHL.99

[der Berliner 3,747]

Dunno, but as far as I am aware, sideletters or not, the EBTs were loans. If anyone of those who had such an EBT thing running, pays it back now (I doubt there was any date given), even at 5 pounds a months, the loan nature would jump in and make all claims HMRC has null and void ... (not that I have any clue about it, TBH).

[der Berliner 3,747]

Sidenote, the EBTs were used for tax avoidance, whereas the film stuff was essentially used for tax evasion. But the media sees it as fair to mix themtwo up with one-another and thus deflecting quite a bit of malevolence from the Scum chaps' film schemes in our direction.

[Uilleam 5,948]

If Murray International wins its case at the Supreme Court, then, surely, Messrs HMRC have no basis for demanding tax from the EBT recipients.

Equally, Advanced Payment Notices, surely may be resisted, given the imminence of the SC decision.

[der Berliner 3,747]

Oh dear ...

 

 

BTW, that line in the middle should read evasion, unless I am mistaken.

Edited April 15, 2016 by der Berliner

[colinstein 294]

Notice they named some of the Rangers players and staff but none of the Celtic players involved in those film schemes

[calscot 0]

I don't get how the story is related to the headline...

[Oleg_Mcnoleg 50]

It's a hell of a coincidence quite how many ex-Celtic players and directors were involved in the film scheme. It's almost as if it was a concerted effort by the club to pay players they might not have otherwise been able to afford and so could be construed as financial doping.

Reckon anyone will investigate that though?

[calscot 0]

TO be fair, I think the difference is that the club itself wasn't involved, I think it was players independently investing their money and claiming the personal tax relief.

[boabie 230]

If Murray International wins its case at the Supreme Court, then, surely, Messrs HMRC have no basis for demanding tax from the EBT recipients.

Equally, Advanced Payment Notices, surely may be resisted, given the imminence of the SC decision.

 

At the last budget new rules which will apply retrospectively were brought in. This legislation targets the people who gained from the schemes personally rather than the companies who ran the scheme.