[urlhttp://www.bbc.co.uk/news/uk-scotland-glasgow-west-17015966[/url

Yet another piece of 'thank god Pearson bought HullFC' news.

Rangers are to enter administration, largely due to the threat of a massive £49million EBT (employee benefit trust) tax bill.

The Inland Revenue are chasing Rangers all the way back to 2001, I dread to think what would have happened to Hull had Pearson not negotiated a plan to pay our tax bill off...and it makes you wonder how many other sports clubs have the dreaded letter from the tax man to come.

It is likely the final decision of the tribunal, should it go against Glasgow Rangers, will be in execsss of £80m apparenty. And just think, this is a fairly small club when compared to those in the Premiership who are yet to come to agreements about EBT, I wouldn't be sleeiping easily for a bit if I were a L**ds/Warrington fan.

Quick question about this, does a player pay his own tax on his earning eg £100000 per annum @ say 50%, or do they get the full amount and the clubs pay their tax for them?
Just a general enquiry, as we where having a debate about it in the pub last week.

Depends how badly or well they are advised.

On the Rangers thing, we will see what happens, with Paul Gascoigne Promotions Ltd possibly getting a mention

Most non-British players, even those who have a poor grasp of the English language, know at least one word, "netto".

Nothing to do with a now-defunct budget supermarket chain, but all about their wage demands. When they and their agents discuss money, it is always "netto" - i.e. net of income tax & NI. They expect the clubs to sort that out.

Certainly wasn't the case with Andrei Arshavin, who thought he was going to earn £80,000pw should find in his first pay packet after tax it was closer to £45,000pw.

Has he carried out his threat and left the UK for Spain?

Thought not, EBT or a Ltd co is the answer......

I'm not an Accountant and have never had any wish to be, however all this seems wrong.

I presume all these clubs are either being clever or are using future tax liabilities as short term cash flow, probably to help compete in the current campaign in the hope it brings richer rewards in the future e.g. Champions League, Premiership, Super League

However, it seems wrong that year after year, clubs debts spiral out of control and then play the Adminsitration card to limit its debts. Surely tax should be paid by clubs on a PAYE basis or alternatively put aside for future payment. The TV money in Football and too a lesser extent Rugby League, makes non payment inexcusable.

Fans all have to pay tax and most will be taxed at source, so no one can be sympathetic to the clubs owing tax and it is wrong that they then aim to arrange payment via Adminsitraion to xp in the £ e.g I think Leeds originally offered £0.02 in the pound to its creditors. That's people's livelihoods being affected at the expense of high wages or people buying clubs by immediately mortgaging them with the clubs money.

Some correction needs to be put into place here. Yes I agree that Adam Pearson's intervention may have been timely for Hull, but we should never have been in a position were we suddenly owed the Taxman money we no longer had.

I think the HMRC is trying to make an example of someone. Rangers may ultimately escape this one via Adminstration. However, they close someone down eventually and it's about time clubs in all sports got there houses in order.

Hopefully Hull have now done this!?

If the club makes deductions from salaries and dont pay it over to HMRC, there would be serious fall out, (we could be talking big house if it gets fully followed through) and this could be undetected, providing the employer is paying "something" to the crown

Don't know all of the ins and outs of either case but EBT's are often used as part of complex tax avoidance schemes. I suspect that in most of these cases the employer has utilised an EBT based scheme and effictively paid the salaries without deducting tax. The Revenue have been looking in to these arrangements and have presumably concluded that in these cases they do not work from a tax point of view. The clubs can challange this in court but have presumably decided that either they can't afford to or they are likely to lose if they do.
Effectively then this isn't about the clubs not paying over money they have deducted its about not deducting the money in the first place.

My post was mostly aimed in response to Rugby Raider who suggested money was held by a club which should be tax and used for example int he transfer market.

I agree with you, the EBT or offshore payments is an old thing, like the Ltd company thing too, check Gazzas - inc 1988.

At some point HMRC was going to go after the cash in football, quite rightly so.

Care to elaborate on the facts you are clearly privy to?

Thanks frepneyboy, bit of a financial minefield.

Obvioulsy businesses exploit as many loopholes as they can, it just seems wrong that is they end up being liable for tax that they escape via Adminsitration, only to wipe the slate clean and start again with the same regime, as would appear the case with Rangers intentions.

It is wrong, the crown has since been removed as a preferential creditor and very often with these "failed" companies that ressurect themselves the crown is the major looser.

I dont know who owns Ibrox, and sadly its not in prime London real estate but I have a feeling the owner who put them in admin will have a pre pack lined up ready to go and Ibrox will be bought for a song

I see Salford are confident of paying their 5 figure bill!?!?!?

Probably not an EBT, more likely a VAT or PAYE or a NIC bill/determination

Apparently Rangers debt problems started to snowball after they appointed Dick Advocaat.

Edit - courtesy of Ian Stone on Twitter @iandstone

Badum-tish.

Love a Snerberl.

You could at least have the decency to credit the originator on twitter

True. Will edit...

article on yahoo saying a few premier league clubs headed the same way as rangers due to EBT bill, hope sl clubs aren't in too deep.




except maybe Rovers.

Heard on the radio today,what has four legs and more money than Rangers?
Answer,Harry Redknapp`s dog.

a financial 'expert' on 5 live this morning seemed to hint that clubs with high profile foreign stars could be facing higher tax bills than others, and that these debts could go back a fair way in time. hmrc like a lot of other bodies is facing a bit of a squeeze at the moment, and they are now going after sports clubs big time.

by the way for whoever asked rangers own their ground, and also a trainig complex in a sought after part of glasgow (yes there is such a thing) - they are listed as the clubs main assets, above the players

Interesting point, bet the crown wont see owt to do with the land then, it'll be ferrited away.

And the administrators, they have just found a big fat machine that prints lots of crisp new bits of paper that lets them buy expensive cars and watches and invest in property abroad

well at the moment all the assets are in the hands of the administrators, they could sell the stadium and training ground if they wanted. however part of ibrox is listed, so selling it would be tricky, and the training ground has planning and devt restrictions on it - they can't have residential useage on it, so that scupper them quite a bit. i read a bit about mr whyte the owner this week, lots of question marks about his takeover and financial strategy so rangers story will be a bit different to that of other clubs - the hmrc issue is merely muddying the waters in rangers case - thier problems lie deeper