Football season may have just started back but HMRC have already netted a victory against a major club in a long running match. In July the Supreme Court released their decision in the Rangers case and agreed with HMRC that there had been a payment of earnings to both the footballers and executives of the football club. You can read our summary of the Ranger’s case in the August issue of tax.point.

Following the Supreme Court decision the club should have deducted income tax and national insurance contributions from the sums they paid away to an Employee Benefit Trust (EBT).

According to HMRC, the decision makes it clear that where a sum is established as being your employment earnings, you cannot avoid tax on them by diverting or paying them to someone else. The Supreme Court’s decision would therefore appear to be very relevant to a wide range of earnings-related tax avoidance schemes including EBTs, Employer-Funded Retirement Benefit Schemes, Contractor Loans schemes and self-employed benefit schemes – known collectively as disguised remuneration (“DR”) schemes.

Register to settle

As a result of the Supreme Court Ruling, HMRC will be inviting participants of DR schemes to register an interest in settling their tax liabilities arising from the use of these arrangements. Settling will prevent further immediate action by HMRC, as well as stopping interest charges from rising further and giving access to extended payment terms, where these are needed. HMRC will be issuing details of how to register and settle in the coming weeks.

In the meantime if you want to contact with HMRC about settling your clients’ affairs, you can email HMRC; or if you’re already speaking to someone in HMRC about the use of a DR scheme, or have a customer relationship manager, contact them.

Upcoming digital meeting

Experts involved in the Rangers case will be at the digital meeting on 22 September on Tax Avoidance. Register to attend now.

Regular updates

Over the coming weeks, HMRC will be publishing further information following the Rangers decision on the registration and settling process, settlement terms and the implications of the case.