5th Nov 2015

Selling your business, and Rangers Football Club

What do these two have to do with each other? Well, part of what brought Rangers crashing down was the use of creative tax planning schemes – particularly Employee Benefit Trusts – to “pay” their players without incurring income tax. HMRC ruled that invalid, and that created a huge liability in Rangers’ accounts. This has been litigated for years, and the latest (Nov 2015) on this has been the Court of Session in Edinburgh upholding HMRC’s contention. Basically the Court have said that if the payments looked like remuneration for employment, however it was dressed up – that’s what it was.

Why does this matter to you? Well, we acted for shareholders in the sale of a business a while ago where they had also been “sold” an EBT scheme, which HMRC had then challenged. Whilst the promoters of the scheme assured the sellers, and the buyers, that the scheme was valid, the buyers understandably wouldn’t take the risk of taking on a business with that threat hanging over it. So regardless of the merits of the scheme, the buyers insisted that the sellers pay what HMRC were demanding – which amounted to a substantial part of the value of the business. Don’t encumber your business with dodgy tax schemes!

Be sociable. Share!

Get Social

Connect with us on LinkedIn

LinkedIn
  • legal-500-leading-set-20144
  • Chambers UK 2015
  • Lexcel Accredited
  • Investors In People
  • Conveyancing Quality