THE tax man has lodged an appeal against a ruling that found in favour of Rangers' use of controversial Employee Benefit Trusts (EBTs).

The Ibrox club argued the payments, thought to be close to £49 million, had been loans rather than wages and therefore not subject to tax.

It comes three months after a First Tier Tax Tribunal found in Rangers' favour in the so-called "big tax case". It stated the "controversial monies received by the employees were not paid to them as their absolute entitlement".

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Now HM Revenue and Customs (HMRC) has taken action on its pledge to fight the tribunal's ruling and it will now be heard at the Upper Tax Tribunal (UTT).

It argued the loans were in effect player and staff wages, which should make them liable to income tax and National Insurance.

It was the prospect of the EBT tax debt that many believe was the key to Rangers' financial difficulties, with Lloyds Banking Group insisting club debts were cleared, sparking the disastrous move to sell to Craig Whyte.

If the HMRC appeal were successful, the debt would be added to the millions left behind by the old club company, now known as RFC 2012 plc, and would have little effect on the new club company headed by Charles Green.

In November, Lord Hodge approved a winding-up order which moved RFC 2012 plc out of administration and into the hands of liquidators. Liquidators BDO are responsible for distributing what is left of the old Rangers company to creditors as part of the liquidation process.

HMRC, which has previously said it was disappointed by the First Tier Tax Tribunal decision, has been granted leave to appeal.

If there is yet another appeal after the UTT hearing, the case will go to the Supreme Court – a process which could take years rather than months to resolve.

The first tier tribunal ruling, endorsed by two judges with one dissenting, stated the "controversial monies received by the employees were not paid to them as their absolute entitlement". They were considered to be loans that can be repaid.

The dissenting opinion came from Dr Heidi Poon, who concluded the money received by the employees through the trust constituted earnings for income tax purposes.

After the verdict, Rangers chief executive Mr Green said that the tax tribunal's finding "undermines the validity" of the Scottish Premier League's own investigation into alleged undisclosed payments to players.

Rangers made payments on behalf of several players and directors through the 81 sub-trusts between 2001 and 2010.

Hearings in the case took place in Edinburgh towards the end of 2011 and concluded in January this year.

Oldco Rangers went into administration on February 14, last year, nine months after Mr Whyte bought Sir David Murray's 85.6% shareholding in Rangers for £1.

Administrators Duff & Phelps were appointed by Mr Whyte with the company up to £124m in debt. HMRC subsequently rejected proposals for a creditors' agreement that would have allowed the old club to continue.

Rangers' assets, including Ibrox stadium and the Murray Park training complex, were sold to a consortium led by Mr Green in a £5.5m deal in June, last year.

EBTs were commonly used to enable companies to minimise the income tax and national insurance charges on pay to high-earning employees and directors, as well as allow those companies to claim corporation tax deductions on payments into the trust.

However, many of the previous tax advantages of that particular arrangement were removed as part of the 2011 Finance Act.