THE TAXMAN has warned it is prepared to take legal action against other "disguised remuneration tax avoidance schemes" in the wake of its victory in the fight with Rangers over the club's use of Employee Benefit Trusts (EBTs).
HM Revenue & Customs has said it will use the so-called Rangers Big Tax Case decision to proceed against other schemes "using the full range of our available tools".
This will include whether to issue follower notices and, if relevant, associated accelerated payment notices.
"It will also include accelerating litigation where users choose to continue challenging HMRC on their scheme," HMRC has said.
More than £47m was paid to Rangers players, managers and directors between 2001 and 2010 in what was argued were tax-free loans.
However, HMRC argued the payments were earnings and should be taxable.
Two tribunals in 2012 and 2014 had previously found in Rangers' favour, but the Court of Session found in favour of HMRC after an appeal in 2015.
Liquidators were then allowed to appeal to the Supreme Court in London.
And in July the Supreme Court unanimously dismissed RFC's appeal and ruled in favour of the taxman.
In a guidance bulletin the taxman has warned that the court decision means that employment income paid from an employer to a third party is still a taxable wage.
And it warned that it intends widening the net to act against other disguised remuneration tax avoidance schemes.
They include wages routed through employer-funded retirement benefit trusts and a range of contractor loans schemes.
HMRC "strongly advised" those who think they are using a disguised remuneration scheme to "withdraw from the scheme and settle your tax affairs".
The taxman added: "You’ll avoid the costs of legal action and minimise interest and penalty charges on the tax you should have paid."
Five Supreme Court judges had unanimously dismissed the appeal by the liquidators of RFC2012, the company formerly known as Rangers Football Club before its financial collapse in 2012.
Lord Hodge said the appeal raised “a fundamental question” about the nature of the income tax charge on employment income.
In its guidance HMRC say: "In their decision, the court agreed with HM Revenue and Customs (HMRC) that the tax avoidance scheme used by Rangers Football Club doesn’t work.
"They said that Rangers should have deducted Income Tax and National Insurance contributions from payments they made to the scheme, which was an employee benefit trust (EBT).
"In paragraph 39 of the Court’s decision, they set out the principle that employment income paid from an employer to a third party is still taxable as employment income.
"HMRC’s view is that this principle applies to a wide range of disguised remuneration tax avoidance schemes, no matter what type of third party is used."
The big tax case decision brought the debate over "tainted titles" into the public arena again with some calling for the club to be stripped of titles and competitions won in the years the EBTs were used claiming Rangers had obtained an unfair sporting advantage.
It also has a major bearing on the amount of money given to creditors from the liquidation of oldco, The Rangers Football Club Plc.
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