Rangers tax case: Your questions answered on the SPL investigation

A look at how the case between the two parties will be constructed when it meets in early 2013.

SFA statement on Rangers due
©SNS Group

Rangers face a crucial few months as an independent commission waits to continue its investigation into whether the club broke Scottish Premier League rules.

The club is accused for failing to declare payments and contractual details to players over a period of 11 years. If found guilty, the club could have its titles from those years stripped.

Evidence given to the tax tribunal has for the first time given us a clear idea about the likely cases both for and against the club.

The tax tribunal heard evidence from key figures involved in EBT payments at the club between 2001 and 2010.

Here, based in the evidence given at the tribunal, STV examines the key questions. Two companion articles then set out the case for and against Rangers, again based on the tribunal documents.

The first looks at the possible case for Rangers, based on what was said at the tribunal.

The second then outlines the possible case for the SPL, based on evidence and conclusions also made at the tribunal.

What are Rangers accused of?

It has been admitted by the Murray Group, which operated Rangers Football Club during the period in question, that certain players were given payments through trusts, known as Employee Benefit Trusts (EBTs).

Giving evidence at the tribunal, those responsible for administering EBTs at Rangers stated clearly that they did not declare the payments to the Scottish Premier League, nor to the Scottish Football Association, because they did not believe it necessary to do so under the rules at the time.

The allegation being investigated by the commission is that the players in question were being given the payments as compensation for playing football for Rangers. If that was so, and given they were not declared to the SPL, they would be in breach of the rules.

The SPL commission has broken down the time periods for these allegations into three. They go from November 23, 2000 to May 21, 2002, May 22, 2002 to May, 22 2005 and May 23, 2005 to May 3, 2011.

The allegation made in the first two periods is that the rules of both the SPL and SFA were breached “by failing to record EBT payments and arrangements in the contracts of service of the Specified Players and/or other Players and by failing to notify them to the SPL and the SFA.”

The same allegation is made for the third period. A secondary issue is raised in the third period which directly alleges the club breached league rules by fielding ineligible players.

What are EBTs?

In a document setting out the framework of the case between the SPL and Rangers, the commission offers this wording of what it perceives EBTs to be.

"Payments made… into an employee benefit trust or trusts for the benefit of Players, including the Specified Players, employed… as Professional Players, Registered and/or to be Registered as Professional Players with the Scottish Premier League and Playing and/or to Play for Rangers FC in the Scottish Premier League and payments made… into a sub-trust or sub-trusts of such trust or trusts of which such Players were beneficiaries, payments by such trust or trusts and/or sub-trust or sub-trusts to such Players and/or for the benefit of such Players and any and all arrangements, agreements and/or undertakings and the like or similar relating to or concerning any of such Players and payments."

What are "side-letters"?

The “side-letters” were commonly used, according to tribunal evidence, to detail payments which would be made to Rangers players through the trust. These were secondary and were not detailed in the contract of service which was sent to football’s governing bodies.

It is stated in the tribunal’s “findings of fact” that: “Rangers did not consider it appropriate to have side-letters registered.”

What are the specific rules?

Rangers are under investigation over two specific rules. First, SPL rule D9.3 states all payments made to players for playing football must be registered.

It says: "No player may receive any payment of any description from or on behalf of a club in respect of that player’s participation in Association Football or in an activity connected with Association Football, other than in reimbursement of expenses actually incurred or to be actually incurred in playing or training for that Club, unless such payment is made in accordance with a Contract of Service between that Club and the Player concerned."

The second rule under scrutiny is D1.13 which states that all contracts must be lodged with the governing body.

It says: "A club must, as a condition of registration and for a Player to be eligible to play in official matches, deliver the executed originals of all contracts of service and amendments and/or extensions to contracts of service and all other agreements providing for payment, other than for reimbursement of expenses actually incurred, between that club and player, to the secretary, within fourteen days of such contract of service or other agreement being entered into, amended and/or, as the case may be, extended."

What has to be proved?

Based on the allegations made, two facts have to be established.

Firstly to find Rangers breached rules throughout the three time periods given, it must be proven that the club had a duty to record EBT payments to the SPL as part of documentation on payments made for playing activities.

It must also be proven these were not submitted to the SPL, although this has been broadly conceded already in the evidence given at tribunal.

Secondly, the commission will have to prove ineligible players were fielded by Rangers between May 2005 and May 2011.

The same facts must be proven as in the first allegation, but SPL rules prior to May 2005 did not state players were not correctly registered if said documentation was not provided.

In either case, titles could still be withdrawn from the club, as this is an accepted sanction for any breach of league rules.

What are the possible sanctions?

The SPL has a menu of 18 punishments, which are available to the commission to impose, if the club are proven guilty.

They range from a warning or censure to a fine, or to the withdrawal of a title or award.

Who is on the commission?

Lord Nimmo Smith will be assisted by Nicholas Stewart QC and Charles Flint QC.

What are the timescales?

The commission was due to hear further evidence between November 13 and 16, with provision for additional hearings on November 20 and 21.

This has now been postponed until late January/early February due to an illness.

Now read our look at the possible case for Rangers, based on what was said at the tribunal, and the possible case for the SPL, based on evidence and conclusions also made at the tribunal.

One account. All of STV.

This field is required. That doesn't look like a valid e-mail format, please check. That e-mail's already in our system. Please try again.
ShowHide
Forgot password?
This field is required. At least 6 characters please. Did you enter your details correctly?
If you've forgotten your details then use the 'Forgot password?' link.
Need to reset your password?

We'll send a link to reset your password to

We've sent you details on how to reset your password

Please check your email and follow the instructions.

Forgotten your email address?

Have you forgotten the email address that you previously joined with? Don't worry, by emailing enquiries@stv.tv we can help.

One account. All of STV.

This field is required. Please enter at least 2 characters
This field is required. Please enter at least 2 characters
At least 6 characters please
ShowHide
This field is required. At least 6 characters please.
You have to be 16 or over to join
This field is required. This doesn't appear to be a valid date
Type your full postcode and select your address This field is required. It doesn't look like you've entered a valid postcode. Can't find your address? Confirm the details you've given us are correct by clicking here

By continuing you agree to our Terms of Use, including our Privacy Policy and Cookie Policy. Any issues contact us.

Upload Profile Picture

Please make sure your image is under 2mb in size and a valid JPG, PNG or GIF.

Are you sure?

Unfortunately, you'll be unable to access our premium content. We’ll be sorry to see you go, but if you change your mind you can rejoin us at any time.

Please verify your STV account

Please verify your STV account using the email we sent you. If you have lost the email, we can send you another one, just click the button below.

Thanks

We've sent you a new verification email.
Please check your email and follow the instructions to verify your account.

Welcome to STV
Thanks for joining us.

Oops!

Sorry, you must be at least 12 years old to place a vote for your Real Hero.

Please review our Voting Terms of Use for more information.

Oops!

Sorry! It seems that you are using a browser that is incompatible with our voting service.

To register your vote please copy the below URL in to your regular mobile browser. We recommend Google Chrome, or Safari.

http://shows.stv.tv/real-heroes/voting

Oops!

Sorry, you seem to have already voted in this category.

Thanks for voting

Now share your vote with friends on your social network

Share on twitter Share on facebook

Cast your vote

Please register or sign in to continue.

Cast your vote

This field is required. This doesn't appear to be a valid date

Cast your vote

Please fill out this form to cast your vote. As you are under 16 years old you will not create an STV account. Why do we need these details?

This field is required. Please enter at least 2 characters
This field is required. Please enter at least 2 characters
This field is required. That doesn't look like a valid e-mail format, please check.
Location This field is required.
Parental Consent This field is required.

That's you. All that's left is to click the 'Submit Vote' button below. By doing so, you confirm that you and your parent or guardian have read and accept our Voting Terms of Use, Privacy Policy and Cookie policy, and that the details you have entered are correct. We'll look after them as carefully as if they were our own.