Supreme Court to rule on tax dispute which played role in Rangers collapse

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A long-running tax dispute which played a significant role in the financial collapse of Rangers Football Club will finally reach a legal conclusion on Wednesday.

Supreme Court judges will deliver their binding verdict on what became known as the Rangers "big tax case".

A two-day hearing was held in March following an appeal by the liquidators of the company now known as RFC 2012.

BDO launched a challenge after judges in the Court of Session in Edinburgh ruled in favour of Her Majesty's Revenue and Customs in November 2015, following two tribunal defeats for the tax authority.

The argument centres on whether payments made to dozens of players and other staff from 2001 to 2009 amounted to taxable earnings or loans.

About £50 million was paid through an Employee Benefit Trust (EBT) scheme administered by the Murray Group, then majority shareholder of the Glasgow club.

Legislation was introduced in late 2010 in a bid to stamp out the use of EBTs by thousands of companies which tried to avoid tax by paying so-called discretionary loans to employees and their families.

But HMRC continues to pursue firms which used the schemes beforehand, with the final outcome of the Rangers case viewed as an important precedent.

Rangers went into administration in February 2012 over a separate tax debt and were consigned to liquidation in June of that year.

The club had been bought in May 2011 by Craig Whyte after former chairman Sir David Murray initially struggled to find a buyer willing to take on a potential "big tax case" bill.

Mr Whyte was later cleared of fraud in relation to the takeover.

The club's assets, business and Scottish Football Association membership were transferred to a new company to allow the team to continue playing as Rangers, and Wednesday's verdict will not directly affect the current regime at Ibrox Stadium.

An HMRC victory would spark renewed calls in some quarters for the club to be stripped of titles won during the EBT period.

Rangers had to pay a £250,000 fine issued by the Scottish Premier League in 2013 after the oldco club were found to have withheld "side letters" detailing EBT payments to players in breach of league rules, but a commission led by judge Lord Nimmo Smith ruled they had gained "no sporting advantage".