Scale of Rangers EBT Scheme reveled

THE full astonishing scale of the £47million tax avoidance operation which helped bring Rangers to their knees was dramatically revealed last night.

The biggest payment made to Ibrox players and staff through the Employee Benefit Trusts (EBTs) was £6.3million to former owner Sir David Murray, right.

Sixty-three players and 24 staff are said to have received payouts.

Ex-skipper Barry Ferguson leads the list of players who received vast sums of cash over and above their normal salaries.

He pocketed £2.49million, according to figures obtained by BBC Scotland.

Former manager Alex McLeish got £1.7million and German keeper Stefan Klos was given £2million.

Striker Nacho Novo and Dutch midfielder Ronald De Boer netted £1.2million each.

But some of the sums involved were comparatively small. Former defender Steven Smith got just £7500.

And Ibrox icon Graeme Souness received £30,000 from the trust in 2001 – 10 years after leaving the club.

It’s unclear why a payment was made to Murray’s close friend Souness a decade after his involvement at Ibrox officially ended,

EBTs were used by the rich to avoid paying tax.

They are the root of HMRC’s Big Tax Case that helped plunge Rangers into crisis and is threatening to destroy the club’s 140-year history.

Rangers set up the trusts for 87 players and staff  then paid cash into them in addition to paying wages.

Money is then paid out in the form of a tax-free “loan” from the EBT. In practice, the loan is never repaid.

The recipients avoid paying the PAYE and National Insurance that millions of ordinary workers stump up at source.

From 2001-10, Rangers put £47million into dozens of sub-trusts for players, coaches and staff.

Dutch goalkeeper Ronald Waterreus’s agent questioned the scheme when he joined Rangers in 2005.

His agent was told by a club representative that using the trust was “in the interests of Ronald as it enables him to receive funds tax-free”. Murray last night insisted to the BBC that he had never received any payment from any trust which involved direct contributions from Rangers.

Rangers’ annual accounts from 2001 to 2010 show the Glasgow club invested a total of £47.659million to the Murray Group Remuneration Trust.

Separate contributions were made by Rangers’ parent company, Murray International Holdings, of at least £10million.

Funds were deposited by Rangers and MIH into the Jersey-based trust, which was then divided into sub-trusts for the benefit of players, coaching staff, directors and other employees in the form of the tax-free loans.

A further 24 Murray Group employees benefited from the scheme, currently the subject of a tax tribunal at the Court of Session in Edinburgh.

If Rangers lose the tribunal, they will be liable to repay the money, with interest, as well as a penalty for tax avoidance.

The total bill including penalties could hit £134million, according to administrators now running Rangers.

Tax adviser Paul Baxendale-Walker, who brought the EBT scheme to the Murray Group, told the BBC: “The problem as we all know is how Rangers implemented the structure, how they drove the bus.”

The SPL launched an investigation into the scheme back in March after allegations by former Ibrox director Hugh Adam that Rangers made undisclosed payments and deliberately excluded then from players’ contracts.

Adam, who left Rangers in 2002, said directors were well aware of the double contracts, but were unwilling to challenge Murray.

SPL rules state that all payments made to players in respect of their earnings from football must be declared by their club.

SPL lawyers Harper Macleod are looking into dealings back to the league’s formation in 1998.

In a statement released hours before the BBC’s expose last night, the SPL said: “The investigation into the EBT payments made by Rangers FC is being actively pursued on behalf of the SPL.

“All relevant documents, materials and information have been sought from Rangers FC and we look forward to receiving full co-operation from the club and administrators in providing everything that it and they have access to and which is required for the investigation to be completed.”

Murray has denied he handed out double contracts during his 23-year spell at Ibrox.

He said: “I’ve looked through every year to check my facts and there were no double contracts. Categorically, there were no dual contracts.”

Football forums and websites were ablaze with reaction last night to the EBTs revelations.

Mark Dingwall, of the Rangers Supporters Trust, was despondent when the Record contacted him last night.

He said: “I’m still going over it in my mind, I don’t know what to think right now.”

And fans swamped supporters’ websites.

One fan calling himself True Blue, said: “What a convoluted mess – just keeps getting uglier day by day.”

Lisburn Rangers added: “Murray, Whyte and Duff & Phelps, may you rot in Hell.”

Burnistoun comic Robert Florence tweeted a dig at former Rangers striker Nacho Novo, who joined Walter Smith on a fans march on Sunday.

He tweeted: “Will @nnovo1010 be giving that EBT cash he took to the Rangers Fighting Fund?”