Was Lord Nimmo Smith Duped?

By Auldheid

The Lord Nimmo Smith (LNS) Commission, established in 2012 by the SPL to investigate the use by Rangers Football Club (RFC) of Employee Benefit Trusts with side letters, was derailed and duped – deliberately or otherwise – by the inexplicable failure to supply already existing evidence of earlier ‘irregular’ RFC EBTs. Consequently the invalidated Commission findings must now be set aside in the best interests of Scottish Football. The facts are:

SPL announced on 5 March 2012 that every EBT with side letters used by Rangers Football Club (RFC) from 1 July 1998 would be investigated.
However, only EBTs with side letters from 23 November 2000 onwards were actually scrutinised under the ‘SPL LNS Commission’ terms of reference. Why? Full details of three EBTs, two with side letters, weren’t provided to SPL lawyers as requested in March 2012 and neither was key HMRC documentation.

• The withheld documentation would have revealed three EBTs from 1999 and 2000, two with side letters, which were ‘illegal’ in HMRC terms and ‘irregular’ in LNS terminology. In 2005 Murray International Holdings (MIH) denied holding these side letters when questioned by HMRC. But March 2011 saw RFC finally admit liability for “The Wee Tax Case” following legal advice. The EBTs in question were illegal and side letters clearly existed.

• Side letters were lodged in each applicable player’s contract file at Ibrox and when HMRC at a later time requested two files for examination from MIH they were obtained from Ibrox. But on checking the files HMRC found no trace of the side letters which they already knew existed and should have been in the files. These missing side letters aren’t necessarily related to those mentioned previously but indicate behaviour.

Similar EBTs used by a Scottish-based company – unconnected to Rangers – had already been declared ‘irregular’ following HMRC legal action. LNS subsequently ruled ‘no dishonesty’ in ignorance of the highly relevant evidence which revealed deliberate dishonesty in 2005 and possibly 2012. This has exposed his Lordship’s Decision as fatally flawed particularly with regard to his not considering sanctions of a sporting nature.
The missing documentary evidence was drawn to the attention of SPFL* lawyers and the SPFL Board by The Scottish Football Monitor blog (TSFM) in Feb 2014. The lawyers subsequently failed to reasonably convince TSFM that the withheld documents wouldn’t have impacted on the LNS Decision and at no point has the SPFL Board responded to the points raised.
Lord Nimmo Smith was informed by email of the documentation and correspondence in April 2014 but has not responded. Fourteen journalists have also been provided from September 2014 with the same evidence and TSFM blog debate. No story has been published and only one engaged and confirmed the case was sound. In September the SPFL lawyers stated that all documentation had been passed to the SFA.

Campbell Ogilvie, when Secretary at RFC, was involved in the setting up of the first of the irregular EBTs in 1999. By June 2011 – when he was SFA President – the irregular EBT tax bill became due and resulted in “The Wee Tax Case”. Ogilvie was in receipt of a later RFC (“Big Tax Case”) EBT which is of course still currently under dispute by HMRC.

Although Mr. Ogilvie excused himself from the EBT investigation proceedings he gave evidence to the Commission, but appears not to have provided any evidence that would have highlighted the differences in tax treatment between the three earlier (illegal) EBTs and the later ones.
Stewart Regan, SFA CEO, may or may not have had the distinction explained by the SFA President. If not! Why not? Lord Nimmo Smith apparently wasn’t informed and appeared unaware illegal EBTs existed when issuing his tribunal findings. The extent of that ignorance was total as revealed by LNS stating in his Tribunal Decision: ‘We are not aware that they were different trusts. We shall treat them as a continuous trust.’ If only the withheld evidence had been provided it’s difficult, if not impossible, to believe the same decision could have been reached.

Q&A

Why revisit the LNS Decision? The hidden evidence clearly reveals that the whole truth wasn’t presented to LNS causing his Commission to get it horribly wrong.

What hidden evidence? That DOS EBTs had already been declared illegal and although Rangers accepted this and accepted the ensuing tax liability this was kept from the LNS Commission.

Does it matter? Only if you are interested in establishing the Truth which is the very least the Scottish game and its fans deserve. Lord Nimmo Smith might also be unhappy at being kept in the dark.

How did the judge get it wrong? LNS concluded from the evidence presented that all EBTs were similar. They weren’t and DOS EBTs had already been declared illegal. It seems unlikely that senior Rangers people and others involved in football governance were totally unaware of this.

Name names! Well the SFA President is in a unique position to do so. Although it appears he didn’t tell LNS about the different EBTs. Campbell Ogilvie authorised the first DOS EBT in 1999 and himself benefitted to the tune of £95K as a beneficiary of the revised EBTs. If anyone knows the difference between them it’s him. Mr Dickson who provided a witness statement to the LNS Commission and was responsible for the “mechanics” of EBT administration and the files in which documentation was kept at Ibrox might also be in a position to shed light on the DOS EBT side letters that were stated by MIH not to be on files when HMRC asked questions in 2005.

Can the Truth finally emerge? Only by reconvening the Commission preferably under LNS who would surely welcome having the full facts this time round. It would not only restore his good name but that of Scottish Justice.

The earlier seriously flawed judgement cannot be allowed to stand in the face of the facts which have been unearthed and which render the previous findings invalid.

Will it happen? It’s down to Scottish Football fans and up to every single one of us – irrespective of club – to speak as one and tear down the united wall of silence erected by the SFA, SPL, SPFL, the SMSM and even Lord Nimmo Smith’s Commission which was used to provide a veneer of legality and then appears to have been duped.

Justice must not only be done but be seen to be done, even at this late hour. And it must not be carried out behind closed doors with fans excluded and no transcript of the evidence produced.

Notes

Initial RFC EBTs – The Wee Tax Case – used a Discount Option Scheme subsequently ruled illegal by a FTT in Oct 2010.

From 2002/03 the RFC EBT scheme was altered but HMRC still believed the new arrangement was illegal and started the Big Tax Case. To date a First Tier Tax Tribunal and an Upper Tier Tax Tribunal have ruled these EBTS legal but HMRC has again appealed with a hearing due soon.

* The Scottish Football League (SFL) and Scottish Premier League (SPL) amalgamated to form the Scottish Professional Football League (SPFL) in June 2013.

A video of an interview with Mr Regan by Alex Thomson Ch4 News and further detail appear on-line at http://www.tsfm.scot/did-stewart-regan-ken-then-wit-we-ken-noo/