: Fri Apr 03, 2009 10:44 am
Adeybull wrote:
If it WAS evasion, then in terms of the salary cap it could only be the grossed-up back tax and NIC that would count anyway. Not any penalties or interest.
Agreed.
Regarding whether it would be unjust (in those circumstances) to re-open prior-year salary cap reviews: IMO the RFL would HAVE to. Clubs that indulged in these schemes did it in the full knowledge that they might be challenged. They took a calculated risk. Other clubs did not. Those that did will have received the rewards in terms of having more bang for their bucks. They can gave no qualms if it transpires that in doing so they cheated both the British taxpayer and the salary cap, and should pay the price accordingly.
It depends. What makes you think they did it in the full knowledge they would be challenged? They've been doing it for several years. If they were doing it with the RFL's knowledge and blessing it would be unjust to penalise them for a common mistake, if that is found to be the case, IMHO, of course.
If the RFL did NOT reopen, the would surely face action from clubs who either did not engage in this activity, or who broke the cap for other technical reasons and were rightly punished accordingly?
These are very different circumstances to other breaches. These are clubs seeking to optimise their tax efficiency, not find ways around the cap. If the schemes are found to be avoidance then its' an unfortunate bi-product that they MAY have breached the cap as a result. You can't apply the same punishments to, say, having a club sponsor sponsor a player, or simply spending too much.
All those who have played merry hell on here for years about the Bulls' having "cheated" to win the 2005 GF could have no arguments in acting the same if it transpired that other clubs (and tbf I'd be pretty surprised if Leeds was one, unless anyone knows otherwise?) had done likewise?
Firstly, that's assuming they get penalised for this at all, secondly that is assuming that those penalties take us over the cap and finally, for the reasons stated above, I think it would be very different circumstances to other clubs breaches. But if fans of clubs who have breached the cap over the years feel any better about their club as a result then fine.
If it IS ruled to be evasion, then you as a lawyer could surely not condone it as your comment appears to suggest you do? You believe it would be wrong to penalise a club engaged in tax evasion? (If, indeed, that's what it was).
My comment was purely on the basis it was avoidance. I do not condone evasion. My personal opinion is it was not evasion. I've seen many schemes like this over the years.
My understanding is that HMRC are pursuing this issue - and it started with soccer IIRC - on the basis that tax was evaded not merely avoided.
HMRC do not win every case they bring. far from it in fact.
This is alluded to in the Grauniad article - e.g. "...and there are suggestions that they may be forced to make retrospective payments which in a couple of cases could run well into six figures."
The Grauniad article still refers to HMRC as the Inland rev so I will take everything in there with a large pinch of salt.
If, though, it transpires that all HMRC can demonstrate is avoidance using a loophole that they - or the government - subsequently close, then yes its not a historic salary cap issue, and I agree with your previous comment as applied to tax avoidance (as opposed to evasion). And yes, it that case affected clubs would have little to worry about historically, although rather more to worry about going forward especially where they cannot get out of any contractual commitments to pay x amounts free of tax
Yup, a fair summation.[/quote]
