E is for EBT’s
The alpha and omega of Scottish football’s modern scandals, the tax fraud schemes set up by a non struck off financial advisor and former porn star, Paul Baxendale Walker, should have been watertight. Baxendale Walker always said he had built it that way and that the club screwed it up in how they implemented it.
Whether he’s right or wrong, it was a disaster.
Confusion still surrounds exactly what happened here, and even more swirls around the fact that the EBT scheme was not just one tax scam but two; the main scheme which ran for about ten years and the Discounted Options Scheme – the wee tax case – which preceded it.
The man who’s signature is on the DOS paperwork has his own section of this article; he was the SFA President when the story broke.
The scandal was uncovered when police raided Ibrox during the Stevens Inquiry into transfer deals and bungs; they were investigating the dodgy deal which took Boumsong to Newcastle whilst Sounees was manager there.
The investigation didn’t find any evidence of a fraud in that case; what it found instead was the whole EBT scheme, and they handed it over to the Treasury.
In order to hide as much detail from HRMC , the scheme had involved players being issued with “side contracts”, something the club had flatly denied when HMRC had asked them about it. That dishonesty constituted fraud, something the club’s own lawyer was at pains to point out to them when the Discounted Options Scheme was rumbled.
Those side contracts were also never disclosed to the SFA, which should have rendered all the games involving the players who had them null and void; thankfully for all at Ibrox, Sandy Bryson was on hand to offer his own unique interpretation of the rules.
Nevertheless, EBT’s destroyed Rangers. When the club entered administration, HRMC rolled the EBT scheme up with the with-holding of PAYE by Craig Whyte to make themselves far and away the largest of the creditors, and that gave them total control of the process.
They rejected any offer of a settlement, preferring to have the corpse of the club as a warning to others.
