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The previous company behind Rangers Football Club was pulled up by HM Revenue & Customs, after it was determined that an employee benefit trust was used as an excuse to evade tax. All PAYE due under the scheme is now due to HM Revenue & Customs by Rangers Football Club, which is already in liquidation. The claim of HM Revenue & Customs stands at £72 million. The decision was taken on July 5, 2017, which means that the body has time till July 4, 2018 to issue follower notices.
Tax evasion gone wrong
It is known that the employees of Rangers Football Club were advised to go for advances against deposits to an employee remuneration trust instead of going for the PAYE scheme. This offered certain kind of indemnity to the employees, which now stands void and worthless. Employees had time till May 31, 2018 to engage into negotiations with HM Revenue & Customs with regards to the income tax received on the funds from the foresaid trust. It is anticipated that the total amount owned by employees is around be £24 million, and many may end up in bankruptcy.
Issue of Follower notices
When a final judicial ruling is out, HM Revenue & Customs can issue follower notices within a year of the ruling with accelerated payment notices,. If a company/individual gets such a follower notice, tax returns must be corrected as per the mentioned deadline and the funds must be deposited to HM Revenue & Customs within 90 days. If the same is not adhered to, a further penalty for 50% of the “accelerated payment notice” can be issued. Experts believe that compliance is the right step in this regard because HM Revenue & Customs will eventually get the amount in one way of the other. In the worst-case scenario, a winding up petition can be issued against the companies that have failed to follow the notice.
Many companies end up in insolvency on a balance sheet basis. It is possible to negotiate the payment terms with HM Revenue & Customs if your business is in a capable condition of running successfully. An arrangement can be made so that the tax is paid out of regular income in form of instalments, or the company can be asked to sell a part of the properties or business to settle the debt. HM Revenue & Customs can also suggest third party contributions. Excuses are not enough to not repay what’s due, and it is always best to follow the requirements to the best extent.
To avoid winding up, the following can be considered
- Administration
- Individual Voluntary Arrangement
- Obtaining funding to make a settlement
- Company Voluntary Arrangement
- Creditors Voluntary Liquidation
Check with experts for more details.
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