EPL clubs could lose millions to HMRC tax avoidance crackdown

English football clubs and their players could be hit with multi-million pound settlement charges relating to tax-avoidance schemes, if HMRC wins a Supreme Court case against Scottish club Rangers next week.

Five or six major clubs in England have already reached private settlements with the tax authorities in order to avoid any further punishment, according to reports on Thursday.

Bills for tens of millions of pounds could be handed to clubs involved in the improper use of employee benefit trusts (EBTs).

Glasgow's Rangers are due to go up against HMRC in the Supreme Court next Wednesday, and a victory for the latter is likely to trigger a wave of tax demands on some of the biggest clubs in the country.

The Scottish club went into liquidation in 2012 after failing to reach an agreement with HMRC over unpaid taxes, including the use of EBTs.

The use of such trusts was widespread during the late part of the 1990s and early 21st century before a clampdown on tax regulations in the UK in 2010.

Individual players would also have to take responsibility for their own salaries, according to tax experts.

A tax expert told The Times he knew of "five or six cases" where clubs had already settled with HMRC, including instances where clubs had received tax demands after disclosing their own use of EBTs.

Andy Wood, a director of Cheshire-based Enterprise Tax Consultants, also told the Press Association he already helped one English club concerned about the Rangers case to reach a six-figure deal with the taxman over their EBT for a senior official.

The Rangers has become known as 'the Big Tax Case' among football clubs, with many very worried about what the outcome might mean.

Rangers' administrators BDO have launched an appeal to overturn their 2015 defeat at the Supreme Court on 15-16 March.

A Scottish Court of Sessions ruling over the blue-clad Glasgow club's use of employee benefit trusts (EBTs) between 2001 and 2010 gave HMRC the chance to reclaim some of the £49m it said it was owed when Rangers went into administration in 2012.

If HMRC wins at the Supreme Court, it could see several other clubs that used the tax-avoidance vehicle being sent accelerated payment notices for income tax and interest, with players who have taken loans from the trusts liable to be charged due an imminent change in the law that would require them to pay tax on monies not repaid by 2019.

"Being asked to stump up large sums may come as a shock for players, especially those in retirement who do not have the earning capacity they once might have had. Some might even be forced into bankruptcy," Wood told PA.

Glasgow rivals Celtic have also suggested a loss for BDO in the case could lead to strong calls for footballing titles from the affected seasons to be stripped from Rangers.