Thread by @georgenturner

.@taxwatch has launched against the infamous "Mr Red" a senior official at Ranger Football Club for historic tax abuse.

This is why this is an important story for everyone interested in #taxjustice and #LoanCharge

taxwatchuk.org/mr-red/

Rangers Football Club ran a disguised remuneration scheme for many years. Players and some staff were paid in loans via an offshore trust, which they claimed was not income and so no income tax was paid.

HMRC challenged the scheme, and the case, which became known as the "big tax case" became one of the most significant and important tax cases fought by the Revenue in recent years, which was finally decided at the Supreme Court in 2017.

It is a common defense for people working in the tax industry to say that senior, qualified professionals that are members of regulatory bodies would never dirty their hands with dodgy tax avoidance schemes of the kind run by Rangers.

That kind of activity, runs the argument, is for high-street, often unregulated tax advisors. The lower end of the profession.

The case of Mr Red exposes this myth for what it is, and highlights how the problem may lie with the the lack of regulation of senior professionals.

Mr Red was the name given to a senior official at Ranges in the anonymized judgment of the FTT in Murray Group Holdings vs HMRC (The Rangers Case). He is a former tax inspector, member of the @CIOTNews and chartered tax advisor.

The judgement in the case set out some extraordinary behavior from Mr Red. At the time HMRC accused him of deliberately seeking to mislead the tribunal. The Tribunal itself talks about how he actively sought to conceal documents from an HMRC inquiry.

The type of conduct that you would expect regulators to take action over, or trigger a criminal investigation.

However, following the tribunal hearing, nothing was done. Mr Red continues to be a member of the @CIOTNews and went onto work for several major companies.

Why did @CIOTNews or anyone else not take any action? We do not know....

But the dearth of action has had severe consequences for the tax system. After the tribunal hearing, disguised remuneration schemes continued to flourish, and tens of thousands of people became involved.

This led to the #loancharge which is one of the most controversial pieces of tax legislation in recent times.
Had the dishonest conduct of the tax professionals running these schemes been confronted earlier, perhaps this might have prevented some of these schemes.

We have therefore made a complaint to the Tax Disciplinary Board, in the hope that they will take action now.

At the end of the day, the message needs to be get out there that some behavior is unacceptable from tax advisors and there are consequences for dishonest conduct.

I hope the TBD takes the opportunity to right this wrong, and that the @CIOTNews conducts a review of how such high profile cases of misconduct by their members go unnoticed by the Institute!