Case details

RFC 2012 Plc (in liquidation) (formerly The Rangers Football Club Plc) (Appellant) v Advocate General for Scotland (Respondent) (Scotland)

Case ID: UKSC 2016/0073

Case summary

  1. Whether the Court of Session erred in law in reversing the specialist Tribunals below and concluding that payments of "emoluments" or "earnings", for the purposes of the Income and Corporation Taxes Act 1988 and the Income Tax (Earnings and Pensions) Act 2003, had been made by the appellant to its employees.
  2. Whether, in order for a payment to constitute earnings for PAYE and NIC purposes, it is sufficient that the payment was "derived from" work done by a particular employee and/or it "it formed part of the employee’s employment package".
  3. Whether the powers which each employee held as protector of a subtrust had the effect that the funds in that subtrust were unreservedly at the disposal of the employee and were earnings for PAYE and NIC purposes.

Murray Group Management Ltd established a Principal Trust for the benefit of its employees and the employees of any group company including the appellant which entered into a deed of adherence. The appellant established a number of subtrusts for the benefit of their employees families. The appellant would pay a contribution to the Principal Trustee with a direction that a sub-trust be established and funded for a family of a particular employee. The employee was appointed protector of the subtrust, and the subtrust trustee would lend the employee money that had been advanced to the subtrust from his employer.

The Commissioners for Her Majesty’s Revenue and Customs determined that these payments constituted earnings for PAYE and NIC purposes and sought to impose charges to tax.

The First-tier Tribunal allowed the taxpayers appeals and held that no payment of earnings had been made. The Upper Tribunal refused the Commissioners appeal. On appeal, the Court of Session held that payments of earnings for PAYE and NIC purposes had been made by the appellant. It found that the payments made to the Principal Trustee, and in due course to the subtrusts, amounted to a re-direction of income.

The Court of Session granted permission to appeal to the Supreme Court on the question of whether the payments were earnings.

Judgment appealed

[2015] CSIH 77



RFC 2012 Plc (in liquidation) (formerly The Rangers Football Club Plc)


Advocate General for Scotland



Lord Neuberger, Lady Hale, Lord Reed, Lord Carnwath, Lord Hodge

Hearing start date

15 Mar 2017

Hearing finish date

16 Mar 2017

Watch hearing
15 Mar 2017 Morning session Afternoon session
16 Mar 2017 Morning session Afternoon session