As most people will be aware by now, the challenge by HMRC to the EBTs set up by Glasgow Rangers has failed at the Upper-Tier Tribunal.

The challenge was to the tax-free loans that were made to players and staff.

The First-Tier Tribunal found that the loans were for the most part ones capable of being repaid and therefore were not taxable. HMRC disagreed, However, that ruling has been upheld by the Upper-Tier Tribunal.

Is this the end of the EBT saga? – I doubt it.

HMRC is currently considering lodging a further appeal so we will need to watch this space.

Where does this leave the taxpayer? Many taxpayers have been watching and following the Rangers saga with bated breath. Some taxpayers have decided to settle with HMRC but many have taken the view that they would see where the Rangers case ended up and then make an informed judgement. So we are now at taxpayer 2 – HMRC 0. Most people have decided therefore to sit tight.

But the decision to sit tight and wait rather than volunteer tax payment will soon be taken out of the hands of the taxpayer. HMRC has now published a list of reference numbers of tax avoidance schemes where it will require payment of tax before any dispute over the effectiveness of the scheme is resolved.

These new rules give HMRC the power to demand up front payment of tax by issuing an “accelerated payment notice”. These notices will be issued over a number of months in relation to previously notified schemes.

There are a number of EBTs on the list.

So the circus continues. Many clients who put EBTs in place need to prepare themselves for such a demand and the implications this would have from a cash flow point of view. The best advice is to prepare for the worst in the event that such a notice lands through the letterbox.

And keep in touch with your tax advisor – times they are a changing…