The Supreme Court delivered another of its landmark decisions on 5 July. The court rejected the appeal by RFC 2012 (the name of the former Rangers Football Club) against the decision of the Court of Session. Lord Hodge, delivering the judgment of the court, said: ‘The central issue in this appeal is whether it is necessary that the employee himself or herself should receive, or at least be entitled to receive, the remuneration for his or her work in order for that reward to amount to taxable emoluments. A careful examination of the provisions of the primary legislation reveals no such requirement.’

The case concerns employee benefit trusts. The football club paid money into a Jersey trust, which allocated it to sub-trusts for individual footballers and other employees. The sub-trusts in turn made loans to the employees. The findings of fact by the First Tier Tribunal made it clear that the amounts paid into trust were in relation to the footballers’ employments. Accordingly, the Supreme Court had no difficulty in finding that the general charge to tax arose before considering any other charges on loans etc. This is a killer blow to formulaic remuneration planning, where those who devised the plan sought to rely on the legal form in which the money was paid to the employees to escape taxation.