Tag Archives: governance

TUPE Regulations when a Company is in Administration

25 Jun

The vexed question of TUPE and Companies in Administration

Paul McConville’s fantastic posts on the Rangers saga from the scotslawthoughts website can be viewed here. One of the more puzzling aspects of this entire story are the TUPE regulations and how they affect the Rangers players that want to leave oldco instead of transferring to Sevco.

Normally when a company purchases another company, TUPE regulations affect the employees to ensure the same contractual rights are established for employees moving from one company to another. If I am employed on 50K a year at Company A, then under TUPE when Company B buys Company A, I am generally speaking, ensured two things – a) my job, b) the same salary and other contractual rights.

For example, if I chose to stay on at Company B I would automatically transfer to the new company. There is no doubt about this.

However, Rangers situation is a bit different. It is in administration, each day closer to liquidation. Administration can be referred to sometimes as a Non-terminal proceeding. These are treated differently than other insolvency procedures. If the liquidators were selling my company to a new purchaser, my rights has an employee, if I choose, automatically transfer to the purchasing company.

In either scenario, I can “object” or “resign“. These words used in this context have specific legal meanings.  If I didn’t want to transfer, I can”object” to my transfer. My employment would be terminated without consequence, but I would not able to cash in on any rights or statutory protections.  It not treated as a dismissal in the sense of what you and I would call a normal dismissal, but there would never be any compensation.

Resigning is different from objecting. It may be in my interest to resign if there has been major and substantial changes to my contract terms at the purchasing company. I am able to claim statutory protections arguing unfair dismissal.

The Rangers story is a little different though. Rangers are still in administration, not liquidation. Yet. What happens when a company goes into administration? The company’s affairs are handed over to administrators. They run the day-to-day affairs of the business.  However, when a company goes into liquidation, liquidators sells a business or the assets or both.  In this scenario, neither the liquidator nor the purchaser need worry about employees transferring under TUPE because reg.8(7) dis-applies the relevant parts of the Regulations.

The contentious issue is whether or not a business sold by an administrator is also exempt in the same way. Existing case law had previously suggested that were the ultimate objective of the administrator to liquidate the business following a brief period of trading, TUPE would not apply because the administration was “analogous” to insolvency proceedings (Oakland v Wellswood (Yorkshire) Ltd). This has now been refuted by the Court of Appeal in Key2Law (Paul McConville writes extensively about this in his blog),which ruled that reg.8(7) of TUPE does apply in administration; therefore, employees will be transferred to the purchaser under TUPE when the seller is in administration if they choose to go.

In the present fiasco that is known as the Rangers Football Club, the first practical implication for Charles Green’s Sevco is this – The newco purchased the assets and business of RFC from the administrators, Duff & Phelps. Therefore, he should have been able to expect any employees that chose to move over to come with their terms and conditions of employment protected under TUPE. This point does not seem to be arguable. Therefore, players would have had the right to be consulted prior to the transfer and if this did not take place (this is the point that appears to be argued over) they will be able to claim protective awards after the fact. At least the position is certain, for the time being. It doesn’t in any way suggest that the players MUST go over.  They can either object or resign.

In the real world the problem is that purchases from administrators are often “shotgun fashion“, with the administrator anxious to achieve a quick sale and the purchaser just as eager to pick up a cheap asset.  In this case Charles Green picking up the players on the cheap. Normally when there is a slow process of sales, the purchaser and seller has time to undertake the usual TUPE consultations.

When Mr Green tried to do is pull a fast one on his players. When he says, “The transfer of contracts has already happened and the club’s clear legal advice is that players’ purported objection is ineffective. Rangers would like to make it abundantly clear to players, agents and the chairmen and managers of other football clubs that we will take whatever steps necessary to challenge what we regard as a breach of contract to protect the interests of our club.”

Yet in reality in a business sense, administrators are often “trigger happy” when it comes to dismissals. This is the purpose of TUPE. After all the objective of administrators is to shed liabilities and to sell any assets or business as quickly as possible, so the scope for claims of unfair dismissal for reasons connected with the transfer, and protective awards, is hugely enhanced. When a purchaser buys assets from administrators, the risk is very high and now even more so as a result administrators of the Key2Law decision as the previous “escape route” provided by Oakland is no longer available.

Thus with Rangers, the issues around transfer of players seems to revolve around whether or not D&P has sufficient time to consult all employees under TUPE. Short of going through the full and proper TUPE consultations, there is no remedy for this. The result is increased protection for employees and discouragement to buyers who will now be less willing to purchase assets from a company in administration.

For a business, the focus must be on carrying out the usual full TUPE consultations (if possible) when purchasing from an administrator. Outside of this Charles Green will have very little protection against what TUPE protects - the employee, unless it is possible for him to argue that TUPE does not apply on some other ground. He would have to successfully argue, that no actual undertaking has been transferred – obviously this is a fact sensitive defence and depends on analysis of what has actually transferred to Sevco Additionally, any redundancies for a reason connected with the transfer might also be justifiable if it can be shown they were made on economic, technical or organisational grounds entailing changes in the workforce. Not what Green is seeking to argue here at all.

Green could also look for indemnities from the administrator, but if Old Rangers are going into into liquidation, there will be no-one to enforce the indemnities against, so they will not be worth much.  The only other “protection” is to ensure that the assets are purchased as cheaply as possible so as to factor in the potential cost of any TUPE claims.

Following Key2Law and the recent decision in Spaceright Europe Limited v Baillavoine (that dismissals can be in connection with the transfer even where no prospective transferor has been identified), the Court of Appeal has confirmed that a dismissal can be automatically unfair under TUPE even if  the transfer itself is not in contemplation at the time that the dismissal is effected. In this case the administrators, who intended to sell the business as a going concern, dismissed a number of employees including the claimant. The business was subsequently purchased by Spaceright Europe Limited. The Court of Appeal found that the claimant’s dismissal was automatically unfair because he had been dismissed for “a reason connected with the transfer” and so was automatically unfair. The fact that the dismissal took place in order to achieve a sale at a future date was sufficient.

We can see that these cases deal with the rights of the employee to maintain their careers when the assets of the company are sold from administrators to a newco. These have nothing to do with the forced transfer of an employee to move over to a newco to whom an administrator has sold the assets. It only guarantees their contract if they choose to go over to the purchasing company.

What I dont see eye to eye with Mr McConville over is whether TUPE applies at all to employees that choose to move.  I would argue that players under contracts that choose not to go to a new company dont need to rely on TUPE for protection. Furthermore, there are statutory obligations that must occur when transferring employees.

The employee notification process is relatively simple. Under the Employment Act 2002 (Dispute Resolution) Regulations 2004 the transferor employer must provide the new employer with a specified set of information which will assist him to understand the rights, duties and obligations in relation to those employees who will be transferred. This is to ensure the arrival of the transferred employees is a smooth transition and the employees also gain because their new employer is made aware of his inherited obligations towards them. The information in question is:

– the identity of the employees who will transfer; – the age of those employees;

– information contained in the ‘statements of employment particulars’ for those employees;

– information relating to any collective agreements which apply to those employees;

– instances of any disciplinary action within the preceding two years taken by the transferor in respect of those employees in circumstances where the statutory dispute resolution procedures apply or from 6 April 2009 the ACAS Code of Practice on disciplinary and grievance procedures;

– instances of any grievances raised by those employees within the preceding two years in circumstances where the statutory dispute resolution procedures apply or from 6 April 2009 the Acas Code of Practice on disciplinary and grievance procedures; and

The information must be provided in writing or in other forms which are accessible to the new employer.

Mr Green should release this letter from D&P.

The Regulations place a duty on both the transferor employer and new employer to inform and consult representatives of their employees who may be affected by the transfer or measures taken in connection with the transfer. Those affected employees might include:

(a) those individuals who are to be transferred;

(b) their colleagues in the transferor employer who will not transfer but whose jobs might be affected by the transfer; or

(c) their new colleagues in employment with the new employer whose jobs might be affected by the transfer.

Long enough before a relevant transfer to enable the employer to consult with the employees’ representatives, the employer must inform the representatives:

• that the transfer is going to take place, approximately when, and why;

• the legal, economic and social implications of the transfer for the affected employees;

• whether the employer envisages taking any action (reorganisation for example) in connection with the transfer which will affect the employees, and if so, what action is envisaged;

• where the previous employer is required to give the information, he or she must disclose whether the prospective new employer envisages carrying out any action which will affect the employees, and if so, what. The new employer must give the previous employer the necessary information so that the previous employer is able to meet this requirement.

Mr Green should release the details of this notification to the players, and if the player is in the union, then their player representatives

When Mr Green has tried to do is pull a fast one. When he says, “The transfer of contracts has already happened and the club’s clear legal advice is that players’ purported objection is ineffective. Rangers would like to make it abundantly clear to players, agents and the chairmen and managers of other football clubs that we will take whatever steps necessary to challenge what we regard as a breach of contract to protect the interests of our club, ” he is saying he transferred the players over to a newco without notifying the players or the agents. As a Newco is, well,  a “newco”, then the players can choose to leave, and Sevco is without any legal authority to sue the players, the agents, or other clubs for remuneration. Those that do transfer over without notification may have a case against Green and Sevco if their contracts aren’t automatically honoured under the original terms for unfair dismissal.

In my humble opinion.

Web3dLaw

Defamation Act and Networking Filtering/Blocking

14 Jun

I have been thinking about the consequences of installing network level filtering, as TalkTalk have indicated recently they would do and  Claire Perry would like.
“TalkTalk customers get internet porn filter choice”
As I understand current UK defamation law, ISPs have an “innocent disseminator” defence provided in the Defamation Act 1996 [1].

1. (3) (e) as the operator of or provider of access to a communications system by means of which the statement is transmitted, or made available, by a person over whom he has no effective control.

[1] http://www.legislation.gov.uk/ukpga/1996/31/section/1#section-1-3

I found it extremely interesting that mobile phone companies provide over their network access “no effective control” affected by the editorial control (selective blocks, trivially administered).   TalkTalk ISP, and (by extension) all network providers according to Claire Perry’s should move toward an OPT-IN and a  suggestion of mandatory network filtering.Could it, in theory, become possible to sue an ISP for not blocking access to material originating outside of UK jurisdiction? What would happen if a court was asked to issue an injunction to filter for defamation or a privacy breach? Could TalkTalk be compelled to block material?

For section1 (secondary responsibility defence) under the Defamation Act  one needs to show reasonable care so that, in theory, the repeat defamation situation case that would not be met. For an interesting case, see the dicussion in McGrath v Dawkins [2012] EWHC B3 (QB). At present common law innocent dissemination survives –however see Metropolitan Schools.

The Ecommerce directive prevents any general obligation to monitor. See the cases of Case C-70/10 Scarlet Extended SA v Société belge des auteurs, compositeurs et éditeurs SCRL (SABAM) . There  is also a firm rule against prior restraint of defamation –so that not even the courts by court order will restrain defamation pre-publication (as opposed to privacy) –to avoid the courts acting as censor. It would be an unlawful restraint on speech/expression and so engage Art 10.

its an interesting question and I am not entirely sure what the correct answer is.Two points: (1) the High Courts power to issue an injunction is very wide Take a look at s37 of the Senior Courts Act 1981 here…(2) Secondly, however, an ISP is not themselves liable as a publisher of material which passes over their wires. The BPI thought that would mean they could not obtain an injunction under the SCA against ISP’s to block copyright content, which is why they lobbied hard for s97A of the CDPA 1988 and even then they were nervous of proceeding any further. In the event s97A has proved quite powerful enough.

As you know, there are 4 main types of case where the court will refuse an interim injunction to restrain publication. The Solicitors from Hell case was one in which Bonnard didn’t apply because the defendant did not indicate an intention to plead justification would a decision at hearing turn upon questions of the general character of the claimant, but I failed to communicate that was what I was talking about.
I suspect there’ll be an increasing opportunity for cases where neither Bonnard v Perryman nor any of the other situations (such an intention to plead honest comment or where a communication is prima facie privileged) apply. There’ll also be situations – such as election comments – where I can see people finding it attractive to obtain an injunction, but the rule against prior restraint is superseded by statute. I n those sorts of situations where a court will make an order, do will it make an order against an ISP using filtering technologies? I cannot think of any situations where that has happened or something analogous has happened?
More generally some information about orders to block directed at ISP’s outside s97A:

In modern practice the rule against prior restraint applies whenever a defendant has a defence –not just when that defence is Truth. The rule was affirmed in Green v Associated [2004]  EWCA Civ 1462.  There is also now a significant body of human rights jurisprudence to support the rule. Eady had questioned whether the rule was compatable with the new convention jurisprudence and the test for balancing Art 8 (reputation and privacy) and Art 10 (freedom of expression) which gives no precedence to either Article as applied in privacy cases (see Campbell and Re S) in Sunderland Housing v Barnes –but the rule has held except where as in the Solicitors from Hell case the defendant has evidenced an intention to repeat. The rule is good law and not under attack.

Internet Freedom is Under Attack…

13 Jun

‘Father of the Internet’ warns Web freedom is under attack

“Father of the Internet” Vint Cerf  recently warned that Internet freedom is under threat from governments around the world, including the United States.

Cerf, a computer scientist who was instrumental in the Internet’s creation and is now employed by Google as its “Internet evangelist,” said officials in the United States, United Kingdom and Europe are using intellectual property and cybersecurity issues “as an excuse for constraining what we can and can’t do on the ‘net.

“Political structures … are often scared by the possibility that the general public might figure out that they don’t want them in power,” he said.

He sounded the alarm about the International Telecommunications Union (ITU), arguing the group is poised to assume the role of global Internet cop.

Cerf said the ITU is likely to try and lock in mandatory intellectual property protections as a backdoor for easy Web surveillance. Even good-faith efforts at Internet policymaking should be viewed with skepticism, Cerf said, because balancing freedom and security “isn’t something that government alone is going to figure out.” He criticised the Cybersecurity and Intelligence Protection Act (CISPA) legislation passed by the House to encourage companies to share information about cyber threats with the government, because it lacks “adequate constraints” on how the information is used. Cerf said he has the “optimistic belief” that attempts by hostile governments to restrict access will be circumvented by resourceful engineers around the world. Cerf also urged vigilante groups such as Anonymous to stop using cyberattacks as a means of activism, saying the hackings are counterproductive.

“I don’t think lawlessness is our friend,” he said.Ultimately, there is a legitimate role for law enforcement on the Web, he said, adding that “it would be bad for us as a community to say … that all the good things outweigh the bad.” “That’s not a credible position to take,” he said. Cerf said activists and regulators alike harm themselves by using terms like “cybercrime” because they suggest that “every bad thing that happens on the Internet is a crime.” “Some are just bugs,” Cerf said, while suggesting a better goal for policymakers should be “cybersafety.”

These are my favorite lines, and are what i beleive as well.

I haven’t gotten to the point of believing that governance work is a complete waste of time yet, but have decided it is time to get my programing skills out of mothballs and get back up to speed. It is not easy talk about freedom, safety, neutrality, cybercrime, IP pirate, CISPA…with different interest… personal interest, national interest… business interest of the stakeholders …

Anything that are not following somebody interest will be bad and sometimes considered as a crime … cybercrime…

“Either you with me or against me…..” Sound familiar?  This is the challenge for the future global dialog, not as easy during the period of cerf when he started the Internet everybody has one goal.

Increasingly Governments are moving towards control of Internet Freedom. Freedom of expression, although debatable, is a fundamental right and is often the center piece of a democracy. However, Governments are sometimes preoccupied with finding ways to protect national security and human rights pertaining to Internet usage. I believe that the mechanisms for enforcement of copyright laws  or illegal content laws through DNS filtering is disproportionate and  is too restrictive. In total, DNS filtering undermines security on the Internet and may block legitimate content from the Internet. Therefore, this negatively impacts freedom of expression.

It is important to note that the blocking of domain names does not actually remove illegal content off the Internet.  As a result, there is need for various human right agencies within the government, private sector, academia and civil society to negotiate the terms and conditions for Internet Regulation.  However, I believe that these agencies should have a basic understanding of the Internet before negotiating Internet regulation. Moreover, Governments need to realize that harsh regulations of the Internet may impede innovation through various ICT tools.

Recently we have seen a few examples pertaining to Internet Freedom see below:

“Iran’s telecommunications ministry has barred local banks, insurance firms and telephone operators from using foreign-sourced emails to communicate with clients, a specialist weekly said on Saturday.  “The telecommunications minister has ordered the use of domain names ending with .ir” belonging to Iran, Asr Ertebatat reported.” See http://j.mp/KDVUWK

In addition, we see that India is pushing for the creation of a forum called ‘Committee for Internet Related Policies’ (CIRP) to develop internet policies, oversee all internet standards bodies and policy organizations, negotiate internet-related treaties and sit in judgment when internet-related disputes come up. The catch is that India’s formal proposal is for CIRP to be funded by the U.N., run by staff from the U.N.’s Conference on Trade and Development arm and report directly to the U.N. General Assembly, which means it will be entirely controlled by the U.N.’s member states. See:

http://www.thehindu.com/news/national/article3423018.ece

We can effect change let us bring these issues to the fore at the various (ICANN, IGF, WSIS, IETF etc) Internet Governance meetings.

I have posted vid of this at https://www.youtube.com/watch?v=dwtTUMXpxLk&list=PL18388B00C798AEFC

The Internet is the next stage of human evolution. We look at ourselves as separate beings but the reality is that humans are far more interconnected than a hive of bees. The Internet is our collective minds. We are externalizing our collective intelligence. It allows us to collectively comprehend the universe. And since we are the universe – we are the universe contemplating it’s own existence. And it is the Internet that creates the physical structure to allow humanity to this as one and we can contemplate what no single person could ever do.
My 2p worth.

Anonymous, Decentralised And Uncensored File-Sharing Is Booming

7 May

The file-sharing landscape is slowly adjusting in response to the continued push for more anti-piracy tools, the final Pirate Bay verdict, and the raids and arrests in the Megaupload case. Faced with uncertainty and drastic changes at file-sharing sites, many users are searching for secure, private and uncensored file-sharing clients. Despite the image its name suggests, RetroShare is one such future-proof client.

The avalanche of negative file-sharing news over the past weeks hasn’t gone unnoticed to users and site operators.

From SOPA to Megaupload, there is a growing uncertainly about the future of sharing.

While many BitTorrent sites and cyberlockers continue to operate as usual, there is a growing group of users who are expanding their horizons to see what other means of sharing are available if the worst case scenario becomes reality.

Anonymous, decentralised and uncensored are the key and most sought-after features. For some this means signing up with a VPN to make their BitTorrent sharing more private, but new clients are also generating interest.

Earlier this month we wrote about Tribler, a decentralised (not anonymous) BitTorrent client that makes torrent sites obsolete. We’ve covered Tribler for more than half a decade, but it was only after our most recent post that it really took off with more than a hundred thousand downloads in a few days.

But there are more file-sharing tools that are specifically built to withstand outside attacks. Some even add anonymity into the mix. RetroShare is such a private and uncensored file-sharing client, and the developers have also noticed a significant boom in users recently.

The RetroShare network allows people to create a private and encrypted file-sharing network. Users add friends by exchanging PGP certificates with people they trust. All the communication is encrypted using OpenSSL and files that are downloaded from strangers always go through a trusted friend.

In other words, it’s a true Darknet and virtually impossible to monitor by outsiders.

RetroShare founder DrBob told us that while the software has been around since 2006, all of a sudden there’s been a surge in downloads. “The interest in RetroShare has massively shot up over the last two months,” he said.

“In January our downloads tripled when interest in SOPA was at its peak. It more than doubled again in February, when cyberlockers disabled sharing or shut down entirely. At the moment we are getting 10 times more downloads than in December 2011.”

RetroShare’s downloads at Sourceforge.

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RetroShare’s founder believes that there is an increased need for security, privacy and freedom among file-sharers, features that are at the core of his application.

“RetroShare is about creating a private space on the Internet. A social collaboration network where you can share anything you want. A space that is free from the prying eyes of governments, corporations and advertisers. This is vitally important as our freedom on the Internet is under increasing threat,” DrBob told TorrentFreak.

“RetroShare is free from censorship: like Facebook banning ‘obscene’ breast-feeding photographs. A network that allows you to use any pseudonym, without insisting on knowing your real name. A network where you will not face the threat of jail, or being banned from entry into a country for an innocent tweet.”

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It’s impossible to accurately predict what file-sharing will look like 5 years from now. But, a safe assumption is that anonymity will play a more central role than it ever has.

Recent crackdowns have made operators of central file-sharing sites and services more cautious of copyright infringement. Some even went as far as shutting down voluntarily, like BTjunkie.

In the long run this might drive more casual downloaders to legitimate alternatives, if these are available. Those who keep on sharing could move to smaller communities, darknets and anonymous connections.

Save your Pennies and the Titles will Follow…

22 Apr

“For every fiver Celtic spend, I’ll spend a tenner” -Sir David Murray

Sir David Murray’s quote was once a bragging right for one half of Glasgow, but now serves as a taunt by the other.

It is actually a misrepresentation.

There is recent case authority in Scotland that provides guidance as to how the First Tier Tribunal may rule in the ‘big tax case’ against Rangers. HMRC has already ruled that Rangers owes the Revenue to the tune of around £24million in tax. Rangers have appealed this to the FTT. The decision is imminent.

In the case of Aberdeen Asset Management v Revenue and Customs Commissioners (1 Feb 2012), Aberdeen Asset Management had started a “discounted option scheme” to provide remuneration on top of base salary to some of its employees.  Under this “discounted option scheme”, Aberdeen Asset Management  established an offshore Employee Benefit Trust (EBT) and transferred to it a large amount of money. Furthermore, they created an Isle of Man “money box” co with a £2 share capital  for the employee and the trust subscribed for the two shares.

One share was paid for at a nominal cost, but the other at a very substantial premium which might range from about £100,000 to more than £1 million. The company’s authorised share capital was increased by £10,000 and it then granted to a family benefit trust, which had been set up for the employee, an option to subscribe for 10,000 ordinary shares in the company.

An employee participating in the scheme held the ‘beneficial interest in the ‘money box’ and was able to receive substantial cash loans at low interest rates which would not be required to be repaid.

Sound familiar?

In reality, the employee was able to receive substantial additional financial benefit. This is important because the emphasis was placed by the First Tier Tribunal after seeing evidence that the both the employee received significant financial benefit and the employer understood this to be immune for income tax and national insurance contributions.

Had the company thought the payments were not immune to NI and income tax, then every time AAM paid a cash bonus to an employee,  then National Insurance and income tax would have been owed on the identical amount. This puts the emphasis on the employers purpose in establishing the EBT.

In this case, Aberdeen Asset Management argued that the overall effect of the transaction was the receipt of shares, not money.  However, the FTT and the Upper Tier tribunal (on appeal) both ruled that the shares in the money-box company transferred to an employee were therefore a readily convertible asset, so that Aberdeen Asset Management was, for the purposes of the PAYE regulations, obligated to make payment on the amounts.

Much has been written about the Rangers players of the first decade of the second millennium participating in the EBTs. Much of what has been written as been based on whether or not the second contract existed that was hidden from the SPL/SFA.  As far the FTT is concerned, I think this is the wrong way to look at it.

As far as the FTT is concerned, the question is not whether or not the players got loans as payment under a second contract, but whether or not the EBT was setup in order to help Rangers Football Club pay those players without paying income tax or national insurance.

Let me explain.

In the Aberdeen Asset Management case, the FTT ruled there had been a composite transaction made up of  series of steps starting with  the establishment of, and transfer of money into, the EBT and ended with the transfer of the shares to employees.  The structures  simply operated to channel additional remuneration from employer to employee. The form and shape of the additional remuneration or benefit might have changed from the time it left Aberdeen Asset Management’s control to the time it came under the employee’s control but the substance of what was being provided did not.

The facts, viewed realistically, “showed unequivocally” that control was vested in the employee who had access to the pot of money contained within the corporate money box. The scheme was ruled to be nothing more than a mechanism to pay cash bonuses and that was a form of payment that the statutory provisions, construed purposively, were designed to catch.

The FTT expressly uses the term, “purposively”, which means that any court of tribunal must look at the purpose of the legislation in order to determine how any particular nuances of a case before it should be construed.

The shares were a payment which was taxable and subject to the PAYE and national insurance contributions regimes.

We must look at the Rangers case in light of this ruling.  (I use nice round figures for ease and for emphasis, not as a factual representation)

Lets say Rangers sign a player Billy Smith (fictional, of course) for a wage of £1million a year. (I like to use nice, round figures.) RFC tell Billy that he will be paid from two sources. First Billy signs a contract for £500,000. RFC, in turn, would  pay NI and income tax to HMRC at the rate of about 50% or £250,000. Billy gets about 20,833 a month deposited into his bank account monthly in take home pay.

No problem there. However, RFC then place £250,000 into a ‘money box’ in the Isle of Man or Virgin Islands. Billy can then withdraw £20K a month out of it as a loan that he never has to repay. The effect is that Rangers is then off the hook for paying £250,000 in NI and Tax.

In this scenario, Billy was able to take home a £500,000 a year wage, after tax.

Lets look at in a different way.

Lets say Celtic sign a player named Tim Smith (fictional, of course) for a £1million a year. He is paid from one source – his club’s account.  Celtic would be obligated to pay the revenue around £500K in income tax and National insurance, at roughly 50% income and NI rates.

Timmy would get about £500,000 in take home wages. Tim would still get a take home wage of about £41,666 a month.

However, in the scenarios above Celtic would have had to to pay the Revenue £500K in income tax and National Insurance. Rangers would only have to pay the Revenue £250K.

The players were not substantially better off. Rangers were.

The point I am making with this is this. The club benefited more than any of the players did. The club was saving a fiver for every fiver Celtic spent. The club could then spend this fiver on buying other players, ensuring participation in Europe, TV monies, cup runs, even 9-in-a-row.

If this is the case, and as expected the FTT rules on this matter in the coming days, the judgement will be dissected and analysed by those in the business to no end. Yet, if the ruling does go against Rangers, this will mean they were effectively able to invest in players by cheating the tax man…

If this is the case, would you agree to a CVA on PAYE and VAT for a pennies on the pound?

ICANN Warns US Not To Undermine Multistakeholder Model

19 Mar

The Internet Corporation for Assigned Names and Numbers (ICANN) has issued a new statement about a future contract with the United States for root zone management and other internet infrastructure functions, warning against undermining the multistakeholder model for governing core internet infrastructures.

ICANN statement here [pdf].

The US National Telecommunications and Information Administration (NTIA) recently added provisions to a new draft contract with the separate Internet Assigned Numbers Authority (IANA), obliging the contractor to demonstrate “explicit consensus support” for a new top-level domain (TLD) before it could be added to the root by IANA.

Some see this action by the US government as a reaction to the inclusion of the controversial .xxx to the root zone. ICANN now warned that “the IANA functions contract should not be used to rewrite the policy and implementation process adopted through the bottom-up decision-making process“.

The new consensus check as precondition for being added to the root might be an additional hurdle for new TLDs for which ICANN recently decided to open applications next year.

ICANN, a non-profit self-regulatory organisation that has been operating IANA and core policy functions for the domain name system, also commented on other terms for the future IANA contract.

In September, the US administration and the EU Commission will hold a consultation in Brussels on the future of the IANA and potential reform issues for ICANN after both administrations criticised ICANN for not fully implementing government advice in recent decisions.

Comments to NTIA’s ongoing further notice of inquiry on IANA can still be submitted until 29 July.

Federal Register notice here.

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