I wonder what will happen to the players who are STILL under contract to a club who have image rights and offshore accounts as part of their current contracts.

I think that an illeagle contract is uninforceable, so it would be null and void. Which could lead to chaos

Nothing I should think. A club can legally pay players for image rights and the gross amount is already counted on the salary cap. What all this is about is how much tax and N.I. is paid.

The player will simply be worse off as he must pay more tax and NI. The club will will also be worse off as they will have to pay more N.I. than it expected but it won't count on the salary cap because N.I. was removed from counting toward it a short while back.

Dave

I don't understand this point, particularly with reference to Wigan.

Wigan obviously want(ed) to spend more than the cap - why didn't you just use the NI dodge and put aside an equivalent amount in case HMRC came knocking? What difference does it make?

Wigan didn't spend more than the Cap! They broke the "Spirit of the Cap!".
Which in other words was we paid the players exactly the right amount in their wage packets to keep us under the cap but some of what they were due was deferred until the following year (Common practice in Aus I believe??) when they would be given a larger contract than they would have got normally.
As for your intent on implying wigan Want to spend more on the cap can you show me any evidence of this over the last 3 years considering our fine/points deduction (that IMHO shouldn't have applied either) was for 2006!

To get to the crux of your point!
I am Led to believe it was becuase the Employers (Whelan) felt that he may become accountable for the amount under paid retrospectively and he wouldn't do it!

So just put an equivalent amount aside at the time, what's the difference to a man & club who have lobbied for the cap to be raised in the past?

So like deferring payments then?

No, nothing like it.

Nothing is being deferred, you're just providing for a contingent liability. Difference being that you're likely not to have to pay it unless there is a retrospectively applied change in tax legislation, whereas deferred players' wages you most certainly would.

No its much worse it defrauding the tax man and some have ended up in prison for that.

Because he wanted to pay the players "X" Amount and that kept them under the Cap!

If he paid them "X+20%" via the Offshore method and then the Goverment came for that 20% He himself would have been liable for that amount not tha players!

You keep falling foul of the same old argument that we "Broke" the salary cap, we didn't.
"IF" Whelan wanted to pay the players more to get the Big stars here and "Break" the cap he could have done, he didn't!
He wanted to stay within the cap However the way he chose to do this was deemed against the "SPIRIT" and we got fined & Points deducted!
The way 10 other clubs have done it wasn't classed as against the "Spirit" but in my opinion was far more against the "SPIRIT" as Saints/Leeds for example won many trophies on the back of their players earning More than other clubs did, FACT!

Wigan paid their players for years 2006/2007/2008 exactly what they should have been and under/on par with the Salary Cap 1.6m. Other clubs didnt.
I know which one in the long run was more against the "Spirit"!

I'm not sure you understand what the word loophole means.

My point has nothing whatsoever to do with Wigan having ever broken the cap, but nice rant.

And if you do have to pay it are you going to accept that your players got paid more than Wigan players in 2005/2006/2007/2008?
Do you not accept that this should be classed as against the "Spirit of the Cap"????
Should SL Titles & CC be decided by who has the most creative accountant????

Just accept that not everything your club does is perfect & what we do is Bad!

So what has it to do with then????

You paid your players a certain way which meant you were able to roughly pay your players 15/20% more than what we could????

Please don't make it sound excusable because we all could have gotten away with it!
Whelan chose not to use the LoopHole and in hindsight seems to be right is doing so.

If both sides were spending up to the cap, the gross salary bill will have been exactly the same. The only difference will be in National Insurance deductions/contributions made.

If a retrospective change is made, we'll have to pay the bill, sure. But it was not contrary to any legislation at the time of payment and the RFL were aware of the practice and deemed that it was not contrary to the cap.

Setting aside payment for a future tax liability? If you don't expect to pay it some time in the future why would you set it aside? Hence why the clubs that have been daft enough to use this method have not done so and will end up neck deep in cack. If they had the space on the cap to 'provide for a contingent liability' they wouldn't have needed the loophole in the first place. The whole reason the schemes have been used is to exceed the cap limit.

Neither was deferring payments.

It's not a matter of "getting away" with anything, it was not contrary to any legislation and was deemed by the RFL to be OK under the SC.

If Whelan didn't want to take advantage of some tax planning to maximise the value in his player's contracts (and put aside some cash in case the law changed seeing as though he's lobbied for a raising of the cap anyway so the money shouldn't be a problem) then that's his and Wigan's issue.

Bearing in mind the RFL were aware of the practice and deemed it OK as far as the cap is concerned, the whole reason was to maximise players' net salaries under the cap, not exceed the cap limit.

The point being you can only work under the prevailing tax laws at the time. If something changes retrospectively, then so be it - you might have a bill to pay but it matters not as far as the cap is concerned since the RFL OK'd it at the time.

As we are well aware, it is not the tax laws, but the RFL's application of the cap and not neccessarily the rules, possibly the 'spirit' of them that is the problem. As the cap at the time was ruled retrospectively as opposed to the way it operates now, and given the RFL's liking for making things up to suit their arbitrary sense of justice, I would be certain of nothing.

If you cannot see the inherent differences between:

1) a contingent tax liability, arising from a practice OK'd by the RFL cap auditors at the time, that may not even arise unless the law is changed, and
2) not paying players' wages in the period they were earned so you can sign more players, a practice not OK'd by the RFL cap auditors

then I may be wasting my breath here.

That I wouldn't argue with.

You are right, you don't under the point because its a general point not one to do with Wigan alone. There were 4 clubs, Wigan being one who believed this N.I. dodge top be illegal so chose to take the advice of their lawyers. At the time DW complained other clubs were not following suit and the RFL ignored it or rather said "on your own head be it".

The point is there was conflicting advice given to clubs about the tax liability of the image rights payments.

Therefore the RFL were fully aware some clubs were taking advantage of this and others were not. I know this for a fact by the way.

So they knew some clubs were spending more than others in effect making the salary cap go further thus we did not have level playing field.

What is also true is the RFL's own rules state that while the tax law is as it is, that does not mean clubs can use it to defeat the purpose of the cap.

Therefore it seems extremely odd when faced a situation where some clubs were taking advantage and others were not that the RFL did not rule against using this particular tax dodge. That was the point I was making.

Suggesting all clubs should have taken advantage is ridiculous because that would have meant the directors of those clubs would have been acting against the legal advice of the clubs lawyers which would leave them open to all sorts of not very nice consequences.

Dave

I have little doubt some tax advisers will have warned of the possibility of a retrospective tax bill. But the only thing clubs would be leaving themselves open to is an increased tax bill. It would appear most clubs were happy to (potentially) pay a bit more tax to get the best side out on the pitch under the cap rules.

The only reason I'm relating it to Wigan is that Wigan is a club that has in the past publicly declared it's desire to incease it's spending on the squad, so you would think that the worst case scenario of paying a bit more tax wouldn't bother them at all if it helped improve their squad.

You're wasting your breathe to an extent anyway as you've clearly decided to defend a situation of which you know few facts or figures and most likely the specific rulings in question. What you're overlooking in your haste to project a superior knowledge of tax planning is that neither of the situations were specifically included in the original cap ruling (which incidentally is policed separately to IR tax regulation). That one has been and the second may be adjudged to be a breach of the cap retrospectively is the case whether you'd like it to be or not.