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.

And now DaveO is here I'll go and make a brew

That's why I stopped!

There isn't a snowball's chance in hell of the RFL declaring retrospective cap breaches over this issue. They have been fully aware that the majotiry of clubs have been using this "loophole" and have not objected to it.

Seriously, I'm glad you're confident.

Now break out the Pro+ - you're in for a long afternoon

Nope, I'm legging it!!

They were also aware of Wigans retrospective payments, but it didn't stop their "spirit of the cap" ruling.

I may be wrong but was there a big fuss at saints because when albert returned home his money wasnt in the bank

No they weren't.

They only got to know about them during the then normal cap audit procedure.

The RFL salary cap auditors did not OK this practice. All they do is audit the clubs accounts against the rules. The gross amount paid to a player was always taken into account on the salary cap.

It also used to be the situation that a clubs N.I. payments counted on the cap as well. So by doing this dodge clubs reduced their N.I. bill and when it came time to tot up the figures all the salary cap auditors would do is add the total N.I. paid by the club to all the other amounts and check if it was under the cap.

Now the question is, given they invoked the "spirit of the cap" "rule" against Wigan why did they not do so over this tax dodge given DW complained about it? The only reason they looked at the deferred wages was the fuss kicked up by Cas and others. Especially when the RFL's own rules basically say whatever the tax laws are you can't use them to defeat the purposes of the cap one of which is a level playing field !!!!



Both practices are not illegal so it boils down to a subjective judgement as to what is and what isn't in the spirit of the cap.

What Wigan did was defer wages so they did not break the cap.

What clubs doing the tax dodge did was take advantage of a loophole to pay out more money than they could have done to players without adopting this practice (because part of the money was not liable for N.I. which had the club had to pay it would have taken them over the cap).

Dave

No they didnt, the club got in touch with the league to tell them about it, and the fact the seu seu had retired

I assume because whether it is even a "dodge" or not depends on tax legislation - and the prevailing tax legislation at the time suggested it was OK (despite concerns that this may change in the future) so how can it be classed as against the spirit of the cap?

There are lots of ways for everybody to minimise the tax they pay. I doubt the RFL want to prescribe how clubs and players look to minimise their own tax burdens, as shown by the ditching of the NI cap element for a gross cap.

As far as I remember Wigan said they were going to ship out players to free up cap space, rather than defer payments.

Could be wrong though.

As I said, no they didn't tell the RFL about the deferred payments as they knew what it would have meant.



The RFL also made a statement along the lines that they had been assured by Mo that players were moving to allow the deal to happen.

Deferring wages is not illegal either so by the same token, how could that be against the spirit of the cap?

Answer: because someone made a subjective judgement.

The legality or otherwise of both the tax dodge and deferring wages does not come into it because both practices were legal in law at the time.



Irrelevant and indeed against the rules which state despite tax legislation being what it is you can't use it to defeat the purpose of the cap, so they do take an interest.

What the clubs did was make their gross payments go further as by adopting this practice they reduced their NI payments which at the time did count on the cap. So therefore they gained an advantage by doing this. Wigan gained an advantage by deferring wages.

It all boils down to the RFL salary cap auditors taking a different view on two perfectly legal (at the time) practices both that got around restrictions of the cap.

Dave