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

Saints made the gross payments to players they were supposed to based on the contracts signed. Wigan didn't.

At the time Wigan signed Fielden they told the RFL they would pay his wages by getting rid of players. Instead, they messed around with contracts and assembled a squad whose gross wage bill was higher than the salary cap, they just decided to not pay some of it for a while.

Saints' gross contracted wage bill was under the cap, Wigan's wasn't. I still think they'd have got away with it had they not bent the truth about what they planned to do when they signed SF.

So if they didn't pay it the wages werent over the cap then?????

Awaits DaveO response as well!

OK, so Saints are about to lose a couple of big earners in Long and KC but we fancy winning the lot this year while they're still around so spend £200k over the cap to sign say Shenton and Fox, but have a word with the rest of the squad about "deferring" their wages to make up for it. We win the cup and league.

Then, next year, we defer £150k with different players. Then £100k the season after. Then £50k. Then do it all again and spend more than everyone else to win trophies.

Sounds good doesn't it! Thankfully, the RFL think that's a farcical situation to allow.

Indeed.

Of course the same people arguing what Wigan did was ok wouldn't bust a blood vessel about Stains doing the same in your scenario. Oh no.

According to todays League Express Warrington are being chased by HMRC for a six figure sum by HMRC.

Two other clubs are also thought to have been in negotiations with HMRC over the same issue.

No they didn't. Wigan did not pay out wages more than the salary cap. The gave several players new contracts and under those contracts "made the gross payments to players they were supposed to based on the contracts signed".

This was not illegal and not against any written rule in the salary cap regulations.

Those rules have now been changed (not surprisingly) to state if a player has any element of their wages deferred the full amount counts on the cap in the current salary cap year (I am paraphrasing but that is the gist of it). These rules did not exist when Wigan deferred wages.



The total amount Wigan paid out was [uunder the cap limit[/u. Didn't Saints pay out more than the cap limit that year by a small amount and get fined or was that another season?

There was a lot of fuss kicked up by the Cas chairmen, the press was all over it and it was a high profile episode and IMO that is why Wigan didn't get away with it. The RFL went looking for a way to make this against the rules and so used the spirit of the cap thing. I think it is interesting the rules have now been changed. In theory they did not need to given the RFL did Wigan anyway.

The practice of deferring wages as Wigan did is not uncommon in the NRL. Over there they adopt a very simple approach - if the player isn't paid the money in a salary cap year it does not count on the salary cap. Seems like common sense to me!

Dave

www.guardian.co.uk/sport/2009/ap ... e-payments They refused to be tempted and it looks like this is now vindicated.

www.guardian.co.uk/sport/2009/ap ... e-payments They refused to be tempted and it looks like this is now vindicated.

And this thread's now gone full circle

You know it's ludicrous really.

What we did was not ilegal in any employment sense, and didn't even break the rules of the salary cap. So the HRMC are going to apply this retrospectively, are the RFL going to audit retrospectively?

If not, fines for them all and points deductions this year! Cos if we broke the "spirit" of the cap, then so bloody well did they.

I think its safe to argue that this wont happen as at the time what the clubs did was use a loophole in the tax laws there is nothing illegal about this but if the revenue applies this we are most likely saying that leeds and st helens won all their trophies in the last 3 years over the salary cap

There is no doubt this practice was questionable hence wigans getting legal advise not do it

Whats more interesting for me is the clubs that currently have players on these types of contracts and they now have to pay tax on that money they will be over the cap this year unless they offload players..