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..

I think the RFL changed the rules, and removed NI contributions when they lowered the cap to £1.6M (but awaits daveo)

i spoke 3 years ago to a leading figure at wigan rugby league club about this subject.obviously wigan were aware of what was happening with other clubs,but wigan could not use the same loophole,something to do with whelan being a ltd company,and through that had to be sqeaky clean in this matter.that is why when wigan broke the salary cap everyone knew about it.

I don't think there will be a retrospective punishment either but yes it's plain they won their trophies when they should have been paying more N.I. contributions than they did so would have been over the cap. I am sure Saints went over it anyway getting small fines so this could well have taken them into points deduction territory.

It's not as if there were no question marks over this practice but really what I want to know is why tax avoidence is not against "the spirit of the cap".



No they won't as was mentioned when the cap went down to £1.6m N.I. came off the cap. What would happen is any clubs doing it would have to pay more N.I. that is all.

The reason it went down to £1.6m is that the difference between that figure and the old higher cap rate is supposed to be how much N.I. you would be paying on the wages (of £1.6m). So in effect the RFL is expecting clubs to have to pay N.I. on the full £1.6m.

So if clubs are not doing so then they have a better chance of being able to pay up the cap limit and/or can spend the saved contributions elsewhere so again why is this "not in the spirit of the cap"?

Dave

Question DaveO

Given the Info we have currently about Offshore Accounts etc How much Per season dis this Loophole save each club?????

If the cap was 1.85m (I think it was the original figure?) and then reduced to 1.6 minus N.I contributions the starting figure would be around 250k????

However if (As You know I aint no salary cap expert) The club/player did pay "Some" contributions but at a lower rate is it possible to work out How much they would have in theory gone over????

PS

Do you not think as some kind of recompence the "Spirit of the Cap" Breakers should have to pay this money and it be counted on the Cap for the Next 3/4/5 years for the amount they underpaid for those 3/4/5 years???

Just read this thread!







Spirit of the Cap? The SC is a farce. The hypocrisy of its supporters is absolutely hilarious.

The only fair thing to do would be to impose massive points deductions on those clubs that have utilised this aggressive tax planning scheme - they knew the risks and gained an unfair advantage (how "level" was the playing field!!



).

We should all bombard the RL with emails demanding action, but we all know they won't do anything...

What a joke the SC is. The only bigger joke are the people that try to defend it as being "fair".

does anyone have any info other than what Dodgy Dave said, to backup the "facts" that Wigan didnt utilise these schemes?

Catalans, Celtic and Salford are 3 of the 4 - how certain are you that Wigan are the 4th?

It started at £1.8m then went down to £1.7m. It was then supposed to go up with inflation each year but this was only applied once for various reasons I can't remember. It may have been £1.75 before going down to £1.6m.

Whatever it was the amount of back N.I. owed would be the employers contribution and that has changed over the years but is something like 9 or 10 percent I think. £1.6m x 9% = just shy of £1.75m. So its more like £150K a season for however many seasons the clubs did this. No wonder Wire needed the money for Gleeson!



They will have paid N.I on their UK wages and not the image rights payments. So it depends how the players salaries were structured as to how much they got away with. It could even be more than £150K a season if a club had a lot of Kolpak players on this type of deal.



The RFL do apportion some things over future years. For example if you pay a player off who has two years left to run on his contract and give him £20K then that counts as £10K per season on your cap for two seasons. The point being the RFL will load a clubs salary cap liability for future years.

So they could do as you suggest by dividing the total amount owed to the I.R. by 3/4/5 years and spreading it over 3/4/5 years as a liability on the clubs caps.

Of course that assumes they won't just brush it under the carpet which is what I expect to happen.

Dave

My clear understanding (from within the club) is that Millward outlined this scheme to Whelan who said an emphatic NO, since it would probably come back to bite the club in the future.

Celtic didn't exist when this was being done! The 4 clubs in question are those around at the time this was being done and they were SL clubs.

Dave

The really needs to hit the fan over this big time!

One reason that makes me comfident were not one..is we just spent 100k on a player. doubt we would have if we were expecting a big tax bill

There's never been any doubt that Wigan have not used the image rights & employer benefit trusts under Whelan's ownership.
I've been at separate meetings where this has been said.
The people who've announced this have always maintained that if used extensively these financial methods could allow a club 3-4 more players under the cap than a club would have who didn't use these mechanisms.
I would imagine that in the fullnes of time the names will come out for those under investigation and the clubs that are not.

I wonder if it has changed under the new regime at Wigan, given that Tommy had an "image rites" contract at Quins.

the Guardian article clearly says that 10 of the 14 SL teams are implicated. therefore 4 teams are not - of which Celtic are 1, because as you say, they didnt exist.

And the Guardian have got all the facts correct have they?
IL has never mentioned EBT's or IR details.
Given that he's only been in charge 16 months even if he has we won't be that exposed to a tax bill.
Unlike perhaps some clubs where they may be looking at 6 years back payments.