This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/law/2015/oct/22/tax-levy-on-wealthiest-law-firms-nonsensical-says-law-society

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Tax levy on wealthiest law firms nonsensical, says Law Society Tax levy on wealthiest law firms nonsensical, says Law Society
(about 1 hour later)
Lawyers have dismissed as nonsensical a proposal by the Ministry of Justice to impose a tax on the UK’s wealthiest law firms. The tax is intended to replace a charge on guilty defendants which has been widely condemned for undermining the justice system. Lawyers have dismissed as nonsensical a proposal by the Ministry of Justice to impose a tax on the UK’s wealthiest law firms. The tax is intended to replace a charge on guilty defendants that has been widely condemned for undermining the justice system.
“This is simply a tax on success,” said Jonathan Smithers, president of the Law Society. “Singling out the legal profession to pay a levy on top of the tax they pay as businesses could damage the legal sector’s competitiveness and thereby its international standing as the jurisdiction of choice.”“This is simply a tax on success,” said Jonathan Smithers, president of the Law Society. “Singling out the legal profession to pay a levy on top of the tax they pay as businesses could damage the legal sector’s competitiveness and thereby its international standing as the jurisdiction of choice.”
The scheme said to be under consideration by the justice secretary, Michael Gove, would involve a compulsory charge on the most successful law firms, the Times reported. It said a 1% levy on the turnover of the top 100 corporate firms, which exceeds £19bn, would raise £190m, twice what Chris Grayling, Gove’s predecessor, hoped to raise from the charge on guilty defendants that came into force in April. The scheme said to be under consideration by the justice secretary, Michael Gove, would involve a compulsory charge on the most successful law firms, the Times reported. It said a 1% levy on the turnover of the top 100 corporate firms, which exceeds £19bn, would raise £190m, twice what Chris Grayling, Gove’s predecessor, hoped to raise from the charge on guilty defendants that came into force in April. The current charge requires those who plead guilty in a magistrates court to pay £150, but if they fight the case and are eventually convicted in a crown court, they have to hand over £1,200.
The current charge requires those who plead guilty in a magistrates court to pay £150, but if they fight the case and are eventually convicted in a crown court, they have to hand over £1,200.
Gove is said to dislike the charge, but has to come up with an alternative to satisfy the Treasury. The justice secretary has already said those firms that have reaped the biggest rewards from the legal system should invest to help protect access to justice.Gove is said to dislike the charge, but has to come up with an alternative to satisfy the Treasury. The justice secretary has already said those firms that have reaped the biggest rewards from the legal system should invest to help protect access to justice.
In a speech in June, Gove signalled that he would put pressure on successful law firms to do more to support the justice system. In a speech in June, Gove signalled that he would put pressure on successful law firms to do more to support the justice system. “The belief in the rule of law, and the commitment to its traditions, which enables this country to succeed so handsomely in providing legal services, is rooted in a fundamental commitment to equality for all before the law,” said Gove. “So those who have benefited financially from our legal culture need to invest in its roots. That is why I believe that more could – and should – be done by the most successful in the legal profession to help protect access to justice for all.”
“The belief in the rule of law, and the commitment to its traditions, which enables this country to succeed so handsomely in providing legal services, is rooted in a fundamental commitment to equality for all before the law,” said Gove. “So those who have benefited financially from our legal culture need to invest in its roots. That is why I believe that more could – and should – be done by the most successful in the legal profession to help protect access to justice for all.” The MoJ has defended the current charging regime, saying that convicted adult offenders should pay towards the cost of running the courts. Civil liberty groups, however, say the steep rise encourages defendants to plead guilty rather than risk larger costs.
The MoJ has defended the current charging regime, saying convicted adult offenders should pay towards the cost of running the courts. Civil liberty groups, however, say the steep rise encourages defendants to plead guilty rather than risk far larger costs. More than 50 magistrates in England and Wales have already resigned in protest at the charge, according to the Magistrates’ Association. Many doubt whether much of the debt will be collected, as a significant number of defendants are too poor to pay.
More than 50 magistrates in England and Wales have already resigned in protest at the charge, according to the Magistrates Association. Many doubt whether much of the debt will be collected as a significant number of defendants are too poor to pay.
The deputy president of the supreme court, Lady Hale, this week became the latest judge to question whether the charge encourages defendants to plead guilty. The lord chief justice, Lord Thomas, said steep rises in criminal and civil court fees were putting access to justice beyond the reach of most people and “imperilling a core principle of Magna Carta”.The deputy president of the supreme court, Lady Hale, this week became the latest judge to question whether the charge encourages defendants to plead guilty. The lord chief justice, Lord Thomas, said steep rises in criminal and civil court fees were putting access to justice beyond the reach of most people and “imperilling a core principle of Magna Carta”.
Unpopular as the charge is, Smithers asserted that the option of an additional tax on successful law firms was not the answer and warned that firms may relocate. Unpopular as the charge is, Smithers asserted that the option of an additional tax on successful law firms was not the answer and warned that firms might relocate. “An additional tax on solicitors may prompt firms to consider whether to continue to operate out of England and Wales, which may have an impact on the wider UK economy,” he said. “The government’s policy on the criminal courts charge is failing as it attempts to charge the poorest and often most vulnerable people in our society amounts which they cannot afford to pay. Therefore, to suggest monies generated by a levy will merely replace monies which would have been generated by the criminal courts charge, is nonsensical.”
“An additional tax on solicitors may prompt firms to consider whether to continue to operate out of England and Wales, which may have an impact on the wider UK economy,” he said. “The government’s policy on the criminal courts charge is failing as it attempts to charge the poorest and often most vulnerable people in our society amounts which they cannot afford to pay. Therefore, to suggest monies generated by a levy will merely replace monies which would have been generated by the criminal courts charge, is nonsensical.”
An MoJ spokesman said: “Resources are rationed at one end while there are huge rewards at the other. Those who have benefited financially need to do more to protect access to justice for all and we are discussing with the profession how this can be taken forward.”An MoJ spokesman said: “Resources are rationed at one end while there are huge rewards at the other. Those who have benefited financially need to do more to protect access to justice for all and we are discussing with the profession how this can be taken forward.”