Memorandum: Crown Prosecution Service accused of failing to tighten working rules

Sole practitioners acting for the Crown Prosecution Service (CPS) were fired because it failed to tighten agents? working rules, despite being warned several years ago by Revenue & Customs, the Gazette has learned.

According to a memorandum issued to its 42 areas, which has been passed to the Gazette, the CPS is incurring daily interest on a ?4 million charge the Revenue has issued.

When the CPS was revealed to be firing sole practitioner solicitors who act as its prosecuting agents two weeks ago, it said it was contesting the tax charge and that it was the Revenue?s opinion that sole practitioners are ?employed? by the CPS (see [2005] Gazette, 9 February, 1).

But the memorandum reveals that, though the CPS had been told by the Revenue after its 1997/98 tax audit to remove those agents working mainly or only for the service, the CPS areas failed to do this. Once the Revenue discovered this, it threatened the service with a tax bill backdated to 1999.

Originally, the Revenue asked the CPS to ensure that no solicitor agents were getting most or all of their income from the service, especially those who had been employed by it before. Many agents have contacted the Gazette to say they had proved this status with the CPS, and are now are suffering for its failure to weed out those agents who cannot.

The CPS has also been attacked for failing to distinguish between sole practitioners and solicitors attached to a solicitors? chambers. One solicitor attached to such a chambers slammed the firings as a knee-jerk reaction. ?My view is those sole practitioners who are legitimately Schedule D (self-employed) are paying the price for the CPS?s failure to do what it had to because of the previous audit,? he said.

However, the CPS said that the Revenue is only allowing it to use lawyers ?attached to an incorporated business? or barristers? chambers.

In a statement, the CPS said: ?It is [the Revenue?s] view that it is the nature of the work the agents are required to undertake while engaged by the CPS which is not compatible with self-employed status, rather than the proportion of time spent working on CPS work.?

The Revenue has refused to comment directly on the issue.

The CPS is understood to have asked the Revenue for a meeting, but has not yet received a reply.