The Crown Prosecution Service (CPS) has been forced to fire sole practitioners working as its agents after Revenue & Customs claimed they were effectively employees and sent it a multi-million pound bill for tax and national insurance.

The CPS has denied that the sole practitioners are staff, but appears to have axed them in case the Revenue succeeds with its demand.

In letters sent out to sole practitioners at the end of January, the CPS blamed the move on a 2002/03 ?national PAYE audit inspection? by the Revenue which meant that ?with immediate effect, all lawyer agents engaged by the CPS must be attached to a firm of solicitors or chambers?. The Revenue is understood to have asked for around ?4 million.

One solicitor told the Gazette that the decision had cost him around ?2,000 a month ? his only source of income.

Harvey Blenkin, a Warrington-based solicitor and ex-CPS prosecutor, said: ?I see this as an unwarranted interference in my profession, and with my human rights.?

Rodney Warren, director of the Criminal Law Solicitors Association, also criticised the decision, and questioned why self-employed solicitors had been targeted when barristers appear to have escaped the axe.

He said: ?It is an issue which must cause the CPS considerable concern [being leant on by the Revenue]. But it seems to me that a barrister working on his own would still be in chambers, just the same as a solicitor working on his own would still be working in a firm. This is clearly [something] that needs to be resolved quickly.?

The CPS said it is contesting the whole amount levied by the Revenue for 2002/03 in respect of sole practitioner agents, and insisted it is not making a distinction between solicitors and barristers.

A CPS spokeswoman said: ?The Revenue have informed us that although individual lawyers may consider themselves to be self-employed, unless they operate through an incorporated business or chambers, the work that they are required to undertake is not compatible with self-employed status.

?It is the Revenue who are of the view that the sole practitioners are CPS employees for tax purposes.?

The Law Society has written to the CPS this week demanding ?a full explanation? for its decision. It pointed out that ?the concept of an ?incorporated? business does not generally apply in the context of legal practice, as firms mostly operate as partnerships in which all of the partners are self-employed?.

A Revenue spokesman said a right of appeal to the independent Appeal Commissioners existed in the event of a disagreement with its opinion.

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