Income from HMCTS County Court fees (2014-), and is UK tax paid on this income (if not, why not)

Indigo made this Freedom of Information request to Her Majesty's Treasury

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Dear Her Majesty’s Treasury,

I should be grateful for any information on

1. what was the HM Courts & Tribunals Service (HMCTS) gross income from County Court fees, in the three years 2014-2015 and 2015-2016 and 2016-2017 and the first two quarters of the year 2017-2018;

2. at which % rate does HMCTS pay UK tax on this income from County Court fees;

3. if HMCTS did not pay UK tax on its income from County Court fees (received by any means, such as cheque, cash or direct bank transfers), why not: eg if that income is paid directly to an offshore bank account?**

4. if HMCTS did not pay UK tax on its income from County Court fees, why did HM Treasury think we - we being the people who need an army, a navy, a coastguard, well-maintained roads, a health service, police and security services, and a state-of-the-art justice system - could manage without this tax income to the public sector?

** Perhaps for reasons similar to those in these instances (all to enable UK public/national authorities to avoid UK tax): in 2016, it was reported that (in 2013) HM Treasury/HMRC head office was leased from CIHL Holdings Limited, in Jersey; and that HMRC's 600 tax offices were 100% owned by to Mapeley Steps Limited, in Bermuda; and the Home Office HQ was 100% owned by HICL Infrastructure, in Guernsey).

I believe that these payments for services like this - county court fees - are not liable for VAT and I am not asking for information about VAT.

Thank you.

Yours faithfully
Rachel Mawhood

FOI Requests, Her Majesty's Treasury

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Dear Rachel Mawhood,

Thank you for your Freedom of Information request. I write to confirm receipt of your request and to let you know that it is receiving attention. If you have any enquiries regarding your request do not hesitate to contact us.

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FOI Requests, Her Majesty's Treasury

1 Attachment

Dear Ms Mawhood

 

Please find attached HM Treasury’s response to your information request.

 

To be helpful, I have copied below the link to published information cited
in the response.

 

[1]https://www.gov.uk/government/publicatio...

 

Yours sincerely

 

 

Information Rights Unit | Correspondence and Information Rights Team |
Corporate Centre Group | Floor 3 Red / Yellow | HM Treasury, 1 Horse
Guards Road, London, SW1A 2HQ 

 

www.gov.uk/hm-treasury 

 

 

 

From: Indigo [[2]mailto:[FOI #447236 email]]

Sent: 17 November 2017 14:19

To: FOI Requests <[3][email address]>

Subject: Freedom of Information request - Income from HMCTS County Court
fees (2014-), and is UK tax paid on this income (if not, why not)

 

Dear Her Majesty’s Treasury,

 

I should be grateful for any information on

 

1.  what was the HM Courts & Tribunals Service (HMCTS) gross income from
County Court fees, in the three years 2014-2015 and 2015-2016 and
2016-2017 and the first two quarters of the year 2017-2018;

 

2.  at which % rate does HMCTS pay UK tax on this income from County Court
fees;

 

3.  if HMCTS did not pay UK tax on its income from County Court fees
(received by any means, such as cheque, cash or direct bank transfers),
why not: eg if that income is paid directly to an offshore bank account?**

 

4.  if HMCTS did not pay UK tax on its income from County Court fees, why
did HM Treasury think we - we being the people who need an army, a navy, a
coastguard, well-maintained roads, a health service, police and security
services, and a state-of-the-art justice system - could manage without
this tax income to the public sector?

 

** Perhaps for reasons similar to those in these instances (all to enable
UK public/national authorities to avoid UK tax): in 2016, it was reported
that (in 2013) HM Treasury/HMRC head office was leased from CIHL Holdings
Limited, in Jersey; and that HMRC's 600 tax offices were 100% owned by to
Mapeley Steps Limited, in Bermuda; and the Home Office HQ was 100% owned
by HICL Infrastructure, in Guernsey).

 

I believe that these payments for services like this - county court fees -
are not liable for VAT and I am not asking for information about VAT.

 

Thank you.

 

Yours faithfully

Rachel Mawhood

 

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Information Rights Unit
Correspondence and Information Rights Team
Corporate Centre Group | Floor 3 Red / Yellow
HM Treasury
1 Horse Guards Road
London
SW1A 2HQ

Dear Sir/Madam

[Case 111/63 Lemmerz-Werke v High Authority of the ECSC [1965] ECR 677] of the Court of Justice
of the European Union (CJEU)
Human Rights Act 1998
English contract law

Thank you for your response. I do have three queries that arise from your letter:

(a) why isn't HM Treasury taxing profits manufactured by-legitimate-expectation-abuse on the part of HMCTS officers?

(b) why isn't this, manufacturing a profit by not providing the service paid for, defined as money-laundering by HMCTS?

(c) why is HM Treasury naively conniving at this behaviour by HMCTS?

In your letter, you say

"HMCTS does not pay tax on the income from County Court Fees. As HMCTS County Court Fees are designed to recover the full cost of providing services, the organisation has no taxable profit and thefore pays no corporation tax. Whilst non-departmental public bodies can be subject to taxation depending on the circumstances of their corporate structure and financing, such taxation would be charged on taxable profits, not gross income."

1.
If HMCTS did in fact provide the service the cost of which the County Court fee is "designed" to recover, I would be content. But I can provide recent documentary evidence - including a written admission from HMCTS dated a couple of months ago - that, because of legitimate expectation abuse by HMCTS, all the unrepresented Defendant's County Court fees to date (£780) in the proceedings B4PP8642 (2015-ongoing) are pure profit for HMCTS.

2.
HMCTS County Court fees are advertised (document EX50). That is a precise assurance (ie pay this fee, and your application/claim will be processed). If one tries to make an Application, Claim, etc, without paying the court fee up-front, the Application will be returned. Nowhere does HMCTS say (and the unrepresented Defendant could not possibly have foreseen) that the County Court can unilaterally, after it has banked the court fee, decide not to provide at all the service paid for. Nowhere does HMCTS say publicly that, after the court fee is banked, the corporate Claimant - and not a judge (ie not an officer of the court) - gets to decide whether or not the unrepresented Defendant's counter-claim or defence shall be issued at all by the court. As happened in B4PP8642 (and has been admitted in letter to me from HMCTS).

3.
In the proceedings B4PP8642, the Claimant - and not an officer of the court - got to decide whether or not the Defendant (who paid exactly the same court fees, not a cheaper tariff, as the Claimant) would be allowed a fair hearing. CAN YOU SEE WHAT IS WRONG WITH THAT?

4.
Why isn't this actually defined as money-laundering by HMCTS? Any other organisation that took money for a service but did not provide the service at all would be in breach of the laws of contract of England and Wales and committing fraud but, in doing this, HMCTS is also violating the Human Rights Act 1998, undermining the administration of justice and failing to protect the rule of law. I do not see why HMCTS should get away with this - ie get away with not providing the service and not paying tax on the pure profit generated by not providing the service paid for - and breaking UK/EU laws with impunity.

5.
The principle of protection of legitimate expectations has been recognised since early case law [Case 111/63 Lemmerz-Werke v High Authority of the ECSC [1965] ECR 677] of the Court of Justice of the European Union (CJEU) as a sub-principle of the rule of law. Actions of public bodies shall not interfere with vested rights. The principle of legal certainty and legitimate expectations is developed in the case law by the CJEU under the power of the judicial review of EU acts.The right to rely on the principle of the protection of legitimate expectations extends to any person in a situation in which an institution of the European Union has caused him/her to entertain justified expectations.

6.
A procedural legitimate expectation is created when a representation is made by a public authority that it will follow a certain procedure before making a decision on the substantive merits of a particular case. Examples of procedural legitimate expectations include an expectation to be consulted and to a fair hearing (see also Human Rights Act 1998). HMCTS has spectacularly failed to do this in the proceedings B4PP8642. And I feel sure this is not the only case in which this has happened. The administration of justice and a citizen's rights to a fair hearing are not to be sacrificedto cost-cutting in HMCTS.

7.
The "exchange agreement" is exactly the same, whether between HMCTS and a corporate Claimant or between HMCTS and an unrepresented Defendant. In taking County Court fees and then neither providing the service nor paying tax on the pure profit thus "manufactured", HMCTS is breaking UK and EU law. HM Treasury should not connive at this. I humbly suggest that HM Treasury taxes HMCTS on all the County Court fees income received where the service (for which the fee is meant to be the cost of providing it) is not provided at all. HMCTS does have a mechanism for generating the necessary data, the Ministry of Justice Caseman system

https://www.whatdotheyknow.com/request/m...

Statement of truth. I believe that the facts stated by me in this message to HM Treasury are true.

Yours faithfully
Rachel Mawhood

FOI Requests, Her Majesty's Treasury

Thank you for your email.  This is an automatic acknowledgement to confirm
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Please note that this mailbox is only for requests made under the Freedom
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This email and any files transmitted with it are intended solely for the
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References

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1. mailto:[email address]

FOI Requests, Her Majesty's Treasury

Dear Ms Mawhood,
Thank you for your Freedom of Information request. I write to confirm receipt of your request and to let you know that it is receiving attention. If you have any enquiries regarding your request do not hesitate to contact us.

Please Note: HM Treasury has a dedicated email address for the public to make FOI requests, [HM Treasury request email].

Kind regards

Information Rights Unit | Correspondence and Information Rights | HM Treasury, 1 Horse Guards Road, London, SW1A 2HQ | www.gov.uk/hm-treasury

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FOI Requests, Her Majesty's Treasury

1 Attachment

Dear Ms Mawhood

 

Please find attached HM Treasury’s response to your information request.

 

To be helpful, I have copied below the link cited in the response.

 

[1]https://ico.org.uk/for-the-public/offici...

 

Yours sincerely

 

Information Rights Unit | Correspondence and Information Rights Team | HM
Treasury, 1 Horse  Guards Road, London, SW1A 2HQ

 

 

 

www.gov.uk/hm-treasury

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