The Law Society has been contacted by a number of solicitors enquiring whether, in the Society’s view, recent measures have caused a benefit in kind liability for employee solicitors on whose behalf their firm has paid the annual practising certificate fee and/or membership of the Society.  The measures referred to are Financial Resolution No. 26 passed by the Dáil on 7th December, 2010, and section 7 of the Finance Act, 2011.

The measures in question, although described in speeches delivered by the Minister for Finance to the Dáil as “abolishing tax relief for trade union subscriptions”, also make reference to “annual membership fees of a professional body”.

The Society has considered these measures and believes that they do not subject to tax the solicitors’ practising certificate registration fee and Compensation Fund contribution imposed on an annual basis by the Society pursuant to its statutory powers and obligations under the Solicitors Acts 1954 to 2008.  It is, of course, a requirement under the Solicitors Acts that “no solicitor shall practise as a solicitor unless a practising certificate in respect of him is in force”. 

A solicitor’s firm requires a practising certificate for each of its employed solicitors.  The employed solicitor does not derive any personal benefit from the holding of a practising certificate as he or she is unable to make any personal use of, or thereby derive personal benefit from, the practising certificate.

The practising certificate payment required by statute for the year ending 31st December, 2011, is in the total sum of €2,148 for solicitors admitted three years or more (registration fee €1,448 plus €700 Compensation Fund contribution) and for solicitors admitted less than three years it is €1,842 (€1,142 registration fee and €700 Compensation Fund contribution).  The Society does not believe that any of this has been subjected to a benefit in kind tax payment by the new measures.

Separately from payment of the practising certificate fee a solicitor may voluntarily choose to (in the Society’s view should) pay an annual subscription for membership of the Society which this year (as for many years) is in the sum of €85.  For solicitors admitted less than 3 years on 1st January, 2011, the membership subscription is €55 and for solicitors admitted in the course of 2011 the membership subscription is €20.

It appears that the impact of the recent changes on the law on benefit in kind will submit to tax the payment on behalf of an employed solicitor of this membership fee of €85, €55 or €20 depending on length of time admitted as a solicitor. 

The Society made a formal submission before Christmas 2010 urging that this possible subjection to benefit in kind of the Society’s annual membership fee (of €85, €55 or €20 as the case may be) should be reconsidered. 

The Society believes it is in the public interest for as many solicitors as possible to be members of the Society, in addition to holding practising certificates.  It is through the collegiality of membership, involving among other things receipt of the Society’s Gazette on a monthly basis, that solicitors remain in communication with the Society about all issues to do with standards and best practice.  The maintenance of the highest level of technical competence and of professional standards set down by the Society is a matter of public interest and membership of the Society contributes greatly to achieving this valuable objective.

The Society has not as yet received a response to its submission in this regard but intends to communicate generally with the profession on this subject when clarification has been received.