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Vernon Smith QC Suggests Barbados Bar Association Illegally Charging VAT on Member Subscriptions

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Vernon Smith QC
Vernon Smith QC

BU read the Barbados Today article with  interest which outlined Vernon Smith QC reaction to being characterised a delinquent Barbados Bar Association (BA) member. The BU family is reminded of the list which was circulated by the BA and posted to BU in a blog by Caswell Franklyn – Defaulting Lawyers.

BU has posited a view that the Legal Profession Act contravenes the Constitution of Barbados concerning lawyers who opt not to pay BA fees and is therefore a nullity ab initio. Vernon Smith’s view has also been discussed.  Now that he has come public in his defense it provides the opportunity for the BU family to explore the matter further.

Vernon Smith is quoted in the article as follows:

“However, Smith pointed to a long-standing dispute he has had with the Bar Association over his “conclusion” that the law did not require attorneys to pay VAT on subscription fees. He pointed to a January 29, 1997 letter to the secretary of the Bar Association, under the heading “Barbados Bar Association subscription for the year 1997 for Vernon O. Smith and Laurie-Ann Smith of Smith & Smith.” [BU emphasis]

BU proffers the following decision in a House of Lords case for BU legal eagles to ponder given the recent turn of events fired by Vernon Smith QC public position on the matter. We digress to clarify that any reference to BU legal eagles includes Caswell Franklyn who has shown an above average grasp of legal matters posted to BU. Surely some members of the BU family have been most uncharitable to Caswell when debating legal issues. As a consequence Caswell has NOT been amused.

Here is the case referred to  which appears to give credence to Smith’s position that it is illegal for the BA to charge members VAT on subscriptions.

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151 responses to “Vernon Smith QC Suggests Barbados Bar Association Illegally Charging VAT on Member Subscriptions”

  1. Caswell Franklyn Avatar
    Caswell Franklyn

    David

    My approach is never to be intimidated by anything that is written in English. Once it is written in English, it is just a matter of English Comprehension no matter what other label is placed on it, be that Scripture, Geography or Law. I do not consider myself to be legal eagle, just someone who reads and understands English, unlike Amused.

  2. Gabriel Tackle Avatar
    Gabriel Tackle

    The Bar Association is a closed shop.Only a select/qualified few may purchase membership.It is not selling a public good or service,neither is a member buying a public good or service.I,as a citizen,not qualified to be a member of the Bar Association according to their rules,cannot go there and pay an annual membership fee,therefore they do not satisfy the VAT Act.Annual membership fees of a private body is not the same as buying a service provided by that body as in this case buying legal advice by a member on a matter involving the member.That’s vatable.

  3. PLANTATION DEEDS FROM 1926-2013 AND SEE MASSIVE FRAUD ,LAND TAX BILLS AND NO DEEDS Avatar
    PLANTATION DEEDS FROM 1926-2013 AND SEE MASSIVE FRAUD ,LAND TAX BILLS AND NO DEEDS

    Does the BAR have a VAT ID number? Is the VAT going to the government ? Does the BAR have to pay taxes for the land they on or anything else they dealing with? Is all the information dealing with the BAR public information? or only the list of the lawyer who not paid their DUEs? What other list can we find out about the BAR and its members with out the F.O.I or I.L being past, which is a dead issue after Election ,,,, More Fruad on the People
    The BAR is a fraud just like UDC, NHC. T&W, CB. AG,PM . QC,land tax , inland Rev.. I am sure we can find a lawyer behind each door..They looking to defraud each other , same nest of RATS, like a snake eating it self. Vern Smith , OH boy is he any better at Smith and Smith , goes well with Sleepy.

  4. JUST ASKING Avatar
    JUST ASKING

    What is going on Barbados ??

  5. David (not BU) Avatar
    David (not BU)

    the time is now JUST ASKING. when you see lawyers action/eating them own, the time is now.

  6. John Avatar
    John

    Surely there is a difference between a lawyer and an accountant …. and their respective associations ….. isn’t there?

    Would a decision affecting accountants necessarily affect lawyers?

  7. John Avatar
    John

    I googled VAT “membersship dues” and got this rather interesting link.

    http://www.saaci.co.za/newsarticle.asp?NewsID=426

    Looks like the accountants in South Africa pay VAT on their membership dues.

  8. Amused Avatar
    Amused

    @John. And Barbados, of course, takes its VAT laws from South Africa, does it? And where does South Africa take its VAT laws from?

  9. Amused Avatar
    Amused

    @David. The payment or not of VAT does not, in my view, vitiate the position that the Act is a nullity ab initio.

  10. Hal Austin Avatar
    Hal Austin

    Are professional membership fees tax deductible? That is one of the unfair advantages of joining a professional association and a trade union, even though organisations like the British Medical Association and the Law Society and Bar Council are just trade unions in practice.
    Although there is an argument that VAT should not be imposed on professional fees, if it is tax deductible then claim it back, unless there is a point of principle.

  11. David Avatar
    David

    @Caswell

    What is your view based on what Smith has been quoted? Let us see if Jeff agrees with you. This matter seems to be full of twists and turns.

  12. David Avatar
    David

    This what was posted on another blog.

    http://bajan.wordpress.com/2013/04/17/tales-from-the-courts-ndash-xiibarbados-bar-membership-revisited-registrar-and-sir-david-simmons-wilfred-abrahams-exposed/comment-page-3/#comment-770894

  13. Interesting !! Avatar
    Interesting !!

    The argument on the legal authority of the Bar Association to charge VAT does not rule out the other argument that forced membership of the Association is unconstitutional . It only highlights the fact that the legislation may be faulty on several counts . Maybe that is the very reason why Abrahams was advised by the committee which the Minutes of the meeting confirm included the former Chief Justice to leave well-enough alone . It does not appear that Abrahams’ new found zeal , ignited for whatever reason , will work to the benefit of the Association ; he may in time turn out to be its biggest enemy . Of particular interest is the position taken by Mr Smith ; he was willing to pay the VAT owed once the authority to charge it was established . It is indeed a pity that the Bar Association has not had this matter settled .

  14. David Avatar
    David

    @Interesting

    While a lot of culpablity rest with Wilfred it does not give all the other BA presidents AND AG (including Prime Minister Stuart and AG Adriel Brathwaite).

  15. Lemuel Avatar
    Lemuel

    David
    i have to admit that BU is the news maker in Bim. The Nation today is full of the CTUSAB affair and the illegal lawyers who do not obey the Law and pay the BA fees with or without VAT.

  16. Bush Tea Avatar
    Bush Tea

    Lawyers are without ANY doubt the biggest set of humbugs anywhere on earth. Bushie would have said assh**es but was restrained out of respect for Jeff and Amused.
    This is bare shiite.
    You can imagine the VERY people who administer law and justice in a country getting on like a bunch of teenage girls ?!?

    If the Registration fee is VAT free Smith is free to submit a claim to the VAT Department just like Adrian Loverage had to do for his refunds that are due to him. That is just a lotta shiite from Vernon.

    If the law is unconstitutional, challenge it and have it CORRECTED.
    If LAWYERS don’t know how to do that then no wonder we are where we are…

    Bushie agrees with the need for change- because the shitty BAR association has FAILED MISERABLY as a disciplinary body, and any change in the law will HAVE to provide for an alternative body to discipline these aholes…… It HAS to be better than what we have now.

    If these jokers refuse to pay their registration, it means that they are working ILLEGALLY. Somebody should do something about their asses.
    Where are the judges?
    The CJ? The AG? The press?

    ….why does some client who lost their case not sue the illegal lawyer who (mis)represented them?

    Bajans are brass bowls. You can get away with any mixture in them….

  17. David Avatar
    David

    @Bushie

    With respect, what is the purpose/function of the BA if not to safeguard the interest of members AND the legal profession? The minutes of the BA records the BA directorate dismissed concerns raised by the floor. The issue is bigger than Vernon. You can’t agree with Alair skinning his botsy at Judge Richards but lick Vernon.

  18. John Avatar
    John

    Amused | April 24, 2013 at 1:53 AM |

    @John. And Barbados, of course, takes its VAT laws from South Africa, does it? And where does South Africa take its VAT laws from?
    ++++++++++++++++++++++++++++++++++

    Seems more than likely to be England!!

    Wasn’t it a colony of the Old Mother Country at one time?

  19. John Avatar
    John

    Canada was also a former colony of England.

    I came across this on the web while I was searching but this time I replaced VAT with GST.

    http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/212/

    “Annual dues can include the following amounts related to your employment that you paid (or that were paid for you and included in your income) in the year:
    •annual dues for membership in a trade union or an association of public servants;

    •professional board dues required under provincial or territorial law;

    •professional or malpractice liability insurance premiums or professional membership dues required to keep a professional status recognized by law; and

    • parity or advisory committee (or similar body) dues required under provincial or territorial law.

    Annual membership dues do not include initiation fees, licences, special assessments, or charges for anything other than the organization’s ordinary operating costs. You cannot claim charges for pension plans as membership dues, even if your receipts show them as dues.

    The amount shown in box 44 of your T4 slips, or on your receipts, includes any GST/HST you paid.”

  20. bk Avatar
    bk

    Question
    if the Constitution is contravened by an act, is that act therefore null and void? If so, why then is there the need to go through the whole process of having to challenge it and such. Can someone enlighten me?

  21. Bush Tea Avatar
    Bush Tea

    @ David
    “You can’t agree with Alair skinning his botsy at Judge Richards but lick Vernon.”

    YOU ARE WRONG TWICE.

    One of the formal legal roles of the Bar Assoc is to act as THE legally constituted disciplinary organ for the legal profession in Barbados. The logic is that ordinary citizens are unable to perform such duties.

    This role conflicts with the natural role of the BA to represent their own (sometimes illegal) interest. One would think that the Disciplinary Committee would be an independent organ within BA able to focus on their particular professional role (Ha Ha Ha LOL)

    The second error you made is that Bushie CAN agree with Alair. The whole scam should be mooned, …but Vernon can’t come with that childish argument bout VAT…..that is an insult to Bushie’s intelligence….

  22. Bush Tea Avatar
    Bush Tea

    @ bk
    Question
    if the Constitution is contravened by an act, is that act therefore null and void? If so, why then is there the need to go through the whole process of having to challenge it and such. Can someone enlighten me?
    *************
    …because that is only someone biased opinion. Having this opinion saves these lawyers from paying fees.
    …..if you were a cheap lawyer with a Mercedes to pay for what ‘opinion’ would YOU have about a law requiring you to pay money to the BA?

    Bushie have a STRONG opinion about having to pay THOUSANDS of dollars each year in land tax for property Paid for and OWNED by the bush man….
    …that shiite MUST be unconstitutional too…. So stop paying…?

  23. Jeff Cumberbatch Avatar
    Jeff Cumberbatch

    @BU,

    On a preliminary reading of the case posted, I do not agree that it makes it unchallengeably clear that VAT is NOT payable on membership subscriptions to the Barbados Bar Association. The case properly deals with whether certain activities of the Institute [the issuing of licences for a fee] were chargeable to VAT so that it might claim a refund on the Input Tax paid on the goods and services supplied to it.

    So far as membership fees of the Institute were concerned, these were made exempt from VAT under Schedule 9 Group 9 of the Act,as Lord Slynn states. This provision, to the best of my knowledge, does not exist in Barbados, unless one considers the Bar Association to be a trade union under Paragraph 11 of the Second Schedule of our Act, and the fact that these fees had to be made exempt from VAT in the UK means that they otherwise would be VATable.

    Section 94(2) of the English Act is reproduced in the definition of “taxable activity” in the Barbadian Act, Cap 87.

  24. Jeff Cumberbatch Avatar
    Jeff Cumberbatch

    @bk@7:29am,

    Who determined that the Act contravened the Constitution?

  25. David Avatar
    David

    @Jeff

    Thanks!

    It seems obvious what has to be done by all parties concerned AND it should be done swiftly.

  26. David Avatar
    David

    @Bushie

    We are on the same side of this issue. The fact that it has been allowed to go on for YEARS is a big black eye for the profession.

  27. Amused Avatar
    Amused

    @Bushie. I note your comment about Adrian having to go for a tax refund. But that is a REFUND on VAT that is due and payable. This is a different issue. Mr Smith QC’s contention is that VAT is NOT payable on Bar fees and his precedent as published by BU is unassailable.

    @John. You seem to have the strange idea that because South Africa does it, it is correct. I don’t share this confidence of yours in South Africa.

    Also, John, your knowledge of Canadian practice is deficient. In Ontario, for instance, there is a law society, responsible for the licensing of lawyers…..and the Ontario Bar Association, which is a non-compulsory body. I am not aware of GST etc. is payable on the fees payable to the Law Society of Upper Canada or not, which is compulsory as a liccensing body, but will certainly endeavour to find out.

    @David. In any event, it appears to me that the matter will soon come before the Courts for determination as Mr Smith has stated his intention to file legal proceedings. I would caution, however, that, under the CPR protocols, it may be that the BA will back away from its position and, as it did in 2008, decline to have the matter resolved – but one has to ask if this will be done on legal advice to the BA from the Registrar and the CJ this time around.

    My personal feeling is that since the government is now aware of the issue which has been so widely reported, it is incumbent upon it to act in a law that we all agree is in breach of the Constitution and, while they are at it, on the issue of VAT and to clarify the matter. The matter has been festering for some time, but not publicized. While the government may well have been able to ignore the situation before, it cannot do so any longer. And while we know that government response will be slow, given the need to take legal advice and come up with a strategy, I think that some statement that the matter is being looked into and will be dealt with is now absolutely required.

  28. Hants Avatar
    Hants

    David never before have so many had so much to write about so little.

    Can convictions will be overturned because the accused was represented by Lawyers who did not pay their fees?

    That is a real question for the BU Legal eagles.

  29. Hants Avatar
    Hants

    http://www.lsuc.on.ca/WorkArea/DownloadAsset.aspx?id=2147491350

  30. David Avatar
    David

    @Hants

    Don’t worry, there is the highest court in the land where laws may be amended in the early hours of the morn a al the Judicature Act. The delinquent lawyers maybe asked to pay retroactively…lol.

  31. Amused Avatar
    Amused

    @David. I doubt it. If the Court rules, as I feel it must, that the Act was aaa nullity ab initio, end of matter.

    I see from the Nation that Andrew Pilgrim has said that the BA will now refer the matter to the courts. I give Andrew great credit for this. BUT, I do not let the AG off the hook – he should be advising the electorate that he has asked for aa legal opinion as, whether he likes it or not, he will be named as a party to the action, since it involves the constitutionality of an act of Parliament. It is, in my view, not a good idea for the AG to duck this issue, as it will come back to haunt him later and also testify as to the size of his testicles.

  32. willie Avatar
    willie

    Do the accountants on here have any opinion on or knowledge of whether VAT regulations require lawyers to pay VAT on fees to BA? Or do the lawyers act as their own accountants? If BA collects VAT on fees received it should be submitting the funds to government. It boggles the mind that Vernon Smith QC has reportedly raised this issue over many years and neither he nor BA has sought to resolve it before now. Perhaps Barbadians are too highly educated for their own good.

  33. John Avatar
    John

    “One of the most common mistakes made by not-for-profit corporations is failing to collect and remit GST on membership dues or sales of items to members or clients. Whether or not GST is payable depends in part on whether members receive a material benefit as a result of their membership. Mere entitlement to receive a newsletter or other fringe benefit is not sufficient to make memberships subject to GST.”

    http://www.ic.gc.ca/eic/site/cilp-pdci.nsf/eng/cl00693.html

    Here is a position on not for profit organisations out of Canada.

  34. Well Well Avatar
    Well Well

    I sincerely hope that all the lawyers, judges etc, involved are volunteering their time services to fix these two problems that they themselves allowed to fester for decades, eg. Bar Association Fees and VAT.
    http://www.nationnews.com/articles/view/over-the-high-court/

    Willie…………Bajans are so highly educated that pretty soon they will own not one business place on the island, the other islands as well as North and South America and Europe, will own everything there, makes us wonder what happened to common sense cause it looks like education has now become over rated, Bim being the perfect example.

  35. Well Well Avatar
    Well Well

    Davis…………..it would be wonderful if they delinquent lawyers are asked to pay their bar dues retroactively before being allowed to continue practicing on the island……………it would certainly bring a lot of the mercedes driving frauds to their knees to the delight of their victims/clients.

  36. Well Well Avatar
    Well Well

    Sorry……..I meant David.

  37. The People's Democratic Congress Avatar
    The People’s Democratic Congress

    It is entirely amusing that many commenters – some attorneys as well — are found under this thread to be less importantly debating whether under the so-called VAT Act it is illegal for the government, through the Barbados Bar Association, to steal some portions of the payments of registering attorneys, rather than their debating, if anything else, that TAXATION is absolute theft.

    Given that it has already been established by many people
    n Barbados that TAXATION is pure unadulterated theft, these commenters, and esp. the ones that are attorneys, should have been debating on this forum the contemplating of taking future court action to do establish something very historic and that should long have happened: the striking down of ALL TAXATION legislation in this country for their unconstitutionalitisms and illegalities, and the barring of the government or the legislature from ever again proposing/enacting/passing such laws, as that the courts are supremely placed to so act in the interest of fundamental fairness in protecting the people against the arbitrary and illegal actions of the government, and are best placed too to deliberate and rule on the fact that there are no constitutional laws or statutory laws or common laws that can ever justify the government outlawing theft whilst at the same time committing itself to stealing from the relevant people, businesses and other entities themselves.

    PDC

  38. Well Well Avatar
    Well Well

    PDC…………without taxation, all countries would come to a complete halt, I don’t believe in over taxation, but taxing greases the economic wheels and we enjoy the direct results of these actions……..how would you propose to run a country without taxation to stimulate the economy?? it would be interesting to hear your new proposal.

  39. David Avatar
    David

    @well well

    Just do a search of BU using the word ‘taxation’. No need for PDC to rehash this topic.

  40. Well Well Avatar
    Well Well

    Ok……..did not know he already held a position.

  41. robert ross Avatar
    robert ross

    On Bush Tea’s charge of humbug (with which I agree)…

    Can anyone enlighten me on whether the list of attorney’s who have not hitherto paid their fees has now been adjusted through payment by any of those due to be made QC’s on Friday? I have heard a rumour – no more – that it has.

  42. David Avatar
    David

    Yes there is the rumour making the rounds. One would have to wait of course but to be fair it would have to be described as blatant hypocrisy and expediency…lol.

    ONLY IN BARBADOS.

  43. Well Well Avatar
    Well Well

    PDC…………I get the part where you want to phase out some money, but still leaving some in circulation (gray area)………….I am assuming (don’t like to do that) you will have a bartering system in place (good luck in Bim, where everyone wants to be seen shopping at cave shepherd or super centre) and you will manage to achieve annual growth of 8-10% annually (i am still not clear on how). Looks like your new system is still a work in progress.

  44. Alvin Cummins Avatar
    Alvin Cummins

    @PDC
    A large portion of the population are already tax exempt, since wages below a certain level are not taxed, and at another level, the taxes they pay are refunded. Would you exempt millionaires and multimillionaires from paying any tax at all? would you exempt conglomerates from any taxes/ Think before you speak.

  45. Hants Avatar
    Hants

    as the late great John in dde canteen would say……NEXT!!!!!

    Protection of funds in Client accounts.

    Yuh hearin muh David?

  46. David Avatar
    David

    @Hants

    That is another issue which has given the BA a black eye for years. The Disciplinary Committee needs to do some work and it needs to treat with complaints in a more transparent manner. We expected to see some improvement under Pilgrim but same old BS. How can the BA be asking for the CJ to jump yet it has maintained the status quo? This is one area if the BA wants to spruce up the image of the profession it needs to do some work.

  47. Bush Tea Avatar
    Bush Tea

    How Hants mean ” Next!”?
    …wunna understand that this matter MUST be resolved FIRST?

    If the court rules that lawyers DON’T have to join the BA who the hell will we even blame when the rogue lawyers thief their clients’ land and money?

    IT IS OBVIOUS that the intent is for ALL lawyers to be subject to the discipline of the BA,….and that the mechanism to effect this intent is this piece of legislation which seeks to ENSURE that all lawyers are members …and so subject to the BA’s discipline.

    It would NOT surprise Bushie to hear that one of our high court judges declare this law null and void…and then leave the door open for these lawyers to tek up all the funds and property they can get their hands on…
    If it is bad now, wunna can imagine if a fella could just “unjoin” the Bar, do what he or she like ….and not a boy to call he to account…? ….and them fellas got millions of dollars from Hants alone in client accounts tempting them to get that Merc SLK…. 🙂

    This is a lotta shiite.

  48. Hants Avatar
    Hants

    Bushie I am more than willing to pay legal fees for work done but I can assure you that I am poverty stricken,past my best before date and no Lawyer will profit from me.

  49. The People's Democratic Congress Avatar
    The People’s Democratic Congress

    Well Well,

    Some of the very contentious matters involving this case concerning some of these lawyers that have not recently registered to be attorneys – and who could have done so but who have so far refused to do so – are very axiomatic conscientious matters as well. We support them wholeheartedly in doing so. It is fundamentally wrong and repugnant for any law of will to force any professionals, or any other persons, for that matter, to do things against their will and in respect of matters that they are not in a position to agree/ to do to themselves, in such a manner so unreasonable, so illogical, so totalitarianistic, like the government has chosen to do to these lawyers and all other lawyers. It is downright wickedness for any law of competing wills to say to lawyers that in order to practise law in Barbados they must be members of the Barbados Bar Association, and furthermore that they in order to practice yearly they must pay fees ( which are really TAXES by another name) to the government through the Barbados Bar Association.

    Surely, this kind of fascism must be extirpated in all of its expressions from out of the Barbadian society!! For there are other professional bodies in Barbados that are faced with similar circumstances – the doctors, dentists, architects, engineers, etc. and who – many of them – must use the opportunity to create history in Barbados. Taxation has no place in a modern Barbados society and must go!!

    So, there is consistency and coherence of our positions as it relates to our opposition to the government forcing these lawyers to hand over countless portions of their payments to it and as it relates to our opposition to the government forcing the relevant people, businesses and other entities to hand over countless portions of their incomes, payments and transfers to it. Such are things which these persons will never ever do to themselves!!.

    Well Well, our position is not to abolish money. Moreover, our position is to greater free up money in the Barbadian society so that persons will greater and better use it to really serve two main objectives: 1) as a representing standard of deferred payments; and 2) as a store of denominations. So, there is no connection between the truly progressive stance of Abolishing Taxation and the utterly regressive notion of Abolishing Money.

    The fact that money is generally accepted in Barbados will mean that there will never be a barter system on an extensive scale in Barbados, albeit that money is NOT a medium of exchange, as indoctinated into the minds of many of our younger people in the school system and the tertiary college system in the country.

  50. Well Well Avatar
    Well Well

    PDC…………….I don’t know if you know how much damage that the renegade attorneys (a gaggle of them) have done to the victims/clients in Bim. They cannot pay enough taxes for all the harm they were allowed by the same BAR and successive CJs, AGs and Prime Ministers to commit…………my view is if something is not done with them soon and they are not penalized for the years that they were allowed to roam freely stealing from whomever they thought were prime targets while more than likely not legally practicing law, and if they are not regulated in some form or other, things in Bim will never change……….I know in Jamaica the clients who feel they are victimized by lawyers solve the problem themselves. I really don’t feel for those culprits, cause i know personally how much damage they are capable of visiting on their victims/clients.

    With regard to your plans of eliminating taxation and turning the country into a utopia, I admire your ambition and hope you are successful in your endeavors…………

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