Taxpayers could be forced to pick up bill in FBT legal stoush
A legal storm is brewing between Victoria’s magistrates and the Department of Justice over a potential fringe benefits tax “bungle”. And now taxpayers could be forced to pay the bill.
Law & Order
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A potential state government tax bungle could see taxpayers forced to pay out tens of millions of dollars extra to magistrates, senior cops and public service executives.
A legal storm is brewing between Victoria’s magistrates and Court Services Victoria over claims that, under the Magistrates’ Court Act, the government should have been paying their fringe benefits tax.
The Magistrates’ Association of Victoria has even sought independent legal advice — from Kenneth Hayne, who headed the banking royal commission — with individual magistrates believing they could be owed more than $50,0000.
The government is also seeking legal advice.
It is believed any magistrate employed after 2001 may be affected.
It is believed there have been crisis meetings this week between Chief Magistrate Peter Lauritsen and the government to discuss the issue.
The potential tax bungle could cost the government tens of millions of dollars paying out magistrates, judicial registers and VCAT members alone.
County and Supreme Court judges are also believed to be affected.
Members in Victoria Police’s command and senior unsworn executives were also potentially dudded on fringe benefits tax.
Investigations are also under way into how many executives in other parts of the public service may have been incorrectly paid.
Magistrates, police command and senior government executives have access to an executive car-leasing scheme, which allows access to a cheaper car that is insured, issued fuel cards and registered by the government each year.
But the scheme attracts fringe benefits tax, which it is argued, the Magistrates’ Court Act says must be paid out of “consolidated revenue”.
The Executive Fleet policy also says that: “Fringe benefits tax is paid by the government and will be disclosed on your group certificate”.
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CATFISHER’S BIZARRE COURT ITEMS
A Magistrates’ Court insider said the tax costs about $5000 a year for an individual, but many magistrates had been working in the courts for more than a decade, meaning they could mount a claim for massive five-figure payouts.
Court Services Victoria is examining the “complex issue”, but had told the state’s magistrates it was not likely to be resolved before July.
A government spokesman said: “The Attorney-General is referring this matter to the Solicitor-General for legal advice.”