The loss of earnings allowances paid to magistrates (Justices of the Peace) who are not paid for their absences by their employers were last increased on 1 October 2003. New rates have now been introduced from 1 October 2005; the self-employed rate has gone up by 9.2%, the rate for employed justices has increased by 13.8%.

In addition to the loss of earnings allowance, magistrates may also claim travel and subsistence allowances.

The treatment of payments for financial loss depends on whether a justice is employed or self-employed. If the justice is

• employed and taxed under PAYE, the justice is treated as holding an unpaid office and the financial loss allowance is not considered to be an emolument of that office as it merely compensates an individual for loss of earning and expenditure incurred. The allowance rate is intended, therefore, to cover the justice's net loss of earnings.
  
  
• self-employed and taxed on profits they derive from carrying on a trade or business, payments including the financial loss allowance, which compensate for loss of profit or for the fact that additional business expenses have been incurred, must be brought to account for tax purposes (including value added tax). The allowance rate in this case is intended to cover the justice's gross loss of earnings.

New procedures for claiming allowances have also been introduced. Justices are normally expected to make a claim for allowances monthly but not less than quarterly. Their claims are supported by an annual declaration on which they must show their employment status and their daily loss of earnings when performing their magistrates' duties.

In support of a claim for financial loss, justices who have some or all of their wage or salary deducted by their employer for any period that they are absent from work while performing magistrates' duties are required to provide a letter from their employer or some other evidence, such as a payslip, from which the amount that has been deducted can be demonstrated.

...back to 13 October 2005

Sources:
Justices' Allowances

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