'Help with Fees' Scheme Excludes Crypto from Disposable Income: UK Ministry of Justice Clarifies
Summary:
The UK's Ministry of Justice has clarified that cryptocurrency holdings will not be counted as disposable income within its proposed ‘Help with Fees’ (HwF) scheme. The scheme aims to provide financial support for court or tribunal fees to low-income individuals. Following a public consultation, the Ministry of Justice stated cryptocurrencies are already covered under the existing definition of capital and will continue to be so. The ministry also plans to update its public guidance to help applicants understand which types of capital are included in its definition.
The Ministry of Justice in the UK has clarified that cryptocurrency holdings will not be regarded as disposable income in the proposed ‘Help with Fees’ (HwF) scheme, aimed at providing affordable access to the legal system for low-income British citizens. This scheme plans to offer fiscal assistance for court or tribunal costs to those with slender savings and low income, ensuring financial constraints don't serve as an obstacle in accessing justice. The initiative aims to uphold justice for individuals with low income, balance the cost of the scheme's fee remissions borne by taxpayers, and simplify the accessibility and eligibility criteria.
In a public consultation on the proposed scheme, the Ministry received feedback on its intent to broaden the disposable capital definition to incorporate 'savings and investments.' This included a variety of examples, among which was cryptocurrency. Most respondents supported this proposal, pinpointing it as a means of including investments that don't qualify as liquid assets. On the other hand, some respondents who disagreed with this proposal suggested that individuals, such as pensioners and self-employed individuals, should not be penalized for their savings and investments.
The government, in response, stressed that it will not provide an exhaustive list of what constitutes 'savings and investments', arguing that it could inadvertently overlook or exclude certain types of capital. The existing Fees Orders already cover cryptocurrencies under the capital definition, and they will continue to be included in the proposed definition, it added. The ministry also plans to revise the public guidance for HwF applications, which should help applicants understand if specific types of capital are included in the current definition. It was also stated that individuals whose savings or investments exceed £16,000 would be expected to use these funds for legal fees before benefiting from the HwF scheme.
The efforts to establish cryptocurrency regulation in the UK seem to be accelerating, with the country on the verge of passing legislation treating cryptocurrencies similarly to conventional assets. The proposed Financial Services and Markets Bill is expected to empower the Treasury, Financial Conduct Authority, Bank of England, and Payment Systems Regulator to formulate and implement regulations for businesses dealing with cryptocurrencies.
Published At
10/17/2023 9:50:31 AM
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