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27 May 2009
The taxman is looking at whether MPs paid tax on accountancy advice they received and claimed against expenses.
The expenses claimed on such advice is not tax-deductible, and HM Revenue & Customs is looking at whether the 40 ministers who claimed have paid the appropriate tax, the BBC understands.
The Telegraph had earlier reported that the ministers had claimed a total of at least £25,000 for help with tax returns. Chancellor Alistair Darling said he had paid any tax due on his claims.
Labour said it believed ministers had honoured their tax liabilities.
An HMRC spokesman told the BBC: 'It's a general principle of tax law that accountancy fees incurred in connection with the completion of a personal tax return are not deductible. This is because the costs of complying with the law are not an allowable expense against tax. This rule applies across the board.'
HMRC had given this advice to MPs in 2005.
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Visitor comments Add your comment
The Big mistake
Surely they all only made one mistake....getting caught
Posted by: Tommy MACA, 27 May 2009 | 00:00
MP's and tax
HMRC should look at all the tax aspects relating to the MP'S perks scandle. The serial way houses have been flipped renders any profits liable to income tax as scedule D Case 1 income if, that is tax law is applicable to MP's, but perhaps it does not apply to them. And the disclosures made so far reveal multiple P11D disclosures. No doubt correct P11D's will have been filed in all cases and the correct tax paid. We now have a new tax penalty system. As MP's brought in the new rules, and all the other tax rules that appear to have been broken, they are all fully familiar with them so any breeches should be liable to 100% penalties. Also we now have the new name and shame and fine rules for accountants who get tax wrong, they should of course also be applied to MP's. After all Mr Darling is very keen to stamp out all tax evasion, he should have no difficulty extending his new rules in such a balanced and fair way. It is so wonderful to live in a Parliamentary Hypocrisy
Posted by: Chris Try, 27 May 2009 | 00:00
MPs Expenses and benefits
Despite the unique tax rules applying to MP the CGT rule is that if you acquire a property with th view to selling and making a profit PPR does not apply and the gain is taxable.
Claims realting to mortgage payment for non-existent mortgage is inexcusable. This is negligence,... and more. If an MP cannot manage their own affair how can they manange that of a country? They forgot to stop the claim but they did not forget enough to pay someone twice! Did they?
A lot of the expenses claimed allegedly , cannot be justified as wholly, exclusively and necessarily.Hence there should be a backduty investigation. Who is the MLRO?
If anyone sends a cheque to HMRC -decides to pay for tax which had not been declared before , HMRC has a duty to investigate.
Posted by: neil, 27 May 2009 | 00:00
Won't hold my breath
I look forward to the signed admissions of 'negligence' from MPs and the imposition of the (minimum) 30% fines which the Revenue requires from everyone else.
Not holding my breath....
Posted by: David N, 27 May 2009 | 00:00
MPs should prepare and submit their own tax returns
Why are MPs using tax advisers anyway? The self-assessment regime is intended to make everyone's tax affairs easy to manage. If they were compelled to do the tax return work themselves, they would gain a valuable insight into how complicated it all is, which might (some hope, I know!) make them think they should be trying to simplify the tax legislation, rather than tinkering around the edges we have got used to down the years.
Posted by: Tony, 28 May 2009 | 00:00