On the money with Gavin Hinks

Sir Thomas Legg, the civil servant auditor who reignited the MPs expenses controversy last week with his letters to members must be breathing a sigh of relief.

After apparently creating a new rule all on his own that gardening claims should be capped, he was met with calls that he should look into the practice of “flipping” and its tax implications.

Flipping occurs when MPs change the status of their second homes to their first and then sell it without paying capital gains tax on the profit.

Not very nice if you’re an ordinary citizen without the benefit of having the privilege of being an MP at Westminster, but surely not something Sir Thomas wanted to get involved in.

His new rule gave him enough grief in the press he surely wouldn’t want to dip in his toe into the turbulent waters of flipping and the CGT liabilities that go along with it.

But then he never had to because that is HM Revenue & Customs job ­ and one they shouldn’t shirk from.

This week we learn that our ever reliable tax inspectors have indeed begun an enquiry into the affairs of up to 27 MPs.

Given the evidence that emerged in the initial expenses stories it would have been more shocking if they hadn’t.

And that’s because it was difficult to see how many of the things could be justified.

If you need a new chair for your office, or second home ­ and it’s at the public expense ­ go to Ikea, bring it home and build it yourself.

Don’t go and spend hundreds of pounds on an antique. It’s always going to look like a benefit in kind. Which is exactly the view HMRC seems to have taken and quite rightly too.

It does make you wonder about the intelligence of some of our MPs and whether we should have elected them at all.

Gavin Hinks is editor of Accountancy Age

Further reading:

Institutes defer judgement on MP's expenses