Peers could be forced to pay tax on expenses

Peers are under pressure to pay tax on thousands of pounds of expenses incurred for attending parliament.

Accountants from mid-tier firm Grant Thornton said peers could be asked to pay tax on their the £174-a-day attendance allowance, the Observer reports.

Mike Warburton, tax director at GT, said HMRC could decide to charge the MPs tax on the allowance, owing to the fact that it is a "round sum" and not " wholly exclusively and necessarily incurred" in the performance of their parliamentary duties.

A spokesman for HMRC said members of the upper house are not taxed on their allowance, as it is a fixed amount to cover the costs of all expenses relating to their attendance.

Read the full story: MPs demand Lords pay tax on expenses