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
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
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
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