 |
|
| CURRENT SECTION :: News |
The No. 1 Resource for UK IT Contractors: Comprehensive guides - Daily news IT contract jobs - Market rates - Forums - IT contractor network - Calculators |
|
 |
By the end of this week, many pundits believe Alistair Darling, the Chancellor of the Exchequer, may not be in his ministerial post, thanks to the Daily Telegraph’s latest revelations about his expenses claims. The newspaper alleges the Chancellor billed the taxpayer for two homes at the same time: not only did he receive a so-called ‘grace and favour’ apartment in 11 Downing Street for his ministerial role, but he also continued to bill the taxpayer for payments relating to his own apartment in London, which he was letting to tenants at the time. The Telegraph claims this could be in breach of parliamentary rules, which dictate that MPs can only claim on one property at a time. Regardless of whether this was a breach of the rules or not, it is clear that MPs enjoy a very different tax regime to the travelling consultant. For a start, the ‘two year rule’ is one that – uniquely, it appears – doesn’t apply to MPs. The rule dictates that ordinary proles like you and I can only offset the cost of a second home used whilst working away from home against tax if you know you’re going to be working at that location on what HM Revenue and Customs determines to be a ‘temporary’ basis – and that can’t be any more than two years. MPs, on the other hand, can claim for a second home – and, it appears, whatever they want to put in it – tax-free for as long as the public chooses to keep them in office. The practice of ‘flipping’ – also practised by the Chancellor – is also a luxury not open to the rest of us under tax rules. Then there’s the overnight subsistence allowance. Members of the public who need to work away from home during the week are allowed to claim just £5 a night as a subsistence allowance for ‘incidental expenses’. MPs don’t have to submit receipts for any expenses claim, as long as the amount is less than £25. Until last year, that same limit was a staggering £250. When MPs finally get kicked out of office, they are eligible for a five-figure ‘resettlement grant’ to ‘assist with the costs of adjusting to non-parliamentary life’ that can be anything from 50% to 100% of their salary. In spite of being contractual, this is covered by a tax-free allowance for sums up to £30,000 – a break not afforded to members of the public with contractual severance clauses. The existence of this two-tier system can be traced back to 1985, when Margaret Thatcher wanted to curb public sector pay. Keen that MPs should be seen to set an example, she curbed MP pay rises but changed the rules – which had previously only allowed for claims for hotel stays or rental – to include mortgage interest. This enabled Honourable Members to play the property game – all without the inconvenience of Capital Gains Tax, of course. Tax breaks aren’t the only case of special treatment from the Revenue. MPs’ tax returns are handled by a special branch of HMRC, based in Cardiff, known as Public Department 1. Set up to deal with the files of MPs and other ‘high profile’ taxpayers, it affords special protection to the records of its charges, flagging up alerts for any unauthorised access, which usually result in disciplinary action – often dismissal – for the staff member involved. MPs also fill in a different tax return to the rest of us, specially designed for their supposedly unique status. The Chancellor’s case is the latest in a string of examples that demonstrate the different tax rules that apply to MPs. But since the Chancellor is the one that oversees the rules for the rest of us, can he really claim any legitimacy when they don’t apply to him? Graham Taylor Jun 1, 2009 Email this article Printer friendly page Previous Page
|
|
 |
||||||||||||||||||||||||
| All content © Contractor UK Limited | [Register for News Letter] | [Privacy Statement] | [Terms of Use] | [Top of Page] |