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MPs and tax avoidance?

It appears that MPs have been consistently employing accountants to complete their expense forms and tax returns, which is, of course, perfectly reasonable.  However, it appears that the MPs have been claiming their accountants’ fees as a tax deductible cost.

Press reports indicate that HMRC disputes the deductibility, and argues that existing arrangements subsidise MP’s personal finances instead of their parliamentary work.

Tax law states that expense claims must be “wholly and exclusively” for the purposes of trade, which accountancy fees on personal tax seem to fall outside of.  This is, of course, on the basis that MP’s are trading (which may itself be debatable).

I think, for once, most people will side with HMRC.

Ultimately, though, only HMRC has the power to settle the dispute.  It is, after all, the body that interprets and enforces the tax laws. 

In view of all the rhetoric on employment I am watching with interest for the outcome.



Date: 7th September, 2012
Author: Cathy Corns


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