MPs' expenses: ministers not exempt from tax laws

Day 20 of the MPs' expenses scandal and HMRC have been forced to confirm that they are pursuing potential irregularities in MPs' tax returns. At least this is what some of the media are reporting.

Today's Daily Telegraph notes that HMRC confirmed that MPs were not exempt from tax laws and that tax must be paid on some expenses. In a statement it said:

“It’s a general principle of tax law that accountancy fees incurred in connection with the completion of a personal tax return are not deductible.

“This is because the costs of complying with the law are not an allowable expense against tax. This rule applies across the board.”

It now seems that more than 40 Ministers claimed and received reimbursement of accountancy fees as part of their Parliamentary allowances.

In recent posts on the TaxBuzz blog I have explained:

• The Green Book guidance that seems to allow such claims to be made
• The tax rules that make clear that such expenses are not deductible for tax purposes
• Why I consider it likely that Ministers will owe tax on their accountancy fee claims
  
• The tax rules that enable only self employed people to 'Do a Darling' and claim tax relief for their accountancy fees
• The tax questions that have yet to be asked and answered about the MPs' expenses scandal
  

I have also set up a specific page that contains links to the key formal guidance on such matters, including the current and previous editions of the Green Book, the HMRC guidance booklet "MPs, ministers and tax" and also The June 2008 report of the Members Estimate Committee which led to the latest edition of the Green Book.

Previous posts here on the subject address:

• MPs, Ministers and their expenses claims for accountants' fees
• MPs claiming tax relief for tax advice from an MP's spouse
• MPs' expenses - the Chancellor's claim for help with his tax returns
• MPs' expenses - The tax questions that have yet to be addressed
• Hazel Blears and Gordon Brown - a genuine gesture or deliberately deceptive?
• Tax Advice Network on BBC - twice in two days
• Flipping properties - avoiding CGT when you have more than one main residence