Prescott's £46k tax liability on flat
Discussion
Telegraph said:[Source: The Telegraph]
Prescott 'has £46,000 income tax liability on his Whitehall flat'
John Prescott should be paying more than a third of his ministerial salary in tax for the benefit-in-kind that he receives from living in his Government-owned flat in Whitehall, a senior tax accountant said yesterday.
The Deputy Prime Minister admitted on Thursday that he had not paid a penny in council tax on the £2.3 million flat in Admiralty House in more than eight years owing to a misunderstanding between himself and his department.
The man responsible for overseeing repeated council tax rises will now pay about £6,000 to remedy the situation. But Michael Warburton, the senior tax partner at Grant Thornton, said that Mr Prescott's council tax woes were as nothing compared with what his income tax liabilities should be.
Mr Prescott disclosed in a written answer to the Commons apologising for the council tax mistake that he paid 10 per cent of his £134,000 salary for "utilities and services" associated with the occupancy of his official residence.
But, according to Mr Warburton, that is a tiny amount compared to what he should be paying for the benefit-in-kind represented by the flat.
The three flats in Admiralty House, all occupied by Labour Cabinet ministers, are together worth about £7 million. Under current rules the tax liability on such a benefit is calculated by finding five per cent of the property's value and taxing it at 40 per cent.
The annual bill for the £2.3 million grace-and-favour residence is thus £46,000, a hefty slice of Mr Prescott's income. Added to that are expenses of running the property, such as heating and council tax if paid by the landlord.
The same tax liability should apply to the other ministerial tenants, Geoff Hoon, the Leader of the House of Commons, and Margaret Beckett, the Environment Secretary. The three escape full income tax liability on the grounds that they inhabit "official residences", but why exactly that should be so is a mystery.
According to an answer given by the Prime Minister in February 2002, the three flats in Admiralty House are by tradition assigned to senior ministers, but on what grounds is unclear. The Defence Secretary was usually one of the residents, but Mr Hoon stayed in his flat despite losing his job. Mr Warburton explained: "Unlike the Prime Minister, who is obliged to live in Downing Street, and the Foreign Secretary, who should do the same at 1 Carlton Gardens, there is no particular reason why those three ministers should inhabit Admiralty House. You only escape liability if you must live in a residence on security grounds.
"Why do these three ministers require more security than, say, the current Defence Secretary? Rules on benefits in kind are clear and there is really no reason why Mr Prescott should get away with enjoying such a huge benefit-in-kind for £13,400 in income tax when he should be paying more than £46,000." The Deputy Prime Minister was hoping to a draw a line under the council tax affair yesterday, but questions remain.
In his statement, Mr Prescott said he had "no legal obligation" to pay council tax on the flat, but Mr Warburton said that was "nonsense".
"Why doesn't he? Someone - either himself or his department - have to pay. And if the department does, then he should register that on his tax form as a benefit-in-kind".
Yesterday, a spokesman for Mr Prescott said the Deputy Prime Minister did not know of the mix-up because it was "never raised". When asked why it not been, given repeated queries from the Tories, he replied: "I don't know."
It's so good to see that this government, who got into power by claiming the Tories were corrupt and sleazy and they would be whiter and white, are sticking to their promises.
"No question, now, what had happened to the faces of the pigs. The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which." - Animal Farm by George Orwell.
>> Edited by JonRB on Saturday 14th January 20:13
We are living in a state where the ruling elite really believes itself to be beyond reproach, desereving of special consideration and entitled to many self-appointed perks. Their pensions underwritten by us taxpayers, their mistakes and incompetence underwritten by us taxpayers, their social and ideological experiments underwritten by us taxpayers and their croneyism unchecked and paid for by us taxpayers. The politicians are at one with the judiciary and the media so the only "checks and balances" are now on those they perceive a threat to the order of things.
But the poor dumb British electorate seems to want to tolerate these pigs as long as the footballs on the telly, the soap operas roll on and someone else does all the thinking and hard work, while the Sun has tits on page three and excrement on all the other pages. The media are beholden to no one but themselves as their customers will buy whatever pap they produce.
I love democracy - means I can either lump it or join a political party and climb the greasy pole.
But the poor dumb British electorate seems to want to tolerate these pigs as long as the footballs on the telly, the soap operas roll on and someone else does all the thinking and hard work, while the Sun has tits on page three and excrement on all the other pages. The media are beholden to no one but themselves as their customers will buy whatever pap they produce.
I love democracy - means I can either lump it or join a political party and climb the greasy pole.
As someone currently getting shafted by IR for benefit in kind on a rented house while I worked away from home, I find fatty two Jags somewhat hypocritical. One law for them, another for us plebs. I'm going to ask that my benefit in kind be reduced in line with Prescotts, see what they say.
I had a central london flat next to dear Ms Mowlem. It came competely free (including gas, leccy, CT and phone) and I recall the argument was that as I maintained another home up int' North and it was cheaper than them paying for a hotel to keep me in central London or to commute there was no benefit to me directly. They even had a daily cleaner.
leftie said:That's exactly what my situation was - I still had my main home, 100 miles away. The alternative was hotels, and by renting a house other people from the company could (and did) use the house as well. I paid all the bills, but had the rent paid back as expenses. IR now want to tax me on the £10k rent I was repaid, as a benefit in kind.
I had a central london flat next to dear Ms Mowlem. It came competely free (including gas, leccy, CT and phone) and I recall the argument was that as I maintained another home up int' North and it was cheaper than them paying for a hotel to keep me in central London or to commute there was no benefit to me directly. They even had a daily cleaner.
Saied said:
Just be patient, boys.
To paraphrase Nye Bevan:
"We shall be the masters [soon]"...
The Tories are masters in Norfolk. They know how to look after the POOR workers.:
http://new.edp24.co.uk/content/news/story.aspx?brand
I shell enjoy paying my increased council tax this year knowing the money is wisely spent.
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