MPs - expenses or allowances? Do they pay income tax on it?
Discussion
The MPs are claiming over £100k each on allowances and expenses.
DO they need to pay income tax on it?
According to HMRC:
Travelling and subsistence payments
Include as income (box 5.4) unless
Wholly, exclusively and necessarily incurred in the performance of the duties of the claimant’s employment.
So, how much of the £££ have they declared on their P11Ds as Benefits in kind?
repairs, gardening, etc etc - not needed for the performance of duties.
Cough up the tax you frauds!
DO they need to pay income tax on it?
According to HMRC:
Travelling and subsistence payments
Include as income (box 5.4) unless
Wholly, exclusively and necessarily incurred in the performance of the duties of the claimant’s employment.
So, how much of the £££ have they declared on their P11Ds as Benefits in kind?
repairs, gardening, etc etc - not needed for the performance of duties.
Cough up the tax you frauds!
Spiritual_Beggar said:
dazren said:
No they do not.
Which makes that whole speech Brown made about; "the Rich can give more to help the country out of the recession" even harder to swallow.
What they are doing is earning (in very real terms) over £150k per year, and paying tax only on their £60k earnings. They seem to think that tax payers money is their own personal petty cash box!As labour love pointing out - "it's only fair that the high earners who have done well in the good times now contribute a little more when times are difficult"
And they said this with a straight face!
chris watton said:
Spiritual_Beggar said:
dazren said:
No they do not.
Which makes that whole speech Brown made about; "the Rich can give more to help the country out of the recession" even harder to swallow. What they are doing is earning (in very real terms) over £150k per year, and paying tax only on their £60k earnings. They seem to think that tax payers money is their own personal petty cash box!As labour love pointing out - "it's only fair that the high earners who have done well in the good times now contribute a little more when times are difficult"
And they said this with a straight face!
esselte said:
chris watton said:
Spiritual_Beggar said:
dazren said:
No they do not.
Which makes that whole speech Brown made about; "the Rich can give more to help the country out of the recession" even harder to swallow. What they are doing is earning (in very real terms) over £150k per year, and paying tax only on their £60k earnings. They seem to think that tax payers money is their own personal petty cash box!As labour love pointing out - "it's only fair that the high earners who have done well in the good times now contribute a little more when times are difficult"
And they said this with a straight face!
Edited by andy ted on Wednesday 13th May 11:31
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Sadly you cant fill in the online form as their SSL certificate has expired... DOH!
HMRC is committed to targeting tax evasion. We know some people don't pay their fair share of tax, which is unfair for the rest of us. Now you can help us do something about it.
The Tax Evasion hotline deals with income tax, corporation tax, capital gains tax, inheritance tax, VAT and National Insurance.
The Hotline can take your call on 0800 788 887 (Lines are open Monday to Friday 8am to 8pm, Saturday and Sunday 8am to 4pm), or you can submit a report here.
No information - however trivial it may seem -is too small. It could be the key to stopping fraudulent or criminal activity.
Sadly you cant fill in the online form as their SSL certificate has expired... DOH!
Edited by tegwin on Wednesday 13th May 11:34
Don't get too hung up on the CGT issue. Essentially, they have been making the same claims any taxpayer can make regarding designation of second homes as "Principal Private Residence". This allows any gain on that property to be exempted from CGT. If people make too much of a fuss about THIS particular point, you might find that this particular tax relief is abolished for EVERYBODY. This would not be good.
What IS galling is the fact that any costs they incurred in redeveloping second homes have been paid for directly by you and me - thereby contributing to any capital gain realised when the property was eventually sold.
And the fact that this money was paid to them without being subject to Income Tax or National Insurance.
What IS galling is the fact that any costs they incurred in redeveloping second homes have been paid for directly by you and me - thereby contributing to any capital gain realised when the property was eventually sold.
And the fact that this money was paid to them without being subject to Income Tax or National Insurance.
Eric Mc said:
Don't get too hung up on the CGT issue. Essentially, they have been making the same claims any taxpayer can make regarding designation of second homes as "Principal Private Residence". This allows any gain on that property to be exempted from CGT. If people make too much of a fuss about THIS particular point, you might find that this particular tax relief is abolished for EVERYBODY. This would not be good.
What IS galling is the fact that any costs they incurred in redeveloping second homes have been paid for directly by you and me - thereby contributing to any capital gain realised when the property was eventually sold.
And the fact that this money was paid to them without being subject to Income Tax or National Insurance.
I don't normally quote myself but on Accountancy.web, tax expert Rebecca Bennyworth is raising the spectre of what might happen to the CGT "Second Home" exemption because of the MPs' abuses. Don't shout too much folks or we could all end up losing out.What IS galling is the fact that any costs they incurred in redeveloping second homes have been paid for directly by you and me - thereby contributing to any capital gain realised when the property was eventually sold.
And the fact that this money was paid to them without being subject to Income Tax or National Insurance.
Edited by Eric Mc on Wednesday 13th May 13:09
That's the attitude that Bennyworth (and me too) is worried about.
Capital Gains legislation has always allowed those who own more than one property to elect which property was their main residence - within some limits. By making this election, it could mitigate or wipe out a potential CGT liability iuf and when the property was sold (or disposed of in some other way).
MPs have just been making use of a fairly general tax rule - open to all.
Those who only own one property have no worries at all - as it is obvious that their one property is their main residence. Or perhaps not - as sometimes can be the case. There are circumstances when your one and only property may not be where you live and you could find that it might become chargeable to CGT on disposal.
So, don't jump up and down too much on this score as you could be flagging to the tax rule makers that the general consenus is that all CGT exemptions on property disposals should be abolished - for everybody.
Capital Gains legislation has always allowed those who own more than one property to elect which property was their main residence - within some limits. By making this election, it could mitigate or wipe out a potential CGT liability iuf and when the property was sold (or disposed of in some other way).
MPs have just been making use of a fairly general tax rule - open to all.
Those who only own one property have no worries at all - as it is obvious that their one property is their main residence. Or perhaps not - as sometimes can be the case. There are circumstances when your one and only property may not be where you live and you could find that it might become chargeable to CGT on disposal.
So, don't jump up and down too much on this score as you could be flagging to the tax rule makers that the general consenus is that all CGT exemptions on property disposals should be abolished - for everybody.
Eric Mc said:
That's the attitude that Bennyworth (and me too) is worried about.
Capital Gains legislation has always allowed those who own more than one property to elect which property was their main residence - within some limits. By making this election, it could mitigate or wipe out a potential CGT liability iuf and when the property was sold (or disposed of in some other way).
MPs have just been making use of a fairly general tax rule - open to all.
Those who only own one property have no worries at all - as it is obvious that their one property is their main residence. Or perhaps not - as sometimes can be the case. There are circumstances when your one and only property may not be where you live and you could find that it might become chargeable to CGT on disposal.
So, don't jump up and down too much on this score as you could be flagging to the tax rule makers that the general consenus is that all CGT exemptions on property disposals should be abolished - for everybody.
Is this not missing the point? My understanding was that MPs have used "flipping" to gain maintenance and refurbishment expenses on their second home as the second home was required for them to carry out their duties.Capital Gains legislation has always allowed those who own more than one property to elect which property was their main residence - within some limits. By making this election, it could mitigate or wipe out a potential CGT liability iuf and when the property was sold (or disposed of in some other way).
MPs have just been making use of a fairly general tax rule - open to all.
Those who only own one property have no worries at all - as it is obvious that their one property is their main residence. Or perhaps not - as sometimes can be the case. There are circumstances when your one and only property may not be where you live and you could find that it might become chargeable to CGT on disposal.
So, don't jump up and down too much on this score as you could be flagging to the tax rule makers that the general consenus is that all CGT exemptions on property disposals should be abolished - for everybody.
The assumption being that they couldn't gain expenses on their family home as that was their private residence.
Some MPs have allegedly "flipped" their houses to gain renovation expenses on their two properties, not only making a mockery of the tax payer by making them pay for such things as swimming pool maintenance, but then changing the designation of their houses so that they can scew money out of the tax payer to do up two houses.
That's a separate issue from flipping for CGT purposes, which is open to all.
Edited by youngsyr on Wednesday 13th May 15:07
The CGT isue was a beneficial by-product of their "flipping". As i said, it is a tax break available to EVERYONE who has the opportunity to do it.
The REAL reason for MPs "flipping" was so that they could obtain tax free funds in the form of allowances and expenses in order to improve and upgrade their "second homes". THAT is the practice which is morally (if not legally) wrong and it is this which people need to concentrate on.
We don't want to create such a fuss over any CGT savings they made as it could backgfire on the general population.
The REAL reason for MPs "flipping" was so that they could obtain tax free funds in the form of allowances and expenses in order to improve and upgrade their "second homes". THAT is the practice which is morally (if not legally) wrong and it is this which people need to concentrate on.
We don't want to create such a fuss over any CGT savings they made as it could backgfire on the general population.
Eric Mc said:
The CGT isue was a beneficial by-product of their "flipping". As i said, it is a tax break available to EVERYONE who has the opportunity to do it.
The REAL reason for MPs "flipping" was so that they could obtain tax free funds in the form of allowances and expenses in order to improve and upgrade their "second homes". THAT is the practice which is morally (if not legally) wrong and it is this which people need to concentrate on.
We don't want to create such a fuss over any CGT savings they made as it could backgfire on the general population.
To be honest Eric,I'm not sure it'd bother 80% of the population....The REAL reason for MPs "flipping" was so that they could obtain tax free funds in the form of allowances and expenses in order to improve and upgrade their "second homes". THAT is the practice which is morally (if not legally) wrong and it is this which people need to concentrate on.
We don't want to create such a fuss over any CGT savings they made as it could backgfire on the general population.
It might be more relevant in the future as families begin to inherit properties from that generation who bought their houses. Don't forget, property ownership rocketed from the 60s onwards and that generation is now going to start dying off. Their children will end up with second properties (and only some will have to worry about Inheritance Tax) and any CGT savings possibilities need to be retained.
Eric Mc said:
It might be more relevant in the future as families begin to inherit properties from that generation who bought their houses. Don't forget, property ownership rocketed from the 60s onwards and that generation is now going to start dying off. Their children will end up with second properties (and only some will have to worry about Inheritance Tax) and any CGT savings possibilities need to be retained.
Excuse my ignorance but is CGT payable as well as IHT on someone's death?Not normally at the point of death but CGT issues can arise later.
When the property is inherited, it becomes the beneficiary's property and will, in many cases, become a second property. The beneficiary is deemed to have acquired the property at its market value on the date of death of the original owner. Later, if the property is sold, any gains arising when the sale price is compared to that market value will be potentially liable to Capital Gains Tax.
Matters can become even more complicted if there are more than one beneficiaries.
When the property is inherited, it becomes the beneficiary's property and will, in many cases, become a second property. The beneficiary is deemed to have acquired the property at its market value on the date of death of the original owner. Later, if the property is sold, any gains arising when the sale price is compared to that market value will be potentially liable to Capital Gains Tax.
Matters can become even more complicted if there are more than one beneficiaries.
Edited by Eric Mc on Wednesday 13th May 16:37
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