HMRC step in

The Labour Ministers who claimed the cost of their accountancy/taxation advice on expenses may have a problem. It seems that Her Majesty's Revenue and Customs have declared that:

"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."

Quite clear but maybe MPs thought they had an exemption? Nice try but HMRC issued a guide to all MPs in 2005 "MPs, Ministers and tax" which gave specific guidance to MPs and Ministers and prohibited such tax- free claims, which accountants say constitute a "benefit in kind" and should be taxed. The booklet states very clearly that: "accountancy fees incurred in the preparation of the self assessment tax return or related expense claims... not allowed" as tax expenses.

It is rumoured that HMRC are looking to launch investigations into the tax affairs of some Labour Ministers.


As an aside; when I awoke this morning to hear nothing on the Today programme about the Telegraph's expenses story I assumed that today must be a bad day for Labour. I was right... In fact it seems that I missed the whole three minutes the Today programme allocated to the story at 07:12

"Revenue officials are investigating whether MPs have broken the law by not paying tax after claiming personal accounting costs on expenses, the BBC understands. David Gardner, a former assistant general secretary of the Labour Party, discusses a Labour committee set up to look into the expenses scandal. "

Slightly less emphasis than the Today programme have used on moats etc.