Questions
Asked by
To ask Her Majesty's Government whether, following the alleged statement by HM Revenue and Customs quoted in the Daily Telegraph on 27 May that “MPs are not exempt from tax laws, and tax must be paid on some expenses”, parliamentarians must pay tax on benefits in kind. [HL4009]
To ask Her Majesty's Government whether there is any legislation under which parliamentarians have received expenses tax-free. [HL4010]
To ask Her Majesty's Government whether parliamentarians have always had to pay tax on benefits in kind; and, if not, why. [HL4011]
To ask Her Majesty's Government how MPs' benefits in kind were taxed before the guidance issued to MPs by HM Revenue and Customs in 2005. [HL4014]
MPs are taxable on the earnings from their position as MP, and, generally, on the benefits and expenses they receive. Certain expenses that they claim, in particular the expense allowance for the costs of overnight accommodation away from their home to enable them to carry out their parliamentary duties, are exempt from tax under specific legislation introduced in 1984 and are therefore not required to be reported to HMRC. Other expense payments are subject to the usual rules on the taxation of employment income. A deduction can then be claimed, again according to the usual tax rules, for expenses which MPs incur wholly, exclusively and necessarily whilst performing their duties as an MP, or for expenses which they have to incur on travelling whilst performing those duties. HMRC updates its guidance to MPs at the start of each new Parliament.
Asked by
To ask Her Majesty's Government how HM Revenue and Customs differentiates between professional fees related to preparation of tax returns, and any charges for general work related to business affairs, for the purposes of taxing parliamentarians. [HL4013]
Under the general rules on deductibility of expenses for tax purposes, accountancy fees will be eligible for tax relief where they are incurred for business purposes or are necessary in performing the duties of an employment or office. Fees for the completion of a tax return would not be allowable, as they are incurred to enable the individual to meet their personal obligations as a taxpayer.