It’s time to examine some consciences when it comes to MPs’ dodgy expense claims, says Simon Sweetman.

The current brouhaha about expenses seems to consist very largely of one body of people known to have interesting views about legitimate expenses claims (journalists) about another body that seems to take a similarly broad approach.

There are two questions to asked from a tax point of view; one regarding the expenses claims and the other on the matter of CGT elections for MPs’ ‘main residence’. (Also, as an aside to the CGT issue, why does everyone refer to the ‘principal private residence’ when the statute never uses that term?)

First of all, it’s time for examining consciences. If you were advising a member of parliament on his or her expenses, would you have told them to tone it down, given that the great majority of the claims seem to have been within the rules? (Bear in mind, of course, that they would not have expected them to be leaked with such enthusiasm and become public knowledge). As accountants, we make it a matter of honour to stay within the rules, whilst extracting the maximum level of mileage we can.

Most certainly I think all of us would have been (or tried to be) on the ball on the matter of CGT and the main residence election, including the practice now known as ‘flipping’. In most cases MPs will fit into the most likely scenario here, having a home in the country (in their constituency, one might hope) and a pied a terre in London. It may be that Ms Blears will write to HMRC offering to pay CGT only to be told that there is no liability after all.

We have to accept that there is a very significant cost associated with having to work in London during the week if you home is beyond reasonable commuting distance (and there must still be a hangover from the days when the House of Commons kept such hours as to make commuting impossible). The cost of living in London has risen enormously year on year, and if MPs had to rely on their salaries alone the cost of maintaining two properties and commuting weekly would be hard to meet. Not all MPs have another income and for that matter, not all MPs are likely to be in a position to pay it all back, except for the wealthy (or the Conservative front bench, as they are known).

From what has come out, there is very little that appears fraudulent (although lines such as, “Oh, I don’t have time to attend to the details” sound familiar). However, MPs have joined in gleefully with the practice of claiming every last possible item, and accidentally a few others as well. It’s clear that this is meeting with extreme public disfavour. Some of that is hypocritical (i.e. you can claim what you want as long as nobody finds out), but I think it is indicative of the public’s mood, as it is fast losing tolerance for creative finance, including tax planning.