19 June 2009


I took this from the Sketch at the Independent:

In another corridor, a Tory MP was coming out in favour of Kitty Ussher. He was carrying a Revenue pamphlet written for MPs. "Which is your 'main residence'?" it asks. The answer is: "You can choose," and "It does not have to be your 'home' for the purposes of [Additional Cost Allowance]".

There it is. Black letter advice from HM Revenue. "Your choice is relevant for capital gains tax only." I defy any British citizen of sound mind to ignore such advice in order to pay more tax.

"MPs are the only people in Britain who are now not allowed to do this," a Labour MP said, referring to the flipping.

That's interesting...here's what Kitty Ussher said:

In her resignation letter, Ms Ussher said her actions were in line with guidance from Revenue and Customs, the Commons authorities and the firm of accountants which she had consulted.

....She added: "I did not do anything wrong....Neither have I abused the allowance system of the House of Commons in any way."

Umm, haven't you? So you buy a house on expenses, finance it, then sell it at a profit to yourself and avoid tax by 'flipping' the homes (yes, I know the 'buying' is mortgage interest only, it's still savings of 20k a year on a property you will own outright)

That looks kind of bad, and I haven't even bothered to see if she furnished this home with expenses - most of them do, what happened to the furniture? Sell it or use it, that's a personal gain from the expenses account - however this is merely my speculation so, onward --

It's true, what she did for tax purposes isn't illegal - it's a tax dodge, and we are all entitled to do that and we all would if we could

The point is not really the legality, it's basic decency, and in some (OK, most) cases moral outrage is ridiculous, in others it's perfectly reasonable

I don't think people care that their MP dodges tax, were it two of their own homes, that weren't subsidised by the state, I, at least, would not have a problem - but this, like many other cases, is taking as much as you can from your expenses to feather your own nest

Like I say, it's not illegal (I think), but it's cynical, deceptive and morally dubious - and I think people generally expect a little better of their representatives, obviously some MPs felt it was wrong as they didn't do it too

Here's the facts: Kitty buys house in Burnley as second home, therefore it is funded by ACA, Kitty re-designates this house as primary residence one month before selling it, therefore avoiding CGT and keeping the money from the sale

Within the rules, yes, legal, yes - but is it honest, is it decent? If anyone tries to tell you that MPs aren't supposed to be beyond reproach then they are lying - that's a part of the job, several have been smart enough to actually realise the situation was wrong, while others have just played along - MPs are supposed to be decent, they are not like company directors who aren't accountable to the public - they can lose their jobs for having affairs for god's sake! Surely fiddling expenses is higher up than their personal sex lives?

My view: I don't think Kitty is the devil in this, in theory if you buy a second home for work, pay the interest on expenses, then sell it - you aren't making a profit and shouldn't be paying CGT anyway - but she did make a profit and I think if you can't see the problem with creating wealth off your parliamentary expenses then you're a bit thick, the estimated figure she owed was "between £9,750 and £16,800" which is 18% of her 'gain' - meaning she made a profit of £54,000 - £92,000 on that property - she has no right to be taking a profit off a home we contributed a similar amount to, and then she dodges the tax on her 'profit' that we funded...

in all honesty there are far worse cases than this, the system should work in a much better way (such as at least preventing profiteering off the ACA by taking capital back)

So yeah, people should make up their own minds if that was acceptable behaviour

*Also, her husband just so happens to be an accountant...I wonder which firm was hired

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