HMRC Is Shite

HMRC Is Shite
Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.

Thursday, 14 May 2009

Snouts in The Trough - No Special Rules For MPs

From the horse's mouth (HMRC) itself:

"There are no special capital gains tax rules covering MPs' homes."

Does this mean that MP's, in the event that they have underpaid tax, may expect a tax investigation going back several years? That is what would happen to the rest of us, were we to find ourselves in this situation.

It would be a salutary lesson for the people who gave HMRC its extra powers, and who politicised it, to be on the receiving end of one of its investigations. It might even bring MPs closer to the people!

I assume that the offending MPs will be named and shamed by HMRC!

Source The Times:

"Was HM Revenue & Customs warned several years ago that MPs were playing fast and loose with the tax system as regards their homes? So claims Thomas Casagranda, an HMRC employee, who says that he highlighted for his local compliance team the use of second homes by MPs and whether this should be taxed. "My idea was instantly shot down in flames by a manager and I was told that if I looked at a local MP’s tax returns, I would face conduct and disciplinary procedures."

As Ken Frost, a long-time critic of the taxman who drew Casagranda's letter to my attention, points out, if the profits from second homes are not taxable, then repayments by Blears et al would be a tax overpayment. If they are taxable, then they owe interest and fines.

The HMRC ducks the issue. "We cannot discuss identifiable individuals' tax affairs. The capital gains tax relief for people’s homes applies to only one residence at any one time," they tell me. "More than one home can qualify for relief at the same time but it will completely depend on the facts of the case. There are no special capital gains tax rules covering MPs' homes

Tax does have to be taxing.

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  1. "It would be a salutary lesson for the people who gave HMRC its extra powers, and who politicised it, to be on the receiving end of one of its investigations"

    Nothing would make me happier.

    The public are furious! This is political justice getting what it deserves.

  2. Whilst there are, indeed, no special CGT rules for MPs, it is important not to conflate different issues here as some people seem to be doing, e.g., the idiotic Blears.

    What is outrageous is not that MPs have taken advantage of the CGT rules (plenty of non MPs have also done so over the years) but that the MPs have been doing so with public money. People seem to be objecting to the non payment of tax on the profit, whereas the issue might more correctly be stated as an objection to the fact that they have been profiting from public subsidy per se. The taxability, or otherwise, of that profit is not the objectionable factor.

    Blears offering up the "tax" shows her to be nothing short of a cretin (and a cretinous solicitor no less). If she was do anything logical, she would have had to offer a cheque for the entirety of the profit and not just the "CGT" thereon.

    I fear that, without stripping the argument down to its component parts, there will be a knee jerk reaction and a change in the CGT rules, and consequently many ordinary people will suffer in the future as a result of the MPs abuses not of the CGT rules but of their application of public money.

  3. As andrew Brooks mentions expect a knee jerk reaction on many levels, an excuse to bring in a private accountants to audit at an unkown cost when we have a perfectly good audit office - great financial management.
    My biggest astonishment however is that everyone is so shocked by this its been public knowledge for ages that this has been going on and just because a paper has forgotten about Lady Di for 5 mins makes it news says more about commentators bein not upto the job.
    If as Ken says about politization, of not just HMRC but the wider civil service then expect corruption and dont complain after when you celebrate cuts and claims of savings the reality will be a lot worse than you thought but you will never hear about until it is too late