MPS are using a tax loophole to avoid paying tens of thousands of pounds when they sell their taxpayer-subsidised London homes, it was claimed yesterday.
The wheeze – which is entirely legal – allows MPs to nominate whichever home they wish as their "main home". Because their second home is usually in London, where property is pricier, they can avoid capital gains tax of up to 40 per cent by telling t
he Inland Revenue it is their primary residence. Main homes are exempt from the tax.
Over 100 MPs are believed to have declared their constituency home as their second home. Under the Commons' allowance rules MPs are allowed to claim up to £24,000 in expenses to cover rent or mortgage repayments – known as the Commons Additional Costs Allowance (ACA).
Yesterday, it was revealed that some MPs tell Her Majesty's Revenue and Customs that the second home on which they claimed the ACA is their main home.
John Mann, the Labour backbencher and MP for Bassetlaw, yesterday said it was time to blow the whistle on the tax dodge.
He added: "This is the really big fiddle and one that is quite legal. Parliament allows itself the luxury of this preferential tax treatment and the MPs' Estimates Committee scandalously ignores this well-known scam."
Mr Mann called for the loophole to be closed on Thursday, when MPs are due to vote on a stricter expenses regime. Mark Field, a Conservative MP for Cities of London and Westminster, described it as a "total fiddle".
The full article contains 265 words and appears in The Scotsman newspaper.
