Sunday, May 31, 2009

Ten more tax questions re the MP's expenses scandal (total 25 now)

Two weeks ago I set out 15 tax questions that have yet to be addressed in connection with this scandal. The story continues with more revelations every day and more tax issues too.

I have now identified ten further tax related questions that warrant answers:

16. Who instructed 'officials' to shred details of Tony Blair's expenses?
We learned last year that Tony Blair's expenses and receipts had been shredded. Such records were relevant to his tax position in so far as any reimbursements were excessive. They would also have revealed how far he had personally exploited the 'rules' on MPs expenses. Employers are required to retain all relevant business records for 6 years, so on what authority could any 'officials' have considered it reasonable to shred the papers in question? Are there any available details of his expense claims and reimbursements?

17. Who gave the fees office authority to ignore the principled guidance in the earlier sections of the Green Book? And what chance Gordon Brown's new initiative to insist on compliance with a NEW code of conduct? The rules were there and were broken by the very guidance that was supposed to protect them. The distinction as between the principles at the front of the Green Book and the detailed guidance as to what can be claimed are quite stark.

18. Were MPs tax returns' at the same risk of an HMRC enquiry as other taxpayers?
Stories abound of how HMRC have routinely processed MPs' tax returns with only a cursory review. Statistically were enquiries opened into MPs' tax returns more or less frequently than those of other taxpayers? Were ANY random enquiries opened into MPs' tax returns in recent years? Were ANY full enquiries undertaken into any MPs' tax returns in recent years?

19. If not, why not? If yes, why has the risk of enquiries not deterred them from excessive claims?
I have long believed that cut backs and reductions in the number of enquiries reduce the general level of compliance. If however MPs were sharing stories about how HMRC was questioning dubious claims on their tax returns this would reduce the temptation to 'cheat' or to plan upto the edge (and the same would be true for taxpayers generally).

20. Have MPs been subject to a more lax tax enforcement regime than 'ordinary taxpayers'?
This continues from the last 2 questions. If 'yes' - then on whose authority or instructions? If 'no' - can this be proven somehow?

21. Who decides which reimbursed expenses should appear as taxable benefits on the forms P11d given to MPs?
If it's the fees office then they are culpable - but on whose instructions and guidance did they operate?

22. Have such decisions been made objectively and in accordance with the same rules that apply to all other directors and employees?
The simple answer here seems to be 'no' - again we need to know on whose instructions and guidance has this situation evolved?

23. Who will decide whether any MPs should be subject to criminal prosecution in accordance with Parliament's own policy on the criminal prosecution of tax evaders?
This would be as distinct from any criminal prosecution for fiddling their expenses per se.

24. Will HMRC utilise their new contentious power to visit any 'business' premises to visit the Fees office to check all salient information that should have been disclosed?
HMRC presumably now has the power to visit the Fees office in the House of Commons under Schedule 36 Finance Act 2008. Part 2 included new powers for any officer of HMRC to enter into business premises to inspect....business documents...if such an inspection is 'reasonably required for the purpose of checking the tax position of any person'. I've written about such powers on the TaxBuzz blog in the past, here and here.

25. Is there a way to secure answers to these tax related questions and for such answers to be placed on the public record, short of a formal commission or enquiry?

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