Simple answer to the scandalous amount of money MP’s claim in mortgage/rent to be in parliament when they can be ar#ed . Build a block of bed-sits for MP’s use when they are voted in. Or…. Put them up in a Barge in the Thames, it’s claimed to be good enough for migrants.
I’m guessing 10 or 11 Downing St isn’t claimed for in expenses? ( unless you need gold wallpaper or curtains) Similar to staying in a Premier inn instead of The Ritz.
Leaving to 1 side whether that would result in improving the quality of MPs. That would cost rather a lot of money.
Firstly, the cheapest bedsit within walking distance of Parliament is about £250k. Typical price? About £2 million. Good luck in getting Planning Permission for the Westminster "H" Block-in news that will surprise no-one, billionaires have quite good lawyers
Then factor in the enormous cost of making a Terrorist's Wet Dream safe. And the legal actions from all the neighbours...
Of course you are entitled to your opinion. Whenever opinion relates to personal views, it is open to debate.
So-for example-if you believe that the current Rules should be reviewed-you are perfectly entitled to that opinion. FWIW I agree. all Rules like this should be periodically reviewed.
Where we fundamentally disagree is whether current MPs are doing anything wrong-whether that is legally or "morally" (love the idea that Journalists should be the arbiter of Morality).
I disagree that MPs should be prevented from claiming at least 1 of Mortgage/Rent when there is a need for 2 homes to carry out their work. And, while the various papers point their fingers at just one Party, they are doing so purely for political purposes. Likewise, in news that should surprise absolutely nobody, a former head of something believes he could do the job better than the person currently doing his old job.
It would be impossible to force all MPs to pay for their 2nd homes. But it would certainly not be impossible to change the Rules, so that the Taxpayer gets better value for money. New Rules could include:-
1. All people claiming for Housing costs must have being an MP as their main source of paid employment.
I gave the example of Sir Geoffrey Cox before. I believe it is the case that every year he earns rather more as a Barrister than as an MP. On occasion, 10 times more. He has also claimed for the cost of renting a London apartment from the taxpayer. He is doing nothing "wrong" under current rules. But, surely, his main reason for needing a London base is not to be an MP. Same for various people moonlighting at GB News
2. There should be a minimum number of days sitting in Parliament to qualify
At present, there is nothing to stop someone claiming this expense without ever attending Parliament. To use Sinn Fein as an example. Their MPs never attend. And, to be fair to them, they currently claim neither salary or housing costs. Point is, they could under current rules
3. The area that qualifies as "commutable" (thus barring such claims) should be expanded
There was a time when MPs were expected to regularly attend Parliament until Stupid o'clock. Which is why it is only London MPs who are restricted in what they can claim. That does not happen now. So what is "commutable" is more than it once was. As an example, the former MP for Chelmsford was able to claim large amounts. Whereas thousands of commuters do that journey every day. It takes less than an hour.
I dont disagree with very much of that at all.
Maybe a qualifying criteria in respect of the selection of an MP should be that they actually live in the constituency that they plan to represent.
As far as Pat McFadden is concerned, the phrase that has been used in many of the articles is that he did not act within the spirit of the rules. I agree with this, in respect of any MP, irrespective of which party they represent. Had he immediately put his property up for sale, and rented another property once the property was sold, nothing would have been said.
Simple answer to the scandalous amount of money MP’s claim in mortgage/rent to be in parliament when they can be ar#ed . Build a block of bed-sits for MP’s use when they are voted in. Or…. Put them up in a Barge in the Thames, it’s claimed to be good enough for migrants.
I’m guessing 10 or 11 Downing St isn’t claimed for in expenses? ( unless you need gold wallpaper or curtains) Similar to staying in a Premier inn instead of The Ritz.
I think we can all agree that the situation is open to abuse and gets abused. The whole MP's expenses scandal is caused by the fact that MPs are woefully underpaid. They are running the country yet the basic salary for an MP (from April 2024) is £91,346, to put that into context there are, apparently, more than 38,000 public employees earning more than £100,000 per annum, £38,000!
I think it was Maggie Thatcher that introduced the expenses as she couldn't get away with increasing the MP's basic salary to the level that it should have been.
Oh and on Phil's company car example company cars are taxed as a benefit in kind, I have no idea if MP's rent payments are also taxed as a benefit in kind, if so then they (we) are effective only paying 60% of their rent.
Finally, Nationwide's House Price Index shows that a property in Wolverhampton bought in 2006 for £160,000 should have been worth £188,000 when he sold it in Nov 2017, apparently he sold it for £147,000. Maybe it was massively down valued due to the neighbours!
I think we can all agree that the situation is open to abuse and gets abused. The whole MP's expenses scandal is caused by the fact that MPs are woefully underpaid. They are running the country yet the basic salary for an MP (from April 2024) is £91,346, to put that into context there are, apparently, more than 38,000 public employees earning more than £100,000 per annum, £38,000!
I think it was Maggie Thatcher that introduced the expenses as she couldn't get away with increasing the MP's basic salary to the level that it should have been.
Oh and on Phil's company car example company cars are taxed as a benefit in kind, I have no idea if MP's rent payments are also taxed as a benefit in kind, if so then they (we) are effective only paying 60% of their rent.
Finally, Nationwide's House Price Index shows that a property in Wolverhampton bought in 2006 for £160,000 should have been worth £188,000 when he sold it in Nov 2017, apparently he sold it for £147,000. Maybe it was massively down valued due to the neighbours!
I'm not (and thankfully never will be) an Accountant. But I think it is the case that these house payments are exempt from being regarded as a qualifying Benefit in Kind. There is an exemption for where-
"• Your employees cannot do their work properly without it, for example agricultural workers living on farms. • An employer is usually expected to provide accommodation for people doing certain types of work, for example a manager living above a pub or a vicar looking after a parish. • If you need to provide accommodation to protect an employee because the type of work they do means there’s a special threat to their security."
That is why there is only assistance payable for the 2nd property-not the 1st
In relation to the "loss" on the Wolverhampton property. Simple fact is that a Property owned/lived in by an Owner-Occupier generally is worth more than 1 that has had Tenants in. There is (rightly or wrongly) a perception that Owners look after properties better than Tenants (or Landlords)
'In relation to the "loss" on the Wolverhampton property. Simple fact is that a Property owned/lived in by an Owner-Occupier generally is worth more than 1 that has had Tenants in. There is (rightly or wrongly) a perception that Owners look after properties better than Tenants (or Landlords)'
Then he could probably have got more by ending the tenancy agreement and selling as vacant possession. Or maybe he had made massive capital gains elsewhere and could offset the loss against those? We'll never know but I suspect the loss he made wasn't particularly devastating to him. I do like the idea that it was down valued due to the local MP renting the next door property though, now that would be karma!
Simple answer to the scandalous amount of money MP’s claim in mortgage/rent to be in parliament when they can be ar#ed . Build a block of bed-sits for MP’s use when they are voted in. Or…. Put them up in a Barge in the Thames, it’s claimed to be good enough for migrants.
I’m guessing 10 or 11 Downing St isn’t claimed for in expenses? ( unless you need gold wallpaper or curtains) Similar to staying in a Premier inn instead of The Ritz.
Leaving to 1 side whether that would result in improving the quality of MPs. That would cost rather a lot of money.
Firstly, the cheapest bedsit within walking distance of Parliament is about £250k. Typical price? About £2 million. Good luck in getting Planning Permission for the Westminster "H" Block-in news that will surprise no-one, billionaires have quite good lawyers
Then factor in the enormous cost of making a Terrorist's Wet Dream safe. And the legal actions from all the neighbours...
Nice to think about it. But not going to happen
Fair point about terrorists Phil.
Maybe a few HMO’s would better suit, scatter them about a bit.
I can’t get my head round cost tbh, it seems at present if MP’s claim for mortgage payments surely when they ‘move out’ of the property the house( or money gained when house goes up in price) belongs to the taxpayer, or am I missing something?
Surely the MP doesn’t pocket the dosh, that’d be criminal wouldn’t it…
I would suggest it would improve the quality of MP’s Phil, because it would discourage the ones in it to make money out of second homes, and encourage ones who are passionate about making the Country a better place.
I think we can all agree that the situation is open to abuse and gets abused. The whole MP's expenses scandal is caused by the fact that MPs are woefully underpaid. They are running the country yet the basic salary for an MP (from April 2024) is £91,346, to put that into context there are, apparently, more than 38,000 public employees earning more than £100,000 per annum, £38,000!
I think it was Maggie Thatcher that introduced the expenses as she couldn't get away with increasing the MP's basic salary to the level that it should have been.
Oh and on Phil's company car example company cars are taxed as a benefit in kind, I have no idea if MP's rent payments are also taxed as a benefit in kind, if so then they (we) are effective only paying 60% of their rent.
Finally, Nationwide's House Price Index shows that a property in Wolverhampton bought in 2006 for £160,000 should have been worth £188,000 when he sold it in Nov 2017, apparently he sold it for £147,000. Maybe it was massively down valued due to the neighbours!
Simple answer to the scandalous amount of money MP’s claim in mortgage/rent to be in parliament when they can be ar#ed . Build a block of bed-sits for MP’s use when they are voted in. Or…. Put them up in a Barge in the Thames, it’s claimed to be good enough for migrants.
I’m guessing 10 or 11 Downing St isn’t claimed for in expenses? ( unless you need gold wallpaper or curtains) Similar to staying in a Premier inn instead of The Ritz.
Leaving to 1 side whether that would result in improving the quality of MPs. That would cost rather a lot of money.
Firstly, the cheapest bedsit within walking distance of Parliament is about £250k. Typical price? About £2 million. Good luck in getting Planning Permission for the Westminster "H" Block-in news that will surprise no-one, billionaires have quite good lawyers
Then factor in the enormous cost of making a Terrorist's Wet Dream safe. And the legal actions from all the neighbours...
Nice to think about it. But not going to happen
Fair point about terrorists Phil.
Maybe a few HMO’s would better suit, scatter them about a bit.
I can’t get my head round cost tbh, it seems at present if MP’s claim for mortgage payments surely when they ‘move out’ of the property the house( or money gained when house goes up in price) belongs to the taxpayer, or am I missing something?
Surely the MP doesn’t pocket the dosh, that’d be criminal wouldn’t it…
They are no longer able to claim the mortgage interest. That was precisely the reason for the rule change. Stopping MPs building a property portfolio paid for by the taxpayer. He exploited a loophole. The taxpayer paid the rent of the next door property. Having paid the mortgage on his property for 6 years. While the rent on his own property covered the mortgage.
The value of his London property has increased by almost a million quid, since he bought it in 2009.
Simple answer to the scandalous amount of money MP’s claim in mortgage/rent to be in parliament when they can be ar#ed . Build a block of bed-sits for MP’s use when they are voted in. Or…. Put them up in a Barge in the Thames, it’s claimed to be good enough for migrants.
I’m guessing 10 or 11 Downing St isn’t claimed for in expenses? ( unless you need gold wallpaper or curtains) Similar to staying in a Premier inn instead of The Ritz.
Leaving to 1 side whether that would result in improving the quality of MPs. That would cost rather a lot of money.
Firstly, the cheapest bedsit within walking distance of Parliament is about £250k. Typical price? About £2 million. Good luck in getting Planning Permission for the Westminster "H" Block-in news that will surprise no-one, billionaires have quite good lawyers
Then factor in the enormous cost of making a Terrorist's Wet Dream safe. And the legal actions from all the neighbours...
Nice to think about it. But not going to happen
Fair point about terrorists Phil.
Maybe a few HMO’s would better suit, scatter them about a bit.
I can’t get my head round cost tbh, it seems at present if MP’s claim for mortgage payments surely when they ‘move out’ of the property the house( or money gained when house goes up in price) belongs to the taxpayer, or am I missing something?
Surely the MP doesn’t pocket the dosh, that’d be criminal wouldn’t it…
They are no longer able to claim the mortgage interest. That was precisely the reason for the rule change. Stopping MPs building a property portfolio paid for by the taxpayer. He exploited a loophole. The taxpayer paid the rent of the next door property. Having paid the mortgage on his property for 6 years. While the rent on his own property covered the mortgage.
The value of his London property has increased by almost a million quid, since he bought it in 2009.
I think we can all agree that the situation is open to abuse and gets abused. The whole MP's expenses scandal is caused by the fact that MPs are woefully underpaid. They are running the country yet the basic salary for an MP (from April 2024) is £91,346, to put that into context there are, apparently, more than 38,000 public employees earning more than £100,000 per annum, £38,000!
I think it was Maggie Thatcher that introduced the expenses as she couldn't get away with increasing the MP's basic salary to the level that it should have been.
Oh and on Phil's company car example company cars are taxed as a benefit in kind, I have no idea if MP's rent payments are also taxed as a benefit in kind, if so then they (we) are effective only paying 60% of their rent.
Finally, Nationwide's House Price Index shows that a property in Wolverhampton bought in 2006 for £160,000 should have been worth £188,000 when he sold it in Nov 2017, apparently he sold it for £147,000. Maybe it was massively down valued due to the neighbours!
Expenses arent taxed.
Company cars are taxed as a benefit in kind. I am self employed with an office at home, I am allowed to claim a percentage of my car and household expenses against tax, however certainly not all of them and certainly not all of my mortgage payments, just a percentage of the interest.
I think we can all agree that the situation is open to abuse and gets abused. The whole MP's expenses scandal is caused by the fact that MPs are woefully underpaid. They are running the country yet the basic salary for an MP (from April 2024) is £91,346, to put that into context there are, apparently, more than 38,000 public employees earning more than £100,000 per annum, £38,000!
I think it was Maggie Thatcher that introduced the expenses as she couldn't get away with increasing the MP's basic salary to the level that it should have been.
Oh and on Phil's company car example company cars are taxed as a benefit in kind, I have no idea if MP's rent payments are also taxed as a benefit in kind, if so then they (we) are effective only paying 60% of their rent.
Finally, Nationwide's House Price Index shows that a property in Wolverhampton bought in 2006 for £160,000 should have been worth £188,000 when he sold it in Nov 2017, apparently he sold it for £147,000. Maybe it was massively down valued due to the neighbours!
Expenses arent taxed.
Company cars are taxed as a benefit in kind. I am self employed with an office at home, I am allowed to claim a percentage of my car and household expenses against tax, however certainly not all of them and certainly not all of my mortgage payments, just a percentage of the interest.
I know that. I said expenses arent taxed. The car example was completely irrelevant.
I think we can all agree that the situation is open to abuse and gets abused. The whole MP's expenses scandal is caused by the fact that MPs are woefully underpaid. They are running the country yet the basic salary for an MP (from April 2024) is £91,346, to put that into context there are, apparently, more than 38,000 public employees earning more than £100,000 per annum, £38,000!
I think it was Maggie Thatcher that introduced the expenses as she couldn't get away with increasing the MP's basic salary to the level that it should have been.
Oh and on Phil's company car example company cars are taxed as a benefit in kind, I have no idea if MP's rent payments are also taxed as a benefit in kind, if so then they (we) are effective only paying 60% of their rent.
Finally, Nationwide's House Price Index shows that a property in Wolverhampton bought in 2006 for £160,000 should have been worth £188,000 when he sold it in Nov 2017, apparently he sold it for £147,000. Maybe it was massively down valued due to the neighbours!
Expenses arent taxed.
Company cars are taxed as a benefit in kind. I am self employed with an office at home, I am allowed to claim a percentage of my car and household expenses against tax, however certainly not all of them and certainly not all of my mortgage payments, just a percentage of the interest.
I know that. I said expenses arent taxed. The car example was completely irrelevant.
A guide to MPs’ claims
Accommodation
Reason for funding Most MPs are required to work from two locations – their constituency and London. To enable them to do this without being out of pocket, we fund accommodation in one or other of those places while the MP fully funds their accommodation in the other location.
You can read more about this in Why MPs need an accommodation budget.
How the claim is made Non-London MPs can claim for hotels, rental accommodation or associated costs in either London or their constituency. Hotel costs are either made as a reimbursement claim or using the MP payment card. Rent is paid directly to the landlord who is registered with us. Associated costs, not including mortgage or mortgage interest payments, are claimed as reimbursements.
How these claims are regulated We have a dedicated Homes, Offices, and Security Team to help MPs make accommodation claims within the rules. There are limits on how much MPs can claim for hotel costs and the Accommodation budget is capped – so MPs must stay within the budget or they will have to repay money at the end of the year.
MPs are not allowed to claim rental costs for properties they own or those owned by someone connected to them. We review tenancy agreements (for rent), or deed/mortgage statements (for associated costs), before allowing payments or claims to be made. In the case of rented properties, we also check the landlord for any connection to the MP. Rent claims by MPs or payments made directly by IPSA on the MP’s behalf can only be made up to the amount and frequency specified in the agreement which is recorded on our system. A proportion of all accommodation claims are checked by our validation officers for compliance.
I think we can all agree that the situation is open to abuse and gets abused. The whole MP's expenses scandal is caused by the fact that MPs are woefully underpaid. They are running the country yet the basic salary for an MP (from April 2024) is £91,346, to put that into context there are, apparently, more than 38,000 public employees earning more than £100,000 per annum, £38,000!
I think it was Maggie Thatcher that introduced the expenses as she couldn't get away with increasing the MP's basic salary to the level that it should have been.
Oh and on Phil's company car example company cars are taxed as a benefit in kind, I have no idea if MP's rent payments are also taxed as a benefit in kind, if so then they (we) are effective only paying 60% of their rent.
Finally, Nationwide's House Price Index shows that a property in Wolverhampton bought in 2006 for £160,000 should have been worth £188,000 when he sold it in Nov 2017, apparently he sold it for £147,000. Maybe it was massively down valued due to the neighbours!
Expenses arent taxed.
Company cars are taxed as a benefit in kind. I am self employed with an office at home, I am allowed to claim a percentage of my car and household expenses against tax, however certainly not all of them and certainly not all of my mortgage payments, just a percentage of the interest.
I know that. I said expenses arent taxed. The car example was completely irrelevant.
A guide to MPs’ claims
Accommodation
Reason for funding Most MPs are required to work from two locations – their constituency and London. To enable them to do this without being out of pocket, we fund accommodation in one or other of those places while the MP fully funds their accommodation in the other location.
You can read more about this in Why MPs need an accommodation budget.
How the claim is made Non-London MPs can claim for hotels, rental accommodation or associated costs in either London or their constituency. Hotel costs are either made as a reimbursement claim or using the MP payment card. Rent is paid directly to the landlord who is registered with us. Associated costs, not including mortgage or mortgage interest payments, are claimed as reimbursements.
How these claims are regulated We have a dedicated Homes, Offices, and Security Team to help MPs make accommodation claims within the rules. There are limits on how much MPs can claim for hotel costs and the Accommodation budget is capped – so MPs must stay within the budget or they will have to repay money at the end of the year.
MPs are not allowed to claim rental costs for properties they own or those owned by someone connected to them. We review tenancy agreements (for rent), or deed/mortgage statements (for associated costs), before allowing payments or claims to be made. In the case of rented properties, we also check the landlord for any connection to the MP. Rent claims by MPs or payments made directly by IPSA on the MP’s behalf can only be made up to the amount and frequency specified in the agreement which is recorded on our system. A proportion of all accommodation claims are checked by our validation officers for compliance.
The link within that article was more informative than the main article.
To start with, the amount claimed for "Staff costs" is more than 10 times the "accommodation cost". "Office costs" are also higher.
Accommodation costs are paid direct to the Landlord by IPSA. Who have clearly stated that it does not count as part of (notional) salary. So it will not be treated as a benefit in kind for taxation purposes. But then that was always going to be the case-why would MPs claim just 60% of Rent when they could claim 100% of a Hotel?
IPSA give guidance before a claim, pre-approve all Rentals "We have a dedicated Homes, Offices, and Security Team to help MPs make accommodation claims within the rules." And also do follow up checks. And, this being Taxpayers money, there are clear paper trails for all to see. I'm quite willing to believe MPs would bend or break rules to make extra money. But not on this occasion-because, if that were the case, it would be easily found out.
It's not like someone claiming expenses for work done cleaning their moat...
Newspapers and other media have become very adept at making FOI requests. Particularly in relation to Public money, where it is really easy. Obviously I cannot go into detail, but I have been on both sides of those
I guarantee that the direct questions have been put to IPSA, saying:-
1. Have MPs asked whether it is permissible to rent out owned previous London or Constituency residence and claim rent for a separate Residence as Tenant? 2. What would be your answer in that instance? 3. Do you believe that it is morally ok to act in this way?
The answer would have been something like:-
1. Cannot go into individual cases, but yes 2. There are ways that may lawfully be done. We have a dedicated team which sets out how and when that is possible 3. We do not give moral advice. That is not part of our remit
Newspapers do not print this. Because it doesn't sell newspapers
Newspapers and other media have become very adept at making FOI requests. Particularly in relation to Public money, where it is really easy. Obviously I cannot go into detail, but I have been on both sides of those
I guarantee that the direct questions have been put to IPSA, saying:-
1. Have MPs asked whether it is permissible to rent out owned previous London or Constituency residence and claim rent for a separate Residence as Tenant? 2. What would be your answer in that instance? 3. Do you believe that it is morally ok to act in this way?
The answer would have been something like:-
1. Cannot go into individual cases, but yes 2. There are ways that may lawfully be done. We have a dedicated team which sets out how and when that is possible 3. We do not give moral advice. That is not part of our remit
Newspapers do not print this. Because it doesn't sell newspapers
I dont think that we are very good at making rules on times. The new rule will be counterproductive in some cases. That was the point Philip Davies was making.
If they rent a property, they are able to reclaim all the costs, rent, council tax, utilities etc. If he, and his wife lived in their own home, they have to cover the mortgage plus the other costs. So he can rent a property for free, and rent out his own, covering all the costs for that property. So all the costs on both properties are covered Therefore in his, and similar cases, the new rule may have backfired. He, his wife, and others are therefore doing exactly what the rule was seeking to prevent. In cases like this it may have been cheaper for the taxpayer to continue to cover the mortgage.
Newspapers and other media have become very adept at making FOI requests. Particularly in relation to Public money, where it is really easy. Obviously I cannot go into detail, but I have been on both sides of those
I guarantee that the direct questions have been put to IPSA, saying:-
1. Have MPs asked whether it is permissible to rent out owned previous London or Constituency residence and claim rent for a separate Residence as Tenant? 2. What would be your answer in that instance? 3. Do you believe that it is morally ok to act in this way?
The answer would have been something like:-
1. Cannot go into individual cases, but yes 2. There are ways that may lawfully be done. We have a dedicated team which sets out how and when that is possible 3. We do not give moral advice. That is not part of our remit
Newspapers do not print this. Because it doesn't sell newspapers
I dont think that we are very good at making rules on times. The new rule will be counterproductive in some cases. That was the point Philip Davies was making.
If they rent a property, they are able to reclaim all the costs, rent, council tax, utilities etc. If he, and his wife lived in their own home, they have to cover the mortgage plus the other costs. So he can rent a property for free, and rent out his own, covering all the costs for that property. So all the costs on both properties are covered Therefore in his, and similar cases, the new rule may have backfired. He, his wife, and others are therefore doing exactly what the rule was seeking to prevent. In cases like this it may have been cheaper for the taxpayer to continue to cover the mortgage.
This is where we differ.
You believe that the purpose of the Rule change was to stop people claiming Mortgage costs. Whereas I (and Parliament/IPSA) believe that the only reason for the rule change was to stop the perception of an MP "profiting" from the 2nd property, as opposed to the expensed Mortgage or equivalent itself. Newspapers, for their own political agendas, are misrepresenting what the new rule was trying to achieve.
That's why Cabinet Ministers and other MPs took, and received, advice that what they were doing by renting out and renting the 2 properties was fine. The only aim was to have a degree of separation between payment and profit.
Should that be the case? I have genuinely no idea Has this caused unnecessary problems for MPs? Undoubtedly.
The decision-makers on this were thinking of themselves when this rule change came about. Not MPs. And not the taxpayer.
Newspapers and other media have become very adept at making FOI requests. Particularly in relation to Public money, where it is really easy. Obviously I cannot go into detail, but I have been on both sides of those
I guarantee that the direct questions have been put to IPSA, saying:-
1. Have MPs asked whether it is permissible to rent out owned previous London or Constituency residence and claim rent for a separate Residence as Tenant? 2. What would be your answer in that instance? 3. Do you believe that it is morally ok to act in this way?
The answer would have been something like:-
1. Cannot go into individual cases, but yes 2. There are ways that may lawfully be done. We have a dedicated team which sets out how and when that is possible 3. We do not give moral advice. That is not part of our remit
Newspapers do not print this. Because it doesn't sell newspapers
I dont think that we are very good at making rules on times. The new rule will be counterproductive in some cases. That was the point Philip Davies was making.
If they rent a property, they are able to reclaim all the costs, rent, council tax, utilities etc. If he, and his wife lived in their own home, they have to cover the mortgage plus the other costs. So he can rent a property for free, and rent out his own, covering all the costs for that property. So all the costs on both properties are covered Therefore in his, and similar cases, the new rule may have backfired. He, his wife, and others are therefore doing exactly what the rule was seeking to prevent. In cases like this it may have been cheaper for the taxpayer to continue to cover the mortgage.
This is where we differ.
You believe that the purpose of the Rule change was to stop people claiming Mortgage costs. Whereas I (and Parliament/IPSA) believe that the only reason for the rule change was to stop the perception of an MP "profiting" from the 2nd property, as opposed to the expensed Mortgage or equivalent itself. Newspapers, for their own political agendas, are misrepresenting what the new rule was trying to achieve.
That's why Cabinet Ministers and other MPs took, and received, advice that what they were doing by renting out and renting the 2 properties was fine. The only aim was to have a degree of separation between payment and profit.
Should that be the case? I have genuinely no idea Has this caused unnecessary problems for MPs? Undoubtedly.
The decision-makers on this were thinking of themselves when this rule change came about. Not MPs. And not the taxpayer.
When the story first broke, about half a dozen "experts", who are clearly much cleverer than me, said on the telly, that the purpose of the rule change was to prevent MPs building up a property portfolio, paid for by the taxpayer. I didnt make it up.
Comments
Firstly, the cheapest bedsit within walking distance of Parliament is about £250k. Typical price? About £2 million. Good luck in getting Planning Permission for the Westminster "H" Block-in news that will surprise no-one, billionaires have quite good lawyers
Then factor in the enormous cost of making a Terrorist's Wet Dream safe. And the legal actions from all the neighbours...
Nice to think about it. But not going to happen
Maybe a qualifying criteria in respect of the selection of an MP should be that they actually live in the constituency that they plan to represent.
As far as Pat McFadden is concerned, the phrase that has been used in many of the articles is that he did not act within the spirit of the rules.
I agree with this, in respect of any MP, irrespective of which party they represent.
Had he immediately put his property up for sale, and rented another property once the property was sold, nothing would have been said.
@tomgoodun
I did, albeit only momentarily, rather enjoy this delicious thought....
"Put them up in a Barge in the Thames, it’s claimed to be good enough for migrants."
I think it was Maggie Thatcher that introduced the expenses as she couldn't get away with increasing the MP's basic salary to the level that it should have been.
Oh and on Phil's company car example company cars are taxed as a benefit in kind, I have no idea if MP's rent payments are also taxed as a benefit in kind, if so then they (we) are effective only paying 60% of their rent.
Finally, Nationwide's House Price Index shows that a property in Wolverhampton bought in 2006 for £160,000 should have been worth £188,000 when he sold it in Nov 2017, apparently he sold it for £147,000. Maybe it was massively down valued due to the neighbours!
"• Your employees cannot do their work properly without it, for example agricultural workers
living on farms.
• An employer is usually expected to provide accommodation for people doing certain
types of work, for example a manager living above a pub or a vicar looking after a
parish.
• If you need to provide accommodation to protect an employee because the type of
work they do means there’s a special threat to their security."
That is why there is only assistance payable for the 2nd property-not the 1st
In relation to the "loss" on the Wolverhampton property. Simple fact is that a Property owned/lived in by an Owner-Occupier generally is worth more than 1 that has had Tenants in. There is (rightly or wrongly) a perception that Owners look after properties better than Tenants (or Landlords)
Then he could probably have got more by ending the tenancy agreement and selling as vacant possession. Or maybe he had made massive capital gains elsewhere and could offset the loss against those? We'll never know but I suspect the loss he made wasn't particularly devastating to him. I do like the idea that it was down valued due to the local MP renting the next door property though, now that would be karma!
Maybe a few HMO’s would better suit, scatter them about a bit.
I can’t get my head round cost tbh, it seems at present if MP’s claim for mortgage payments surely when they ‘move out’ of the property the house( or money gained when house goes up in price) belongs to the taxpayer, or am I missing something?
Surely the MP doesn’t pocket the dosh, that’d be criminal wouldn’t it…
That was precisely the reason for the rule change.
Stopping MPs building a property portfolio paid for by the taxpayer.
He exploited a loophole.
The taxpayer paid the rent of the next door property.
Having paid the mortgage on his property for 6 years.
While the rent on his own property covered the mortgage.
The value of his London property has increased by almost a million quid, since he bought it in 2009.
I said expenses arent taxed.
The car example was completely irrelevant.
Accommodation
Reason for funding
Most MPs are required to work from two locations – their constituency and London. To enable them to do this without being out of pocket, we fund accommodation in one or other of those places while the MP fully funds their accommodation in the other location.
You can read more about this in Why MPs need an accommodation budget.
How the claim is made
Non-London MPs can claim for hotels, rental accommodation or associated costs in either London or their constituency. Hotel costs are either made as a reimbursement claim or using the MP payment card. Rent is paid directly to the landlord who is registered with us. Associated costs, not including mortgage or mortgage interest payments, are claimed as reimbursements.
How these claims are regulated
We have a dedicated Homes, Offices, and Security Team to help MPs make accommodation claims within the rules. There are limits on how much MPs can claim for hotel costs and the Accommodation budget is capped – so MPs must stay within the budget or they will have to repay money at the end of the year.
MPs are not allowed to claim rental costs for properties they own or those owned by someone connected to them. We review tenancy agreements (for rent), or deed/mortgage statements (for associated costs), before allowing payments or claims to be made. In the case of rented properties, we also check the landlord for any connection to the MP. Rent claims by MPs or payments made directly by IPSA on the MP’s behalf can only be made up to the amount and frequency specified in the agreement which is recorded on our system. A proportion of all accommodation claims are checked by our validation officers for compliance.
https://www.theipsa.org.uk/news/a-guide-to-mps-claims
To start with, the amount claimed for "Staff costs" is more than 10 times the "accommodation cost". "Office costs" are also higher.
Accommodation costs are paid direct to the Landlord by IPSA. Who have clearly stated that it does not count as part of (notional) salary. So it will not be treated as a benefit in kind for taxation purposes. But then that was always going to be the case-why would MPs claim just 60% of Rent when they could claim 100% of a Hotel?
IPSA give guidance before a claim, pre-approve all Rentals "We have a dedicated Homes, Offices, and Security Team to help MPs make accommodation claims within the rules." And also do follow up checks. And, this being Taxpayers money, there are clear paper trails for all to see. I'm quite willing to believe MPs would bend or break rules to make extra money. But not on this occasion-because, if that were the case, it would be easily found out.
It's not like someone claiming expenses for work done cleaning their moat...
I guarantee that the direct questions have been put to IPSA, saying:-
1. Have MPs asked whether it is permissible to rent out owned previous London or Constituency residence and claim rent for a separate Residence as Tenant?
2. What would be your answer in that instance?
3. Do you believe that it is morally ok to act in this way?
The answer would have been something like:-
1. Cannot go into individual cases, but yes
2. There are ways that may lawfully be done. We have a dedicated team which sets out how and when that is possible
3. We do not give moral advice. That is not part of our remit
Newspapers do not print this. Because it doesn't sell newspapers
The new rule will be counterproductive in some cases.
That was the point Philip Davies was making.
If they rent a property, they are able to reclaim all the costs, rent, council tax, utilities etc.
If he, and his wife lived in their own home, they have to cover the mortgage plus the other costs.
So he can rent a property for free, and rent out his own, covering all the costs for that property.
So all the costs on both properties are covered
Therefore in his, and similar cases, the new rule may have backfired.
He, his wife, and others are therefore doing exactly what the rule was seeking to prevent.
In cases like this it may have been cheaper for the taxpayer to continue to cover the mortgage.
You believe that the purpose of the Rule change was to stop people claiming Mortgage costs. Whereas I (and Parliament/IPSA) believe that the only reason for the rule change was to stop the perception of an MP "profiting" from the 2nd property, as opposed to the expensed Mortgage or equivalent itself. Newspapers, for their own political agendas, are misrepresenting what the new rule was trying to achieve.
That's why Cabinet Ministers and other MPs took, and received, advice that what they were doing by renting out and renting the 2 properties was fine. The only aim was to have a degree of separation between payment and profit.
Should that be the case? I have genuinely no idea
Has this caused unnecessary problems for MPs? Undoubtedly.
The decision-makers on this were thinking of themselves when this rule change came about. Not MPs. And not the taxpayer.
I didnt make it up.