MercoPress. South Atlantic News Agency

UK Revenue looking into tax affaire of 27 Members of Parliament

Controversy extends to failure on paying capital gains tax

The tax affairs of 27 British Members of Parliament are being investigated following inspections of their taxpayer-funded expenses payouts, it has emerged. It follows a warning from the head of HM Revenue and Customs Dave Hartnett in July that politicians would be placed under increased scrutiny in the wake of the exposure of their claims.

London’s Daily Telegraph said any found to have claimed for non-essential items could be billed for 40% of the value plus interest and potentially faces fines.

Controversy has also surrounded the failure of MPs to pay capital gains tax on the sale of properties bought using their Commons second homes allowance. And many more, including a string of ministers, have been criticised for apparently failing to pay tax on their professionally-completed returns to the revenue.

“Inquiries are an integral part of HMRC work, ensuring everyone pays the right tax,” a spokeswoman said. “An inquiry does not necessarily mean that there is a problem. Most inquiries are closed quickly.”

Giving evidence to the Committee on Standards in Public Life's inquiry into MPs' expenses this summer, Mr Hartnett signalled that the standard random checks of Parliamentarians would be stepped up.

“We have written to all MPs, inviting them to talk to us if they want to talk to us and we have picked up there will be a number that we need to talk to as well,” he told the committee.

Asked whether MPs had paid tax on the cost of having their returns completed by accountants, he said: “Some have got their tax affairs correct and some haven't. They should all be paying tax on that.”

Mike Warburton, a tax partner at the accountants Grant Thornton, told The Telegraph: “The rules are clear and MPs will struggle to argue that claims like horse manure for their gardens are essential. HMRC will want to open a high-profile case to put down a marker over what is acceptable”.