MPs’ expenses: how they milked the system

benefit-thieves

MPs are required by Parliamentary rules to be “above reproach” when claiming expenses. But many found a way round the system, leading to widespread abuse.

Below we look at what they can legitimately claim and how some managed to maximise their income at the taxpayer’s expense.

What they can legitimately claim:

Under the additional costs allowance (ACA), MPs can claim expenses for the cost of running a second home for the purpose of fulfilling their parliamentary duties. In 2007/8, the last year for which complete figures are available, this stood at a maximum of £23,083.

The money can be spent on rent or mortgage interest payments. MPs who do not have a second home can claim for hotel rooms, for which they must submit a receipt.

Within the maximum ACA, MPs are allowed to claim up to £400 per month for food without the need for receipts and, until last year, up to £250 per claim in other categories without receipts.

This has since been lowered to £25. MPs can claim for utility bills, council tax, telephone bills, decorating, employing a cleaner, and even the purchase of furniture and electrical and household goods for their second homes.

The amount which MPs can claim for individual items is governed by the so-called ‘John Lewis List’. Personal items, such as toiletries and electric razors, cannot be claimed for.

The rules state that all ACA claims must be “above reproach” and there must be “no suggestion of misuse of public money”.

How they exploited the system:

A number of MPs used the allowance to pay for furniture and refurbishments for one property, before ‘flipping’ their second home designation to another property and claiming for improvements on that one.

Having used their taxpayer-funded expenses for renovations and repairs, some MPs then sold their homes at a profit. Some with constituencies in outer London bought second homes just a few miles from their main residence.

Others avoided paying Capital Gains Tax on the profit of the sale of their second home by telling the taxman it was their main residence.

A few MPs continued to claim expenses for mortgage interest on their second home even when the mortgage had been paid off.

Many MPs regularly claimed the maximum allowed for food. Others put in claims for utility bills, cleaning and repairs whilst avoiding the need to submit receipts by ensuring that the sums claimed were just below the £250 limit.

Others went on spending sprees towards the end of the financial year on order to reach their maximum ACA. Some bought furniture for their second homes but had it delivered to their main residence.

Among the frivolous and arguably unnecessary items claimed by MPs were radiator covers, pet food, manure and a duck house.

Read on

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