Monday, 25 May 2009

I wish the state would pay for my accountant

OK, it is debatable whether my financial affairs are sufficiently complicated to warrant an acccountant. Nevertheless, I would love for someone to come along and find a wealth enhancing tax break.

Thankfully, the New Labour cabinet can employ accountants, with the taxpayer picking up the tab. Again, it is the same sorry list of ministers: Blears, Hoon, Smith, and Darling, who took advantage.

Nevertheless, there is an interesting question here. Did the taxpayer financed accountants advise ministers to flip their designation of second homes to limit their capital gains tax liabilities? If this is the case, the taxpayer was paying for the priviledge for being shafted.

The Chancellor, Alistair Darling, is fatally compromised by this revelation. He is charged with designing tax legislation. At the same time, he employs an advisor to clarify "the treatment of rental expenses against income". He needed the advice because during 2007 he rented out his London flat after becoming Chancellor and moving into a free taxpayer-owned apartment. So while Darling was designing tax policy he was simulataneously seeking out tax advantages.

It is all so seedy and venal. How long must we wait before these sad individuals exit the political stage?


Anonymous said...

How come their is a list here of seperate names for the corrupt?

Blears, Hoon, Smith, and Darling, who took advantage.

Doesn't the one name Hoon cover them allon both sides of the house ?
House of hypocritic Hoons rolls of the tounge too.

Anonymous said...

Alice, in this time of revolution, well sort of, should we now be getting into the likes of Flat Rate Income Tax and NI; Land Value Tax. The latter replacing Council Tax; Business Rates and Property Stamp Duty; and, possibly the now infamous second home Capital Gains Tax. Acorn

Anonymous said...

Any competent accountant would know about the CGT rules (the flipping) and, yes, they would have advised him to flip. But the rules here are no different than those which apply to the rest of the population, and from which millions have benefitted, in one way or another, since they were introduced (sometime in the 70s if I recall correctly).

Much as though it makes me unpopular in saying so, it is not the payment, or not, of the CGT that is the issue. It is the fact that the profit in question was made with public money. We shouldn't be demanding the tax; we should be wanting at least the whole profit, if not the whole of the proceeds of these properties.

Striclty, whilst he is in overall charge at the Treasury, the Chancellor is not responsible for tax legislation. That is normally the job of the two junior minister at the Treasury; currently Timms and Eagle.

rwendland said...

The Green Book gives accountants as an example of a valid use of the Staffing Expenditure (page 29). Apparently about half of all MPs use accontants under this provision. It sounds like the Telegraph has been a bit selective on reporting this one.

john miller said...

No, rwendland.

The Green Book, as ever, has the caveat "in their capacity as Members of Parliament."

Asking your accountant tax advice on rental income is not in your capacity as MP and Darling has broken the law.

Or he would have done but he is an MP. There are no laws for them, only "rules" which are far less serious things to break.

rwendland said...

JM, isn't it the case that as an MP isn't a Ltd company, unincorparated association, etc, MPs only have one legal peronality and one tax return? So in law, and for tax returns, their personal capacity is fully inter-linked with their MP roles. This would make it difficult for an accountant to only handle just a fairly indistinct partition of the tax return.

Darling only claimed £1,400 for two years accountancy bills; the more personal element is probably a small part of this. This does sound like mountains being built out of mole-hills.

Note I'm not saying the other abuses are insignificant though! Just this one.