Socialist Worker

How MPs use second homes

Issue No. 2151

The additional-cost allowance (ACA) is supposed to reimburse MPs for the cost of renting, mortgage interest payments or staying in a hotel.

Many MPs use it to buy a property in London.

Of the 586 MPs who claimed the allowance in 2007, more than half claimed over 90 percent of the £22,110 maximum.

MPs are also allowed to claim for food bills of up to £400 a month under the ACA.

They did not have to provide receipts for items under £250.

MPs can submit mortgage claims on a monthly basis without any receipts and have to provide a mortgage statement only once a year.

Some 43 MPs get the allowance for a second home and then rent it out.

The potential is not just for claiming cat food, or even posh furniture, but for avoiding tax and make a fortune.

The scams include:

lMPs nominate their London property as a “second” home. We pay for furniture and refurbishment, then they nominate the constituency home as the “second home” so we pay for them to do that one up too.

lMPs renovate property at our expense, sell it on at a profit, then buy another property, renovate it, sell it and so on.

lMPs claim full rate of council tax on a “second” home, then claim discounted rates on their other home, paid by themselves, by telling the council this is their “second” home.

lSecond homes are subject to capital gains tax, but MPs can avoid paying this when they sell their second home by claiming it is, in fact, their main home.

lMPs are supposed to nominate the home where they spend the least time as their “second” home.

Some claim their main family home as their second property, so that the taxpayer foots their large household bills, while their “main” home is a cheap rented room in a friend’s house in London or in their constituency.

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