Politicians’ tax breaks

income-tax-earnings-and-pensions-act-2003Income Tax (Earnings and Pensions) Act 2003

Chapter 8
292 Overnight expenses allowances of MPs

(1) No liability to income tax arises in respect of an overnight expenses allowance paid to a Member of the House of Commons in accordance with a resolution of that House.

(2) “Overnight expenses allowance” means an allowance expressed to be in respect of additional expenses necessarily incurred by the Member in staying overnight away from the Member’s only or main residence, for the purpose of performing parliamentary duties—

(a) in the London area, as defined in such a resolution, or

(b) in the Member’s constituency.

While MPs are professing to not be very good at maths and have short memories, when it comes to legislation, they seem pretty clued up.


Tucked away in Chapter 8 of the Income Tax (Earnings and Pensions) Act of 2003 they managed to remember to exempt their overnight expenses from tax liability and more than that thought top draft the bill loosely enough that it was the House rules that would decide what was and wasn’t to be counted as overnight accommodation.


Chapter 8 of the Act is a fascinating read as it exempts MPs from taxation in areas such as loss of office, Ministers exemption for taxation for transportation, whilst ensuring that other elected officials do net get above their station and are treated as every other tax payer in regard to expenses.


MPs are very good at telling us they are sorry, they didn’t realise and they aren’t very good at administration. They are equally adept at crafting legislation to suit their own ends.


While MPs are busy cleaning up their house, let’s start by repealing section 291, 292 and 295 of the Income Tax (Earnings and Pensions) Act of 2003.

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