Tax Authority Investigation against British Representatives

Tax Authority started investigation against the British Parliament Representatives who were subject to cost reimbursement scandal exploded some month ago. According to The Daily Telegraph, the British Tax Authority started investigation for 27 representatives to clarify whether their cost reimbursements harmed any tax regulations. The cost reimbursement is free from taxes only if the costs accounted are fully related to their job in Parliament.

According to a report series of The Daily Telegraph published some months ago, the representatives were requesting reimbursement for quite bizarre costs with high amounts such as cost of duck-house floating in the swimming pool, construction costs for helicopter landing place, PayTV subscription for porno channels, charity payment for churches, teddy bears for present, pink laptop for Christmas. The Prime Minister, Gordon Brown has to pay back GBP 12,000 to the Treasury because of previously reimbursed gardening and cleaning service costs. The biggest amounts related to houses of the representatives. There were many payments related to maintenance and overhead costs of houses owned by the representative or relatives. There was one case when a representative financed the whole renewal of his house and sold it after with a high margin.

The amounts, what the investigation of the tax authority will find as not directly related to the position will be subject to 40% of taxes, related penalties and late payment interest calculated from the time it was originally received. It is also possible that in some cases court case can start to accuse for instance that representative who requested payment for instalment of his house loan which he had already paid back completely before the reimbursement.