Wednesday 13 May 2009

Will The Taxman Treat Me So Nicely?

The taxman is not known for his leniency, particularly if you have deliberately gone out and deceived him. Just sending him a few quid after the event to keep him happy is not usually a good remedy. He likes to do the calculations and retributions himself.

As all the parties attempted to get 'closure' yesterday with grandstanding of superhuman proportions and an almost Presidential podium besieged by cameras for David Cameron, little Hazel Blears made her peace with the taxman.

After publicly cooing she had only ever owned one small property in London, she has missed the point of the scam unearthed. She had deliberately 'cheated' the taxman by declaring her Commons-designated second home for allowance purposes as her main residence to HMRC. The two systems are totally independent but had the taxman cottoned on she would surely have been chased for sizable tax evasion and, at minimum, have received the bill for the Capital Gains Tax (CGT) on selling her second home plus the interest since receiving the gain - which was conveniently missed off her cheque yesterday.

MPs make the rules after all.

For us mortals, we would have been in hot water. This was not a trifling sum of money. This also was no ordinary mistake. Most Independent Financial Advisers or accountants know the rules on main residences and second homes - most do not know about the MP allowance rules. The HMRC takes precedent in any case and any adviser would have told Hazel Blears that she could not pocket the full gain from the sale of a property that was clearly not her main residence. If they had told her that she could, then she has grounds to sue for poor advice.

But what gave the scam away, was that SHE knew the difference. By knowingly putting down her London flat as a second home for expenses purposes she was allowed to claim her full allowance prior to the sale to make sure it was tickety-boo and maximise her return, but for HMRC she can only have quite deliberately claimed it was her main residence and so avoided paying CGT on the gain.

There is absolutely no doubt it, you have to know about the different systems in order to have operated the scam, it cannot happen by accident - she had to know that by declaring the homes in this way to two different authorities that she had worked a scam as good as any benefits fraud or VAT scam. She was deliberately deceiving the taxman. Mere mortals and plebeians like us would have had the full weight of the law on us.

Hazel Blears looked like Mother Teresa as she held up her grubby cheque for the public to see what kind of saint she was. In performing her well manicured act, she publicly admitted she broke the law. So why is she still in a job and why is she not subject to a police enquiry?

Losing His Marbles

Michael Martin has been known for his rather strange methods in the past. His handling of the Damian Green affair was curious in the extreme. His behaviour regarding the MPs Expenses scandal shows that he has at least lost a grip on reality but at worst shows that he has lost his marbles now that the best scam in the world has been exposed.

Of course, the trail leads to him. The chap who writes the Green Book reports to him and his office is responsible for passing expense claims, so all these wonderful claims on 'flipping', swimming pool maintenance and wisteria clipping are actually scrutinised by his office. He knew everything about all this beforehand.

Rather than converting to the new religion as all party leaders have plus the spectacular conversion by Hazel Blears, he actually turned, publicly, on those who sought to criticise the system. With barely concealed contempt he spat at Kate Hoey, a Former Minister, not for her stance but her habit of giving 'pearls of wisdom on Sky News'. It was a personal insult of some proportion worthy of a classroom big bully, particularly as Ms. Hoey had merely said that it would a be waste of police time to get police to investigate how the leak came about. That particular horse had already bolted was her assertion - not so, thought Michael Martin. In fact he could not hide his utter disgust that whoever had leaked the information 'should be left in situ'.

In Mr. Martin's eyes, there would be no recanting for this individual for their sins, beheading would be too good for them for betraying the scam of the century.

He did not just pick on females. Norman Baker got a taste of his lash for being the kind of MP who was 'keen to say to the press whatever the press wants to hear'. You could level the same thing at Michael Martin as he is saying exactly what the press wants to hear, that he is one of those MPs who really could not give a stuff what common people think of the disgusting behaviour of elected officials and that they should be allowed, in confidence, to scam the British taxpayer for every penny they can. Michael Martin represents that epitome of an MP out of touch with the consensus in the country right now, independent of political leanings.

The problem here is that Micheal Martin is a key part of the apparatus of expenses. It is his office that will lead the reforms, and this is his opinion. Nothing could have been more clear in the current Green Book about the spirit of expenses and all MPs who chose to test it to its limits knew one thing, that Michael Martin's office would let them through.

Why Michael Martin has been allowed to haughtily stand on his dangerously immoral ground and defend the scam practices like a schoolyard bully is beyond most of us. But to Gordon Brown, Martin stands as a figure of how badly this Government has lost the plot and a grip on its authority. Michael Martin should be a high profile casualty along with likes of Blears for being at the very heart of the problem.

But I will wager, not one person will lose their job over all this. Not one. Reality and morality does not enter into a politician's life. In an age old Blairism, all parties will be keen to 'draw a line' under all this and get on with the business of making money some other way. Tony got it cracked, that's for sure as he smiles piously atop his millions - expenses are a thing of the future for him.

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