Taxman probes MPs' expenses claims

MPs were facing the prospect of further payment demands today after it was revealed the expenses claims of 27 among them were being investigated by the tax authorities.

The inquiries were initiated by HM Revenue and Customs after it intensified checks on politicians' financial affairs in the wake of the revelations of Westminster pay and perks.

Any found to have claimed for non-essential items could be billed for 40 per cent of the value plus interest and potentially face fines, the Daily Telegraph suggested.

Controversy has also surrounded MPs' failure to pay capital gains tax on the sale of properties bought using their Commons second homes allowance.

And many more, including a string of ministers, have been criticised for apparently failing to pay tax on their professionally-completed returns to the revenue.

"Inquiries are an integral part of HMRC's work ensuring everyone pays the right tax," a spokeswoman said.

"An inquiry does not necessarily mean that there is a problem. Most inquiries are closed quickly."

News of the investigations emerged as Commons Speaker John Bercow urged MPs to pay back whatever sums were demanded from them by the audit of expenses being carried out by Sir Thomas Legg.

Mr Bercow said that in order to show the public that they had "got the message" over expenses, MPs had to take the consequences of "demonstrably wrong or extravagant" claims they made in the past.

Sir Thomas's decision to impose a retrospective limit of £2,000 a year for cleaning bills and £1,000 for gardening has sparked anger among many MPs, who say that no such cap was in place at the time they made their claims.

But Mr Bercow said it would be "absurd" to suggest that there was no limit on what could be billed for, as this would allow MPs without mortgages to claim the full £23,000 second home allowance for cleaning.

"Some limits must have been implicit," he said.

MPs have the opportunity over the next three weeks to question Sir Thomas's findings and provide justifications for claims which he has queried.

But the Speaker warned: "If there are specific repayments that are expected by the Legg team, my strong expectation is that these payments will be made.

"I think we have got to accept that the Legg review was never intended simply as a receipt authorisation process. It was always clear in his terms of reference that Thomas Legg would have the opportunity to review the wisdom or otherwise of the original payments and pass comment on the claims that people have made.

"We have to accept the independence of the review process. The public would expect nothing less."

In an interview being broadcast today on BBC Radio 4's The Week In Westminster, Mr Bercow said: "If there is a choice of headlines between 'Payback Time' on the one hand and 'Westminster Whitewash' on the other, I would much rather have the former than the latter.

"The public has to see and be satisfied that we have got the message that there is public displeasure, that the process has to be changed and there there must be consequences for past claims if they can be shown to be demonstrably wrong or extravagant."

Mr Bercow has himself paid back almost £1,000 after a letter from Sir Thomas earlier this week alerted him to the fact that he had overclaimed allowances on the mortgage for his second home.

Prime Minister Gordon Brown handed back more than £12,000 at Sir Thomas's request and Tory leader David Cameron last night became the latest MP to be forced to repay more expenses - but just £18.16.

Sir Thomas found that the £218.19 Mr Cameron returned earlier this year due to an error over claims for mortgage interest payments had not fully covered the mistake.

A poll yesterday found most voters (57 per cent) had "no sympathy whatsoever" with MPs' complaints at being asked to repay taxpayer-funded expenses, with a majority thinking they have got off lightly.

The survey by the PoliticsHome website found that less than one in four (23 per cent) thought the politicians were at all unfairly treated and most (51 per cent) said Sir Thomas was "not tough enough" with them.