BANKERS GONE WILD....UK STYLESubmitted by Misfit4Peace on Sun, 05/10/2009 - 04:37
BANKERS GONE WILD....UK STYLE
A flippin disgrace - MP made £320k profit on expenses flat By Vincent Moss, Political Editor 10/05/2009
Tax probe over second homes sales.
Top Tory Greg Barker made a £320,000 profit on a flat he bought with the help of taxpayers’ cash.
The multi-millionaire pal of David Cameron is one of dozens of politicians exposed for a money-spinning ruse on their second homes that is laid bare by the leaking of MPs’ expenses.
The controversial practice – which has been dubbed “flipping” – allows MPs to buy and furnish a second home using their £24,222 annual housing expenses to cover stamp duty, mortgage interest payments and furnishing the property.
They can then sell it on for a profit and buy a new one… and start the whole makeover process again.
Last night it emerged that the Inland Revenue is to investigate whether MPs have evaded capital gains tax when selling second homes. Any guilty MPs face an order to pay back cash or even prosecution for tax evasion.
Mr Barker, the Shadow Climate Change Secretary, made over £320,000 in two years buying and selling a flat in Chelsea, West London. After buying the apartment for £480,000 in November 2004, Mr Barker claimed £15,875 for stamp duty and other purchase costs. He then claimed back a
further £27,928 in mortgage interest payments over the next two years under MPs’ housing expenses – known as the Additional Cost Allowance. He sold the apartment for £800,000 in February 2007 and moved back to his old second home, a flat in nearby Pimlico.
He repeatedly switched his designated second home and put in large expenses claims at both, leaked documents reveal. Mr Barker moved house after leaving his wife Celeste in October 2006 while having a gay affair with interior designer William Banks-Blaney. But the Bexhill and Battle MP still claims the family house in East Sussex is his main home.
Mr Barker, 43, insisted his claims were “entirely legitimate” and that he had put down a large deposit on the Chelsea flat after selling his stake in a recruitment firm for a reported £7.4million.
MPs are set to face a ferocious crackdown amid mounting public anger over their exorbitant claims. They will be banned from their lucrative speculation which has seen some net up to £1million in the London property boom, according to senior Whitehall sources.
A review by Parliamentary sleazebuster Sir Christopher Kelly is likely to ban MPs using taxpayers cash to make a profit on homes, the Sunday
Mirror can reveal. The clampdown by Sthe chairman of the Committee on Standards in Public Life, is certain to win the approval of Gordon Brown who has been infuriated by the abuses.
Ministers will take to the airwaves today to complain that the systematic leaking has focused so far mainly on alleged abuses by Labour MPs, not Tories.
But Communities Secretary Hazel Blears in particularl faced questions on her tax affairs last night after claiming expenses on three second homes in one year. It appears she did not pay capital
gains tax on the sale of second homes when she sold her London flat in 2004 – even though she had told Commons authorities it was her second home.
In March 2004, Miss Blears said her second home was one in her Salford constituency she has owned with her husband since 1997. But she began claiming £850 a month mortgage expenses on a flat in South London a month later, before selling it in August 2004 for £200,000 – a £45,000 profit.
If the taxman viewed the flat as her second home, she could have been liable at that time for capital gains tax of 40 per cent on the profit.
Her spokesman said last night: “Hazel has complied with Commons rules and the Inland Revenue. No liability for capital gains tax arose.”
He said she had designated her flat as her second home for only “a few months”. After selling the South London property, she stayed in hotels before buying a £300,000 flat in Islington in December 2004. She then claimed almost £5,000 to furnish it, spending £913 on a TV, £668 on bed linen and £200 on bath towels.
Other revelations about MPs expenses yesterday included:
-FORMER PM Tony Blair remortgaged his constituency home for £296,000 – almost 10 times what he paid. Leaked papers say he was able to claim expenses for interest on almost a third of the new mortgage on his house in Trimdon, Co. Durham. This sparked speculation that Mr Blair used public cash to help build a £10million portfolio of five homes. There is no suggestion he broke rules.
-EX-Trade Secretary Stephen Byers claimed more than £125,000 in second home expenses for a London flat owned outright by his partner Jan Cookson. He insisted all his claims were approved by Commons authorities.
-EX-Europe Minister Keith Vaz, who bought and furnished a Central London flat despite living just 12 miles away. He claimed more than £75,000 including 17 silk cushions at £15 each.
-Tourism Minister Barbara Follett’s claim of more than £25,000 for security after she was attacked in the street.
-Health Minister Ben Bradshaw switched his second home allowance to allow him to pay the full mortgage interest on a more expensive house he owned with boyfriend Neal Dalgleish.
-Culture Secretary Andy Burnham pleaded with authorities to OK his claim or he “might be in line for a divorce”.
-Solicitor General Vera Baird’s £286 claim was knocked back because it includes Christmas decorations.
-Chancellor Alistair Darling changed his “main home” four times in four years, allowing him to claim on a new flat he had bought in London.
Meanwhile, more than two-thirds of the public believe the scandals have directly hurt the PM, while 89 per cent of those quizzed by ICM warned the reputation of Parliament was suffering.
Not every MP or minister has been tarred in the same way. Health Secretary Alan Johnson, Climate Change Secretary Ed Miliband and Environment Secretary Hilary Benn came out as “good guys” with modest claims.
Mr Miliband claimed just £6,300 for a home in Doncaster, while Mr Benn claimed only £147.78 for food – even though he was entitled to claim £400 a month.
Also check out the story The Credit Munch