Page last updated at 22:45 GMT, Friday, 16 October 2009 23:45 UK

HMRC investigates taxes of 27 MPs

Houses of Parliament
MPs have faced criticism over their tax payments after expenses were leaked

The tax affairs of 27 MPs are being investigated by HM Revenue and Customs, the department has confirmed.

HMRC says it will not reveal the identities of the MPs involved or elaborate on what is being looked into.

The move follows a warning in July from HMRC head Dave Hartnett that MPs would be placed under extra scrutiny in revelations about expenses claims.

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

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

Under scrutiny

The Daily Telegraph suggested that any MPs found to have claimed for items which were non-essential could be billed for 40% of their value plus interest and face fines.

MPs have faced criticism for not paying capital gains tax on the sale of properties bought using their Commons second homes allowance.

Others - including several ministers - have come under scrutiny for apparently not paying tax for returns to HMRC which have been completed by accountants

During evidence to the Committee on Standards in Public Life's inquiry into MPs' expenses in July, Mr Hartnett said that the standard random checks of parliamentarians would be stepped up.

He told the committee: "We have written to all MPs, inviting them to talk to us if they want to talk to us, and we have picked up there will be a number that we need to talk to as well."

Asked whether MPs had paid tax on the cost of having their returns professionally completed, he said: "Some have got their tax affairs correct and some haven't. They should all be paying tax on that."

Properties 'flipped'

There was uproar in May when receipts and details of what MPs had been claiming as expenses were leaked to the Daily Telegraph.

Among the revelations were claims for expensive TVs and furniture, MPs who claimed for more than one property by "flipping" the designated second home and others who over-claimed for mortgages or services.

Some MPs have announced they will be standing down, and some have already repaid claims in response to constituents' anger.

Party leaders have pledged to change the system and an independent review is due to make its recommendations this month.

The prime minister also asked an independent auditor, Sir Thomas Legg, to go over past claims again, to ensure money had been paid out properly.

Some MPs have protested after receiving his letters telling them how much they should pay back, with several arguing that it was unfair and legally questionable to apply new rules retrospectively.

On Wednesday David Wilshire became the latest MP to announce he would stand down in the expenses row.

The Daily Telegraph reported that the Conservative MP for Spelthorne had paid his own company more than £100,000 from public funds.

Mr Wilshire had stressed he and his partner set up the company to run his parliamentary office and it had never made a profit.

The Committee on Standards in Public Life, which is examining proposed future reforms to the expenses system, will publish its report on 4 November.

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