LibDems.com

Danny Alexander in expenses abuse probe

Danny Alexander, the Liberal Democrat who has replaced the outgoing disgraced David Laws as Chief Secretary to the Treasury, has caused embarrassment to the coalition because of his mp expenses bill.

First off, Alexander avoided paying capital gains tax when he sold his taxpayer-funded second home at a profit.

He designated the property as his second home for the purpose of claiming parliamentary expenses  but described it to HM Revenue and Customs as his main home.

He admitted that he took advantage of a loophole to legally avoid paying  Capital Gains Tax on the sale of the south London property for £300,000 in June 2007.

After being elected as an MP in 2005, Mr Alexander declared the flat in south London as his second home to the parliamentary authorities. He claimed more than £37,000 in expenses for the flat, and carried out some work to the property at the taxpayers’ expense shortly before selling in June 2007.

Chinless Wonder

Mr Alexander took advantage of a tax loophole that allows people to continue to tell the tax authorities for three years that a property is their main home even if they have bought another house – in Mr Alexander’s case in Scotland – which has become their “principal residence”.

However, this did not stop him telling the authorities at the House of Commons that the London property was his second home.

During the next two years, he claimed almost £37,000 in second home allowances for the London property.

At the time, MPs could claim about £22,000 a year towards the cost of living in the capital or in their constituency. Mr Alexander’s claims included up to £550 a month to pay the interest on the property’s mortgage, and hundreds more in monthly utility and maintenance bills. He also claimed £2,113 for a new boiler, £2,094 for a sofa and two chairs, and £332 for a new washing machine at the flat.

Claims were also made to fix the roof of the property before the MP sold the flat in August 2007. At the time, capital gains tax was levied at 40 per cent on the profits of a second home.

The claims appear to undermine repeated claims by Mr Clegg, the Deputy Prime Minister, that no Lib Dem MP profited from the expenses system.

In the first televised leaders’ debate, Mr Clegg said: “There are MPs who flipped one property to the next, buying property, paid by you, the taxpayer, and then they would do the properties up, paid for by you, and pocket the difference in personal profit.’’