MPs £5,000 Food Allowance Should be Taxed in the Budget

Guido first drew attention to the £400 food allowance given to MPs in 2005. Strictly speaking the allowance is £20 per diem. In reality this tax free allowance is worth some £33 to 40% tax rate payers. There is no real justification for it, it is equivalent an extra £5,000* or so a year on MP’s income.

There is no reason why this should not be abolished and a more honest and transparent picture of the compensation package of MPs given to the public. At the very least Alistair Darling should announce today that it will be taxed in the normal way as a benefit. Guido does not see why MPs should be treated differently from other self-employed business people who have to account for every penny to the revenue commissioners.

Some MPs claim to have been totally unaware of the allowance. Perhaps that is true. Guido would still like to know the details of who is claiming it.

*Guido is guesstimating, we do not know the details of the payment system and the authorities are resisting FoI requests.


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