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Hundreds of peers are exploiting a loophole on expenses to give themselves a tax free income of up to £48,000 a year, The Times has found.
Rules agreed by Parliament allow members of the House of Lords to claim up to £308 a day to pay for meals, hotels, taxis and other travel expenses associated with their role.
But peers do not have to submit receipts and an analysis of their expenses shows that nearly two thirds automatically claim the maximum almost every time they visit the Lords.
Several Lords have told The Times that they see the expense payments as an allowance and that routinely claiming the maximum amount is common practice. This discrepancy could lead to an investigation by HM Revenue & Customs. The payments are currently tax free because they are “reimbursement of actual expenses”, according to the Lords’ rule book, rather than a form of salary.
Lord Brabazon of Tara, the head of the Privileges Committee, the watchdog in the Lords, has admitted that the rules are ambiguous. One veteran Conservative peer said that there was an “element of hypocrisy” in the arrangement but it represented the best compromise possible after the 1999 reforms.
An analysis of peers’ expenses for The Times reveals:
— 359 of the 550 Lords who claimed “day subsistence” — a £78.50 payment for meals and taxis — claimed the maximum on 95 per cent of occasions or more.
— 272 of the 406 peers who live outside London and claim “overnight subsistence” for hotels — worth £159.50 — claimed the maximum on 95 per cent of occasions or more.
— 338 of 514 Lords who claim office expenses, worth £69 a day, claimed the maximum on 95 per cent of occasions or more. Unlike the House of Commons, secretarial costs are paid to the peer to distribute.
A number of Lords have claimed allowances regularly while voting infrequently. Lord Paul, a friend of Gordon Brown whose family is reportedly worth around £1.5 billion, claimed allowances for 137 days between April 2006 and March 2007. He voted 26 times on 21 different days over the same period, according to the Public Whip website. He said: “Most votes are before 5pm. I usually go after that. After work.”
However, Lord Paul and a number of other peers defended the amounts that they claimed, saying that their actual expenses were higher than the maximum that they could claim. He said: “That’s far less than I deserve. If a lawyer can charge thousands of pounds, then I can charge that. I spend more money than that, so I put in for the amount I can. That’s what I’m allowed to do, and that’s what I do.”
Peers’ expenses cost the taxpayer £17.7 million in the year to March, representing 18 per cent of the running cost of the Lords.
The rule book on the House of Lords website says: “All amounts paid in settlement of claims represent reimbursement of actual expenses arising out of unpaid parliamentary duty, rather than income from employment. Consequently they are not subject to income tax, and need not be included on a tax return.” It adds: “A member’s signature effectively certifies that the amount claimed has been spent.” Claims are checked by the House of Lords finance department and audited by the National Audit Office.
Lord Brabazon said: “Frankly most people claim the maximum. It’s up to individual peers to claim what they claim, within the limits. That’s the way the Lords works. You don’t have to prove how much you spent overnight.”
Asked if that could allow for abuses, he said: “I couldn’t possibly comment.” Asked if there was conflicting guidance, he said: “I can see what you’re getting at. I would agree that it’s ambiguous and that’s the way it works.”
Maurice Fitzpatrick, senior tax manager for Grant Thornton, said: “The general rule in the private sector is that when Revenue & Customs conduct inspections that they expect expenses reimbursed to employees to be backed up by receipts. I can’t see a general exemption for this allowance, and I can’t see anything that says this daily allowance is automatically free of tax.”
HM Revenue & Customs said: “Payment of expenses is a matter for House authorities. HMRC do not comment on individual cases.”

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its time to abolish this trough of greed
david cooke, bolton,
Greed prevails. Bring back Robin Hood.
Bob Yexley, Ferndown, Dorset
The words snouts and trough come to mind! Still, it's only public money and that's a tanner a bucketful!
Rod Ballard, Leicester, Leicestershire
It really is time for this non-elected body to be repalced by an eelected Senate.
Jim Tomlinnson, Solihull,
It is utterly disgusting and sickening. A total disgrace.
Those in politics should behave and be treated as any other member of the public. Not having to produce receipts is an outrage and a poke in the eye at the British taxpayer.
The current government are pushing hard to get every penny out of the British public, to the utter detriment of the people they serve, and then squander this money on themselves.
I would consider it a wholly impressive achievement if any more than 5% of those concerned could actually justify the full £308 for any given day.
It would also be wholly remarkable if any single one of them would stand up to publicly defend this expenditure. The bottom line is that they can't, and would dig themselves a political grave in the attempt and so will continue to hide with the others in the crowd and hope that no-one continues to press this issue.
Bob Holmes, Cambridge, UK
why should we expect anything different from politicians - they have always been a group of unprincipled money grabbers. When bus passes become national they will no doubt make even more money on false expense claims. The Great in Great Britain was never meant to apply to our politicians.
jeff, bristol,
So I have to pay income tax on my meagre £280 a month pension to fund this?
Roz Venner, St Neots, England
What do you expect from the Labour party ? Take 5 ££billion a year out of the pension funds,give £300 a day to The underworked Lords and give a 25 PENCE a week to our pensioners!! Take money from the poor and give it to the rich. Somethings will never change.
Eddie , Croosgates, Radnor County
The cure is quite simple:
1.New expense rules, No reciepts, No Expense payments.
2. All claims signed off by an appointed finance administrator prior to payment.
2.Major audit of the last 3 years expenses & quarterly checks going forward.
3.Audits should be by professional,non civil servants whose reports & findings should be in the public domain instantly.
3.Immediate dismissal for fraudsters, one warning for minor errors below £100.
4. No government "review" Do the above now to restore confidence.
Then address the lack of attendance issues & sleeping "on the job" in the House.
JM, London,
Your other corespondants actually seem surprised that the descendants of those who stole vast areas of Britain through force of arms, and lived off the sweat and toil of the people, are doing the same thing. it's called 'keeping it in the family '.
David Glen, Glasgow, Scotland
Just how many public servants who are making money hand-over-fist from the Public Sector gravy train never ceases to amaze me. When are we going to wake up and put a stop to it?
Neil, Gloucestershire, England
So that's the truth behind cash-for-honours! It's a pension fund. You give (sorry - loan on indefinite terms) my party a million quid and I'll guarantee an income for life - and all you have to do is spend the day lolling around on a park (sorry - lords) bench!
Why didn't I think of investing in a political party instead of the Pru?
KR, Stockport,
I would expect a Lord of our Realm to be beyond reproach, honest, trustworthy, whiter than white, but no, they're just as greeding and grubby as the rest of the dregs of society.
Like most politicions they're not there for the benifit of the country but rather to feather their own nests.
Make them produce reciepts like the rest of us. It seems they cannot be trusted otherwise.
Peter, York
Peter, York, English
The title Lord or Sir has come to mean a bit shady, and this is yet another example of that.
lord cashback, london,
This is just a symptom of a widespread problem in politics and public life where those in positions of power apply one set of rules to themselves and one set to everyone else. I have lost count of the number of times I have heard politicians telling low paid public workers they will have to make do with 2 or 3% pay rise, while at the same time taking more in 'expenses' (often without any proof of expense being given) for a couple of months than some people earn in a year, and awarding themselves very generous pay rises. The whole thing brings politics and democracy into disrepute.
Andrew Brown, derby, uk
...and people are denied a £2.50-a-day drug on the NHS!
Scandalous
Phil, Preston,
This is yet another abuse by the rich. Of course peers should be abolished and their expenses along with them. Will anything be done about this? I don't suppose so.
Janet Carlisle, Glasgow,
It'll make a nice headline, won't it?
"House of Lords to meet in H&K Wings of Wandsworth Prison"?
Dream on!
Anthony Gentles, Paris, France
I work as a contractor and have to produce receipts for anything i wish to claim as part of HMRC rules. I am open to investigation at anytime, why can I not have the same daily expenses as that would help me no end and also mean I would not be reliant on a second job to make sure I can pay my way and feed my family.
James Smith, Wiltshire, England
This is a land of where the rich gets richer and the poor continue to struggle. Even if the lords are investigated, nothing will become of it. We have seen this time and time again.
A single parent on a council estate who shouts at a child; their kids are taken away at a wimp. Yet we have an influential couple accused of an even more gruesome act and no action taken.
How can one ever expect everyone to be on a level playing field when the general acceptance of divide starts with the monarch?
Alicia Cox, London, Uk
I could never get away with this. If I have expenses they must be necessary for my work and backed up with reciepts or they are not repaid. Why should Lords, MEPs MPs and sundry civil servants get away with this sort of scam?
R Mason, London, UK
"Benefit Fraud" springs to mind.
Julian Davis, Coventry, West Mids
The reality is very different. The Lords actually get no salaries at all. They work free. Blair abolished most of the Lords to loud applause, but he knew then that under whatever system ultimately replaces it, the Lords will have to be paid a real wage. No-one wants to face this conundrum, least of all the taxpayer, so Labour have left it this baby the next Tory government.
Under the present system, the taxpayer gets away cheapest. Only those who commute to London from far away claim the maximum in expenses. This is checked. Most who live in London claim the 78 quid a day, but parliament only sits 4 days a week, with long holidays in between sittings. Imagine that many Lords have only this as income. Threadbare government. Tax the expenses on top? You must be joking! Cheap at the price, I say!
Piers, London,
Well done the Times for brining atention to this.
Mark Williams, Hampshire, England
It's not a problem, they can always squeeze the poor, after all they are used to living on low pay.
Terry, Newcastle, UK
And these are the people who are supposed to look after OUR interests. Don't make me laugh.
Constance Noring, Burnley, England
As with others claiming re-imbursement of expenses, HM Customs and Revenue should take a hard look at a sample of cases.
HMCR do this all the time for the average man/woman for trivial amounts. Let them do the same for the Lords.
Those that can't back up their claims should be pursued for fraud against the Revenue.
CB, Epsom, England
I know so many people living in London on the poverty line. England like India is still living with priority class, the poor are thought as dumb and the rich keeps ripping us off. Why should someone own Cornwall. I cannot pick an apple from a tree because it below to those so call landlords In a recent survey English people are less happy than years ago. You demolishing our right to express and fill u pockets while a child is hungry.
Freedom to the people.
Power to the people
Anne-Marie Hillock, London, Greater London
If they sign the form to say they have actually incurred expenditure when in fact they haven't, it is not really abuse. It is more likely to be obtaining money by deception which is a criminal offence.
J.POTTS, MANCHESTER,
Genco, you - apparently - live in Italy, so neither England or Zimbabwe. And Barry, there's none of 'your' money involved, the Peers are funded by British taxpayers.
Ultimately, the difference between the Peers and the Commons is that in the supposedly more accountable Commons they receive a salary and STILL claim - often even greater - expenses. All this fuss about the Lords has been carefully engineered by the Lower House, and particularly NuLab recently, in an attempt to divert attention from their own profligate wastage, both in personal and 'official' contexts, both of which far outweigh even the Lords' most avaricious dreams!
Dominic Graham de Montrose, London,
That there should be corruption and thevery in such a distinguished body as the House of Lords. Tsk Tsk!
Such a revolution really does ruin one's day. NOT!
Shirley Hodge, Glasgow, Scotland
If they do not have receipts for each claim it is stealing. What is annoying is that the practice could be stopped within hours if the Government simply stated that this is no longer acceptable, surely there must be an office/officer who has to write the cheques - no receipt no payment. An added advantage of a swift resolution to the problem is a cost effective piece of PR that would provide the Government with a raising of credibilty in the political system in the eyes of cynics ans sceptics - win/win surely.
Tom, Stroud,
What's new? Why single out Peers? They're all at it - stealing taxpayers money. And what will happen following this report? Nothing!
Paul Savage, Lambourn, Berkshire
What a complete joke.
How can the UK public people take the House of Lords be taken seriously.
If they don't arrange the taxation systems in this country but still do what they' 'should know is wrong' is a disgrace.
Shame fall upon you all !!!
This nation is a vitim of itself and the leads. What is this UK nation coming to??
Sanjeev, Sheffield, UK
This just a prime example of why I left Britain to live overseas back in the late 1960s - and nothing seems to have changed in the meantime. Britain is full of Sirs, Dames, Lord, Ladies, Earls, Barons, etc. etc. The plain old Mr. and Mrs. don't get a look in when it comes to divvying up the nation's wealth, those at the top of the heap just keep sticking their noses further and further into the taxpayer-funded trough. For God's sake, rid yourself of this anachronistic and more importantly, unjust system. To paraphase Shakespeare, 'a plage on both your Houses, especially the undemocratic one.'
Colin Cumner, Adelaide, South Australia
Yet another example of the self serving and sleezy nature of the new politcal elite. Buy a peeerage from Nulabour then clean up on expenses. Ian Blair instead of resigning in disgrace,brazens it out and demands his £25,000 bonus as a right. I would rather be governed by the old fashioned rich Tory Patricians who did it for duty than this buch of charlatans.
David, Uzes, France
From Royalty through the Establishment there is a big smell ! How low are we sinking now we see that the very people charged with caring for our morality are 'ripping us off' . Maybe this makes the idea of a democratically elected Upper House a must in order to save the Nation from crumbling further.
Campbell Morrow, Woking,
Our wounded troops have no chance of getting at this trough then. Just compare their compensation payments with these allowances. Animal Farm is pretty well on target then.
Philip Johnson, Shrewsbury, UK
Most of our politicians who are enjoying this gravy train should be put on board the Basra express, and share the pleasures our troops are enduring. I expect theyâd soon be shouting and demanding changes in our foreign policies. Its best remembered former president Blair & comrade Brown know how to enjoy the financial benefits of office, therefore wonât bring about any changes. All this fiddling whilst presiding over cuts in services and benefits for the needy in our society.
Michael, Sheffield,
To get my daily pay I work in the Sahara Desert. It's dirty and it's dangerous. I don't get as much as these guy's and the inland revenue persue me with a vengence to take 40% of my earnings. There are only two classes in Britain today. The political class and the rest of us.
Make them pay tax like everyone else and produce receipts for expenses in just the same way as the, ordinary people!
An average guy, Liverpool, UK
What actually these greedy lot do any way except go to house of Lords, sleep there and get paid, and expenses on top of that. What do you think Mr Brown?
Sadhu, northampton, UK
Well done the peers, lead by example. After all you were at one time all appointed to look after the interests of the citzens that you represented. Isn't honesty supposed to be part of the oath taken!
Nevermind, just tax those who are not so well off more in order to fund your greedy lifestyles!
Mark Harris, Swansea, Wales
Oink! Oink! Snuffle, snuffle â the quintessential sound of our dishonourable members enjoying the authorised embezzlement of taxpayers money.
Isnât it bizarre that Lord Black will get a long stretch for misuse of other peoples money yet politicians get away with it every day.
Oxford Don, Oxford, UK
There's no corruption in politics though. Unelected thieves.
judy, Liverpool, england
Do we live in England or Zimbabwe?
You appear, Signor Abbandando, to have abbandonato England and to live in Naples, which by many accounts resembles Zimbabwe in its fondness for 'arrangiarsi'.
John Telford
John Telford, Salisbury, UK
do we live in England or zimbabwe?
Genco Abbandando, Naples,
Come on House of Lords, change the rules and show the other place how it should be done - with honour and integrity.
jonathan mills, Brighton,
So no question of Public Service here then!
neil, KL,
It looks like the Peers are no different to the rank and file when their hands are near the till the can't resist
a free feed . Some people could not be blamed if they thought they were stealing our money.
Barry Holmes, Christchurch, New Zealand