Finance (No. 2) Act 2010

Section 7

SCHEDULE 4 U.K. Expenses paid to MPs etc

Accommodation expenses U.K.

1 (1) ITEPA 2003 is amended as follows. U.K.

(2) For section 292 substitute—

“292 Accommodation expenses of MPs

(1) No liability to income tax arises in respect of a payment made to a member of the House of Commons under section 5(1) of the Parliamentary Standards Act 2009 if the payment is—

(a) expressed to be made in respect of accommodation expenses, or

(b) related to or in consequence of a payment expressed to be so made.

(2) “Accommodation expenses” means expenses necessarily incurred on overnight accommodation that is required for the performance of the member's parliamentary duties in or about the Palace of Westminster or the member's constituency.

(3) But the cost of an overnight stay in a hotel that was required only because, on that night, the member had been required to be at the House of Commons because the House was sitting late does not count as accommodation expenses for the purposes of this section, unless the member had been required to be at the House because it was sitting beyond 1 a.m.

(4) Subsection (1) does not apply to a loan for a deposit payable at the commencement of a tenancy.”

(3) In section 360 (disallowance of certain accommodation expenses of MPs and other representatives), insert at the end—

“(3) In relation to a member of the House of Commons, subsection (3) of section 292 applies for the purposes of this section as it applies for the purposes of that section.”

(4) The amendment made by sub-paragraph (2) has effect in relation to payments made under section 5(1) of the Parliamentary Standards Act 2009 on or after 7 May 2010.

(5) In relation to payments made on or after that date in accordance with a resolution of the House of Commons passed before that date, ITEPA 2003 continues to have effect as if that amendment had not been made.

(6) The amendment made by sub-paragraph (3) has effect in relation to expenses incurred on or after that date.

UK travel and subsistence expenses U.K.

2 (1) In ITEPA 2003, after section 293 insert— U.K.

“293A UK travel and subsistence expenses of MPs

(1) No liability to income tax arises in respect of a payment made to a member of the House of Commons under section 5(1) of the Parliamentary Standards Act 2009 if the payment is expressed to be made—

(a) in respect of relevant UK travel expenses, or

(b) in respect of relevant subsistence expenses.

(2) “Relevant UK travel expenses” means expenses necessarily incurred on journeys of the following kinds within the United Kingdom—

(a) journeys made by the member that are necessary for the performance of the member's parliamentary duties, and

(b) if the member shares caring responsibilities with a spouse or partner, journeys made by the spouse or partner between the member's London Area residence and the member's constituency residence.

(3) “Relevant subsistence expenses” means expenses necessarily incurred on an evening meal (excluding alcoholic drinks) eaten on the Parliamentary Estate, where the member is required to be at the House of Commons because the House is sitting beyond 7.30 p.m.

(4) “Caring responsibilities” and “London Area” have the same meaning in subsection (2)(b) as they have in the scheme in effect for the time being under section 5 of the Parliamentary Standards Act 2009.”

(2) The amendment made by sub-paragraph (1) has effect in relation to payments made under section 5(1) of the Parliamentary Standards Act 2009 on or after 7 May 2010.

(3) In relation to payments made on or after that date in accordance with a resolution of the House of Commons passed before that date, ITEPA 2003 continues to have effect as if that amendment had not been made.

European travel expenses U.K.

3 (1) Section 294 of ITEPA 2003 (European travel expenses of MPs and other representatives) is amended as follows. U.K.

(2) For subsection (1) substitute—

“(1) No liability to income tax arises in respect of a sum that is paid to—

(a) a member of the House of Commons under section 5(1) of the Parliamentary Standards Act 2009,

(b) a member of the Scottish Parliament under section 81(2) of the Scotland Act 1998,

(c) a member of the National Assembly for Wales under section 20(2) of the Government of Wales Act 2006 or a member of the Welsh Assembly Government under section 53(2) of that Act, or

(d) a member of the Northern Ireland Assembly under section 47(2) of the Northern Ireland Act 1998,

and expressed to be made in respect of European travel expenses.”

(3) In subsection (3)(b), for sub-paragraph (iii) substitute—

“(iii) any other country that is a member of the Council of Europe.”

(4) The amendments made by this paragraph have effect in relation to sums paid to members under the relevant Act on or after 7 May 2010.

(5) In relation to sums paid on or after that date in accordance with a resolution of the House of Commons passed before that date, section 294 of ITEPA 2003 continues to have effect as if those amendments had not been made.