Hazel Blears – another £29,183 please

It is reported that Hazel Blears, MP and Minister of State, has volunteered a cheque for £13,322 to the Inland Revenue for capital gains tax in respect of the profit enjoyed by her on the sale  of her second home. Where to start ?

Well, firstly, one would hope that a minister of state would be aware that the Inland Revenue has ceased to exist and its functions, since 2005, have been taken over by HM Revenue & Customs. Not that this will stop HMRC cashing a cheque made out incorrectly, be it to the Inland Revenue or to some of the other, more fragrant, titles, such as bloodsuckers, which have been known to have been used by reluctant taxpayers.

Next up, does she have a tax liability ? Our guess is not. The capital gains tax rules in question, which apply no differently to MPs than to any other UK resident or ordinarily resident individual taxpayer, are not difficult to satisfy and, quite rightly so given that the rules for exemption from tax were enacted by parliament as a relieving measure.

It is not up to Blears to decide whether she has a tax liability, nor to voluntarily offer payment of the same. It is up to the law to determine, and the voluntary payment of a “liability” is no more correct than the avoidance of a liability. And as if a failure to acknowledge that fact was not bad enough when coming from a parliamentarian, Blears is also a qualified lawyer.

Blears has now admitted her moral culpability in that she has profited personally, and handsomely so, from a public subsidy.  But she has it plain wrong if she thinks payment of the "tax" on that profit is what is needed for her to be in the clear.  It is a case of all or nothing, and with Blears acknowledging that it should not be nothing, then it must be all.

The £13,322 “tax” is not due and is not what the public should not be expecting in satisfaction of her wrongdoing. The supposed tax should be returned to Blears and, instead, she should be invited to pay over the entirety of the profit. Voluntarily payments to the State are not, we believe, banked by HMRC but, rather, by the Consolidated Fund. Blears can check on this in order that she can write her bigger, replacement cheque to the correct payee.

The property in question (in a block heavily populated by MPs and now referred to by some locals as the pig sty) would most likely have been sold in 2007-2008, and would not have qualified for taper relief. Blears’ marginal rate would be 40% and she would most likely have her annual CGT exemption available. By our reckoning, that means the profit would have been £42,505.  It looks like the Beeb has rounded that up to £45,000.

In the present climate, it can only be a regret that, try as we might, we can find no reason to say that a crime has been committed.  A shame, because, if that were so, some enterprising criminal lawyer might then be able to make out an argument that the Proceeds of Crime legislation is in point, and operate to deprive Blears not just of the "tax" nor even the entirety of the profit but, rather, the whole of the sale proceeds of the property concerned.  Not fair ?  Well, the law can operate in that fashion for others, and Blears, along with many of her fellow trough-feeders, enacted the law.  Elliot Morley might be a better bet on this score, though.

Lastly, the writer has no personal knoweldge of Mrs Blear's private affairs and he has, therefore, made his observations based solely on information in the public domain.  If what is written here is incorrect, the writer will review any papers Mrs Blears may care to provide to him, upload his opinion of the same and, if appropriate, a correction to what is written.

Edit: in the interest of party political balance, the Indy reports that Tory MP Greg Barker has offered to make a "voluntary payment" of capital gains tax.  The Mail reports Barker has personally profited to the tune of £320,000 from his public subsidy.