PART II
THE ALLOWANCES
1. PERSONAL ADDITIONAL ACCOMMODATION EXPENDITURE (PAAE)
PURPOSE OF THE ALLOWANCE
The PAAE is available to reimburse Members for the
additional expenses necessarily incurred in staying overnight
away from their main home for the purpose of performing their
parliamentary duties. It may only be used to meet the following
costs:
- Rent or mortgage interest
- Hotel expenses
- Utilities and telecommunication
charges
- Furnishings
- Maintenance, service agreements,
cleaning and insurance
- Subsistence.
ELIGIBILITY
PAAE can be claimed if the principles set out in
Part I have been complied with, and
- If your main home is in the
constituency, for overnight stays in London.
- If your main home is in London,
for overnight stays in the constituency.
- If your main home is neither
in London nor the constituency, you can choose in respect of which
of these areas to claim PAAE.
For these purposes, "constituency" is regarded
as any point within 20 miles of the constituency boundary.
PAAE may also be claimed if a Member performs parliamentary
duties in an area of his or her constituency where a stay overnight
is reasonably necessary in view of the distance from his or her
main home.
Members representing inner London constituencies
are not eligible to claim this allowance. Instead, there is an
automatic London Costs Allowance (LCA) that is paid with salary.
Members representing constituencies outside inner
London can choose between receiving the LCA and the PAAE. A choice
may be altered no more than once a year.
EXAMPLES OF APPROPRIATE EXPENDITURE
The following provides examples of expenditure which
are appropriate under various categories mentioned above.
Whilst these examples are not exhaustive, they
are designed to indicate the types of costs that are appropriate
and so guide Members for other expenditure they wish to incur
which is not on this list.
RENT OR
MORTGAGE INTEREST
In respect of one additional home in either London
or the constituency:
Either
- Rent
- The cost of a deposit (although
this must be repaid when the deposit, or a proportion thereof,
is returned)
Or
- Mortgage interest
- Increase to mortgage costs
(interest only) to pay for refurbishments; to extend the lease;
or to purchase the freehold
And
- Legal and other costs associated
with obtaining (and selling) (for example, stamp duty, removal
expenses, valuation fees)
HOTEL EXPENSES
- Cost of overnight accommodation
UTILITIES AND
TELECOMMUNICATIONS CHARGES
- Electricity, gas
- Water service charges
- Council tax
- Telephone, television and communications
charges (mobile phone charges should be claimed from AOE)
FURNISHINGS
- White goods (for example, refrigerator,
washing machine or cooker)
- Electrical equipment
- General household furniture
(for example, sofa, chairs, table or bed)
- General household items (for
example, cutlery or crockery)
MAINTENANCE, SERVICE
AGREEMENTS, CLEANING
AND INSURANCE
- Necessary repairs to make good
dilapidations
- Decoration
- Cleaning (services or equipment)
- Service charge/ground rent
- Insurance services and maintenance
contracts
- Basic security measures
SUBSISTENCE
- A flat-rate sum of £25
may be claimed for any night which a Member spends away from his
or her main home on parliamentary business. No other payment in
respect of subsistence may be claimed.
ISSUES NEEDING PARTICULAR ATTENTION
FURNISHINGS
The total costs claimed in respect of furnishings
in any allowance year (except the first year after a Member is
newly elected) are limited to 10 per cent of the PAAE for that
year.
MORTGAGE AND
RENTAL ARRANGEMENTS
PAAE must not be used to meet the costs of renting
a property from yourself; a partner, or family member (including
a spouse or civil partner); a close business associate; or an
organisation or company in which you or a family member have an
interest (other than as an ordinary investor).
PAAE must only be used for mortgages taken out with
a company subject to regulation by the Financial Services Authority.
Members are not prevented from taking out a joint
mortgage but only joint mortgages with a Member's spouse/civil
partner/partner will be fully covered by PAAE. In all other circumstances
Members must contact the Department.
Members are also strongly encouraged to keep mortgage
arrangements as straightforward as possible. Complicated financial
products, which may make it difficult for the Department to advise
Members as to their validity, should be avoided.
RE -MORTGAGING
The Department must be consulted in advance before
any change of mortgage provider or to the terms of a loan.
PROPERTY USED
AS AN
OFFICE
The Department must be informed if PAAE is being
claimed on a property and you wish to claim against AOE for any
of the costs associated with an office on those premises (for
example, heating, lighting, decoration, furniture). You must ensure
that you do not claim twice for any element of these costs.
DOCUMENTATION REQUIRED
Members are required to provide the Department with
the address of their main home when they enter Parliament by completing
form PAAE1. Members must inform the Department if the address
of their main home changes. This information is essential to ensure
the proper assessment of a Member's PAAE and travel entitlements.
Save in exceptional circumstances (on which the Finance and Services
Committee will adjudicate), Members may only change the respective
designations of main home and additional home once in any allowance
year.
If you have a mortgage, a copy of your annual statement
of interest must be provided each year to the Department. If it
is not clear from this documentation what the amount of interest
payable is on the property, further evidence may be required.
You must also inform the Department of any alterations to the
terms of your mortgage.
If you rent a property, a copy of the lease agreement
must be provided to the Department. Relevant documentation must
be submitted when any of the terms and conditions are revised
(for example, a change in rent charges).
Evidence in the form of invoices or receipts must
be provided for all items of expenditure of £25 or more.
No receipt is necessary in respect of the flat-rate payment for
subsistence.
If a copy of annual agreements (for example, council
tax statement, service charge) is deposited with the Department,
you will not need to submit invoices when claiming for relevant
costs.
HOW PAAE WORKS IN PRACTICE
PAAE is a reimbursement allowance. The Department
cannot pay any bill directly. You must pay bills yourself and
claim relevant sums back using a PAAE2 form.
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