Administration CommitteeSupplementary written evidence submitted by the Independent Parliamentary Standards Authority (IPSA)

When John Sills and I appeared before the Administration Committee on 25 March, to give evidence on IPSA’s preparations for the General Election expected in May 2015, there were a number of issues where we said that we would write to you with further information. This information is set out below.

Payment of Salaries during the Election Period

There are two aspects to this issue: MPs’ pay and that of their staff.

With respect to MPs themselves, you will recall that they have previously been paid up to the date of the election. I would not expect us to alter this arrangement.

MPs’ staff will continue to be paid during the election period, on the understanding that they are supporting MPs in the conduct of their parliamentary functions. If staff wish to support their MP on campaigning activity, they must take either paid or unpaid leave, depending on their circumstances. Paragraph 10.17 of the 5th edition of the MPs’ Scheme of Business Costs and Expenses covers this point.

Accommodation Costs during the Election Period

MPs can continue to claim accommodation costs in accordance with the rules in Chapter 4 of the 5th edition of the MPs’ Scheme of Business Costs and Expenses. Paragraph 10.15 of the Scheme addresses this point.

Taxation of Interest Free Loans

If an MP’s loans exceed £5,000 at any point in a financial year, then all what HM Revenue and Customs (HMRC) calls “beneficial loans” become taxable in full. The taxable amount is the cash equivalent of the benefit of the loan. The cash equivalent of the benefit is the difference between (a) the interest that would have been payable if the borrower had been required to pay interest at the official rate (currently 4%) and (b) the amount of interest actually paid by the borrower. In the case of loans from IPSA (b) is zero, so 4% of the value of the loans would be taxable.

HMRC provides guidance on taxation for MPs, which can be accessed via the IPSA website at http://www.parliamentarystandards.org.uk or directly from HMRC.

Subsistence Payments

At the 25 March meeting there was some discussion about the £15 subsidy for late evening meals. It may be helpful to note that when MPs are away, overnight, from London or their constituencies, on parliamentary business, they can claim up to £25 per night for food and non-alcoholic beverages. Paragraph 9.31 of the 5th edition of the MPs’ Scheme of Business Costs and Expenses covers this point.

Speed of Payments to MPs

Marcus Jones MP asked if he could see a list of his claims in the past year and how quickly they were processed and paid. We have provided him with this information separately.

Further Decisions ahead of the General Election

There were a number of points made by members of the Committee which will be addressed well in advance of the General Election. These included the amount of money to be put on the pre-paid payment card, the arrangements for existing payment cards, the possibility of a dedicated phone line for new MPs and the nature of training and information that will be provided to MPs (and their staff). We will consider these issues carefully as we take forward our preparations for the next General Election. We will, of course, continue to work cooperatively with MPs, their staff and the House of Commons authorities to ensure a smooth and effective transition to the new Parliament.

Andrew McDonald
Chief Executive

18 April 2013