"Roland Perry" wrote in message

In message , at 18:05:57 on
Mon, 13 Jul 2009, Recliner remarked:
The German word is "Freie Berufe", the adjetive or adverb
"freiberuflich". This is of relevance for VAT -- those who are
working "freiberuflich" don't pay VAT. In some professions, one can
chose if one works "freiberuflich" or as commercially as a
business. In the latter case, one has to pay VAT, or rather, charge
VAT to one's customers.

In Britain, you don't get the choice if "taxable supplies" (revenue)
exceed £67k.

I wonder if an MP has to take account of the monies paid to him to run
his office, as a "taxable supply", or whether they are entirely exempt
from the VAT system.

For the avoidance of doubt, I'll assume all the "expenses" are valid
ones.

Looking down the list and picking the first person as my random
example: Ms Diane Abbott claimed around £131k, *none* of which was
for a second home. http://news.bbc.co.uk/1/hi/uk_politics/8044207.stm

If they ran their offices as self-employed businesses, they would, but I
don't doubt that they exempted themselves (not to save money, but just
to simplify their paperwork). In fact, I don't know if the money for
things like staff costs isn't paid directly to the staff, rather than
via the MP's books.

I know that when I invoice my customers, I have to charge VAT even on
things like reimbursed public transport fares that are not themselves
subject to VAT. Of course, it's all a waste of time, as the money I
charge my customers just moves in a loop: they pay me, I pass it on to
HMRC, and my customers claim it back from HMRC. And, of course, from
time to time the VAT people audit me, even though any errors I might
have made would simply cancel out. So, lots of time and effort incurred
by all concerned, for zero net revenue to HMG.