The controversial Speaker of the House of Commons has refused to reveal details of how he apparently avoided paying tax on his multi-million-pound grace-and-favour residence.
John Bercow, who lives in the luxurious taxpayer-funded Westminster property with his equally controversial wife Sally, previously paid more than £4,000 a year because it was considered a ‘taxable benefit’.
But this tax bill was mysteriously cut to zero in 2010/11, it has emerged. When asked for an explanation, the Speaker, who earns £140,000 a year, refused to explain his tax arrangements.
Commons Speaker John Bercow has signed an exemption certifiate which means details of his tax bill for the flat cannot be released
Mr Bercow – who stood for his office promising greater transparency – used an obscure piece of parliamentary legislation to avoid answering. He claimed that to reveal his tax arrangements would ‘prejudice’ his position as Speaker but critics said he risked ‘tarnishing the reputation of Parliament’.
Mr Bercow and his wife live rent-free in Speaker’s House, part of the Palace of Westminster. It has a magnificent Gothic-style dining room and a state bedroom traditionally used by monarchs the night before their coronation. Within weeks of taking residence in June 2009, he and his wife ordered refurbishments costing £45,000.
As with any staff member granted a home by their employer, Mr Bercow is liable to pay tax either on its value or – if it is judged indispensable to their work – an amount equal to a share of the running costs.
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He was granted the latter arrangement – the same as the Prime Minister and Chancellor have for their grace-and-favour Downing Street flats – and, according to the Commons accounts, was asked to pay £4,300 in 2009-10.
But in the following year’s figures, the bill mysteriously disappears. The account states that: ‘The Speaker’s official residence is provided in conjunction with his House of Commons duties. In 2009/10 the accommodation benefit assessable to tax was £4,300. Discussions with HM Revenue and Customs concluded that no taxable benefit arose in 2010/11.’
In response to a Freedom of Information request by the Press Association to reveal details of the tax arrangement, Mr Bercow took the unusual step of issuing a certificate that effectively exempted this information from normal rules.
Sally Bercow, wife of Speaker of the House of Commons John Bercow, caused a stir when she was pictured in the window of the Speaker's residence overlooking the Thames
This defence is normally subject to a public interest test, but the Speaker has the power to sign a certificate which is taken as conclusive proof he has reached a ‘reasonable opinion’.
The Information Commissioner’s office said it has no power to challenge Mr Bercow’s decision.
Tory MP Rob Wilson said: ‘This is a matter of great concern. There are question marks in this case and they should be explained. The Speaker can’t be above other MPs or the rest of the country. If the Speaker isn’t open about this it risks tarnishing the reputation of Parliament.’
Maurice Frankel, of the Campaign for Freedom of Information, said: ‘The Commons is relying on a power of veto which allows it to evade accountability to avoid embarrassment.’
Matthew Sinclair, chief executive of the TaxPayers’ Alliance, said Mr Bercow was attempting to exempt himself from the same scrutiny that other MPs face.
‘It’s completely inappropriate for the Speaker to make the final judgment over whether legitimate questions about his own taxpayer-funded perks are of public interest or not,’ he said, adding that Mr Bercow’s actions appeared to be ‘a blatant attempt to shut down a perfectly reasonable investigation’.
The FoI request also revealed that the Clerk of the House, Malcolm Jack, paid tax on his grace-and-favour residence in 2009-10 but paid nothing in 2010-11.
HMRC said: ‘Accommodation provided by an employer is generally taxable unless certain conditions are met: where it is provided for special security reasons, or it is necessary for the performance of the employee’s duties.’
Mr Bercow was elected Speaker in the wake of the MPs’ expenses scandal. It was then revealed he had ‘flipped’ the designation of his second home when he sold two houses, allowing him to avoid capital gains tax.
He denied wrongdoing but paid back £6,508 to the taxman.